2018 WL 2988129

Supreme Court of Kentucky.
FIRST CLASS SERVICES, INC., APPELLANT
V.
GURAL W. HENSLEY; HON. OTTO D. WOLFF, IV, ADMINISTRATIVE LAW JUDGE; AND WORKERS’ COMPENSATION BOARD, APPELLEES
2017-SC-000620-WC
|
RENDERED: JUNE 14, 2018
ON APPEAL FROM COURT OF APPEALS
CASE NO. 2016-CA-001367
WORKERS’ COMPENSATION BOARD NO. 12-WC-60799
Attorneys and Law Firms
COUNSEL FOR APPELLANT: Richard Christion Hutson, WHITLOW, ROBERTS, HOUSTON & STRAUB, PLLC
COUNSEL FOR APPELLEE: Paul Allen Brizendine, BRIZENDINE LAW OFFICE, LLC

MEMORANDUM OPINION OF THE COURT
AFFIRMING
Factual and Procedural Background
*1 Appellee, Gural Hensley, was an over-the-road truck driver employed by Appellant, First Class Services, Inc., a trucking company whose employees haul trailers of hazmat, dry bulk, and liquid tank loads interstate. To ensure product quality, tank trailers hauled by First Class employees must be thoroughly cleaned after each delivery prior to the next product being loaded. After a delivery, Hensley routinely brought his truck with the dirty trailer tank to Derby City Tank Wash in Louisville, where he left the tank to be cleaned before returning to Frankfort for another load.

Because Hensley lived 30 to 40 miles away from the First Class terminal in Lewisport, Kentucky, he was permitted to keep his truck and trailer at his residence in English, Indiana. Hensley began and ended his routes from home.

On November 14, 2012, Hensley informed James Craig, his dispatcher, and Randy Cutrell, Vice-President of First Class, that he was feeling ill during a delivery route. On November 15, Hensley brought his dirty trailer tank to Derby City Tank Wash after his delivery. He was scheduled to take the clean tank back to Frankfort for a new load, then on to Oklahoma.

However, due to his illness, First Class determined that Hensley should not finish his dispatch. Instead, another driver was sent with a different truck to pick up the clean tank and take it to Frankfort for the new load. Hensley was sent home in his truck with no trailer attached, which is known in the industry as “bob-tailing.”

While “bob-tailing” home, Hensley’s truck went off the road in Crawford County, Indiana and struck a tree. Hensley sustained multiple injuries and filed a workers’ compensation claim on February 8, 2013.

Initially, the ALJ found in Hensley’s favor, finding, inter alia, that Hensley’s travel to store his truck at home qualified for the “service or benefit to the employer” exception. Hensley put less mileage on the truck and was able to leave for dispatches earlier without driving the extra 30 to 40 miles to-and-from the terminal in Lewisport. Because keeping the truck at his residence was of “some benefit” to First Class, Hensley’s travel to and from home with his truck was within the scope of his employment. However, the ALJ did not find that Hensley qualified for the “traveling employee” exception. Both parties appealed the ALJ’s decision.

On appeal, the Board affirmed the ALJ in part and reversed in part. The Board found that, in addition to qualifying for the “service or benefit to employer” exception, Hensley’s accident and consequential injuries were work-related under the “traveling employee” exception. The Board stated that, as in Gains Gentry Thoroughbreds/Fayette Farms v. Mandujano, 366 S.W.3d 456, 462-63 (Ky. 2012), Hensley’s injuries occurred during the “necessary and inevitable” act of returning from the journey he undertook on behalf of his employer. First Class appealed to the Kentucky Court of Appeals pursuant to Section 111 of the Kentucky Constitution and KRS 342.290, which affirmed the Board’s decision,

Analysis
*2 Appellate review of Board rulings strictly concerns whether the Board’s Final Order was: (1) based on a correct interpretation of the law, and (2) reasonable under the evidence. Fortney v. Airtran Airways, Inc., 319 S.W.3d 325, 328 (Ky. 2010). Appellate courts will only disturb a Board decision that is reasonable under the evidence “to address new or novel questions of statutory construction, or to reconsider precedent when such appears necessary, or to review a question of constitutional magnitude.” W. Baptist Hosp. v. Kelly, 827 S.W.2d 685, 688 (Ky. 1992).

“When the decision of the fact-finder favors the person with the burden of proof, his only burden on appeal is to show that there was some evidence of substance to support the finding, meaning evidence which would permit a fact-finder to reasonably find as it did.” Special Fund v. Francis, 708 S.W.2d 641, 643 (Ky. 1986) (emphasis added). “In order to reverse the finding of the Board, the claimant, who has the burden of proof, must present evidence that is so overwhelming as to compel a finding in his favor.” Howard D. Sturgill & Sons v. Fairchild, 647 S.W.2d 796, 798 (Ky. 1983) (citing Old Republic Ins. Co. v. McCarty, 599 S.W.2d 163 (Ky. 1980)).

A compensable “injury” under the Workers’ Compensation Act must have resulted from a work-related occurrence “arising out of and in the course of employment ….” KRS 342.0011(2). The going and coming rule states that, “[w]here an employee is traveling between his home and the place of employment and is not performing some special service or benefit for his employer, his injuries are not sustained in the course of his employment.” Fairchild, 647 S.W.2d at 797 (citing Brown v. Owsley, 564 S.W.2d 843 (Ky. 1978)). “The rationale supporting the rule is that perils encountered during travel to and from work are no different from those encountered by the general public and, thus, are neither occupational nor industrial hazards for which the employer is liable.” Fortney, 319 S.W.3d at 328 (internal citations omitted).

However, this Court has addressed several exceptions to the going and coming rule, including the “service or benefit to the employer” exception, see id. at 329-30, and the “traveling employee” doctrine. See Mandujano, 366 S.W.3d at 462. Although only one exception to the going and coming rule is needed, the following analysis demonstrates that both are satisfied in the case at bar.

A. Traveling Employee Exception
“[T]he traveling employee doctrine considers an injury that occurs while i the employee is in travel status to be work-related unless the worker was engaged in a significant departure from the purpose of the trip.” Id. Travel status applies to “[e]mployees whose work entails travel away from the employer’s premises.” Black v. Tichenor, 396 S.W.2d 794, 797 (Ky. 1965). Accordingly, traveling employees perform within the scope of their employment “continuously during the trip, except when a distinct departure on a personal errand is shown.” Id.

Here, the Board held that Hensley’s return trip to his residence was a “necessary and inevitable” act of completing his travel, undertaken as a First Class employee. The Board found that “[s]ometimes [Hensley] brought a trailer home with him, and sometimes he did not.” Further, the Board stated that “a mere deviation from his usual employment due to an illness [does] not negate the fact Hensley was still working until he returned home.” So, it was not a distinct departure from his duties to be driving the truck home without a trailer. Thus, the Board concluded that Hensley’s accident fell within the traveling employee exception.

B. Some Service or Benefit to the Employer Exception
*3 “The rule excluding injuries that occur off the employer’s premises, during travel between work and home, does not apply if the journey is part of the service for which the worker is employed or otherwise benefits the employer.” Fortney, 319 S.W.3d at 329. Hence, driving and other forms of movement required to complete an employee’s duties are covered if they provide some benefit or service to the employer.

Here, the ALJ’s recommendation and the Board’s final order both described Hensley’s storage of his truck and trailer at his residence as being of “some benefit” to First Class. Among the benefits listed were that less mileage was put on the truck and it allowed Hensley to spend more time on the road.

C. Applying the Exceptions
Substantial evidence supports the Board’s findings that Hensley’s storage of the company truck at his home was of benefit to First Class, and that Hensley was a traveling employee. Therefore, the reviewing court was bound by the record. Paramount Foods, Inc. v. Burkhardt, 695 S.W.2d 418, 419 (Ky. 1985). Accordingly, the Court of Appeals properly deferred to the Board’s findings, which were based upon evidence of substance, as to the applicability of those two exceptions. Finding no legal error, the Court of Appeals appropriately affirmed the Board’s Final Order.

Conclusion
For the reasons stated herein, we hereby affirm the decision of the Court of Appeals.

All sitting. All concur.
All Citations
Not Reported in S.W. Rptr., 2018 WL 2988129

2018 WL 3029161

United States Court of Appeals, Tenth Circuit.
Perry ODOM, and Carolyn Odom, Plaintiffs-Appellants,
v.
PENSKE TRUCK LEASING CO., L.P., Defendant-Appellee,
and
Hendrickson USA, LLC, Defendant.
No. 17-6065
|
Filed June 19, 2018
Synopsis
Background: Employee brought negligence action against his employer’s parent company, seeking to recover damages for injuries he sustained when semi-trailer owned by parent company collapsed on him at work. The United States District Court for the Western District of Oklahoma, No. 5:16-CV-00442-W, Lee R. West, J., 2017 WL 5473482, granted parent company’s motion to dismiss and granted employee’s motion for certification for immediate appeal. The Court of Appeals, Timothy M. Tymkovich, Chief Judge, 704 Fed.Appx. 780, certified question as to whether Oklahoma’s Administrative Workers’ Compensation Act’s (AWCA) exclusive-remedy provision shielded employer’s stockholders from employee claims arising out of workplace injury. The Oklahoma Supreme Court, Combs, C.J., 415 P.3d 521, 2018 OK 23, answered in the negative.

[Holding:] The Court of Appeals, Tymkovich, Chief Judge, held that District Court failed to consider persona or identity of employer’s parent company to determine whether it was acting in role of employer, as required to be shielded from liability by AWCA, warranting remand.

Reversed and remanded.

West Headnotes (5)

[1]
Workers’ Compensation

District Court failed to consider persona or identity of employer’s parent company to determine whether it was acting in role of employer, warranting remand of Court’s order dismissing employee’s negligence action against his employer’s parent company, based only on its ownership of employer; Oklahoma’s Administrative Workers’ Compensation Act’s (AWCA) exclusive-remedy provision shielded employer’s stockholders from employee claims arising out of workplace injury if they possessed persona that was not independent from that of employer. 85A Okla. Stat. Ann. § 5(A).
Cases that cite this headnote

[2]
Federal Courts

When a state proscribes its own courts’ jurisdiction over particular subject matter, it does not divest the authority of federal courts within its borders; rather, Congress alone defines the lower federal courts’ subject matter jurisdiction. U.S. Const. art. 3, § 1.
Cases that cite this headnote

[3]
Courts

Constitutional limits on power of Congress to define subject matter jurisdiction of the lower federal courts do not concern the states’ allocation of their own judicial resources. U.S. Const. art. 3, § 1; U.S. Const. art. 3, § 2, cl. 1.
Cases that cite this headnote

[4]
Federal Courts

When a state closes its own courthouse doors on a claim it has created, a federal court applying that state’s laws in a diversity action may not grant relief on that claim either; the state jurisdiction-stripping provision is so wrapped up with the state-created right that it counts as substantive law for Erie purposes.
Cases that cite this headnote

[5]
Federal Civil Procedure

When a party goes beyond the pleadings in invoking a state door-closing statute at the motion to dismiss stage, district courts should consider the motion a motion for summary judgment rather than a motion to dismiss for lack of subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1), 12(d), 56.
Cases that cite this headnote

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA (D.C. NO. 5:16-CV-00442-W)
Attorneys and Law Firms
Daniel E. Bryan III, Lane M. Clausen with him on the briefs, Hornbeek Vitali & Braun P.L.L.C., Oklahoma City, Oklahoma, for Appellants.
L. Earl Ogletree, Cameron R. Capps with him on the brief, Wiggins Sewell & Ogletree, Oklahoma City, Oklahoma, for Appellee.
Before TYMKOVICH, Chief Judge, HARTZ, and HOLMES, Circuit Judges.
Opinion

TYMKOVICH, Chief Judge.

*1 This appeal concerns the scope of Oklahoma’s recently modified workers’ compensation regime. Perry Odom suffered serious injuries when a semi-trailer collapsed on him at work. His employer—Penske Logistics—did not own the trailer, but his employer’s sole stockholder—Penske Truck Leasing—did. Odom and his wife sought to recover from Penske Truck Leasing through a personal injury action in federal court. The district court dismissed their complaint, reasoning Oklahoma’s workers’ compensation scheme as applied here shielded an employer’s stockholders from employee claims arising out of a workplace injury.

The Odoms appealed, challenging the district court’s interpretation of the Oklahoma statute. We certified the interpretive question to the Oklahoma Supreme Court. We have received an answer making it clear the district court applied an incorrect legal standard in dismissing this case. We therefore reverse and remand for further proceedings.

I. Background
At this stage of the proceedings, we assume the truth of the facts alleged in the Odoms’ complaint.

Perry Odom worked for Penske Logistics in Oklahoma City, Oklahoma. On July 27, 2015, Odom suffered life-threatening injuries when a trailer equipped with an air suspension system collapsed on him, striking his head. In addition to pursuing relief from the Oklahoma Workers’ Compensation Commission, Odom and his wife filed this diversity action in the United States District Court for the Western District of Oklahoma. See 28 U.S.C. § 1332. As relevant here, the Odoms alleged the trailer’s owner, Penske Truck Leasing Co., L.P., negligently inspected, tested, repaired, serviced and maintained the trailer, and then failed to preserve evidence critical to this action.

As it turns out, however, Penske Truck Leasing also owned Odom’s employer, Penske Logistics, as a corporate subsidiary. On this basis alone, Penske Truck Leasing moved to dismiss the Odoms’ action for failure to state a claim. It argued the exclusive-remedy provision of Oklahoma’s workers’ compensation statute barred civil suits against it based on workplace injuries suffered by Penske Logistics employees.

The district court granted the motion. It read the Oklahoma statute to immunize both employers and their stockholders from liability for work-related negligence. As a result, the court agreed dismissal was in order so long as Penske Truck Leasing could prove an ownership interest in Penske Logistics. In subsequent briefing, Penske Truck Leasing offered an employee affidavit and a corporate data sheet both establishing that fact. The Odoms did not refute this evidence, and have not challenged it here. Accordingly, the district court dismissed the case.

The Odoms appealed. Uncertainty over the proper interpretation of the statute led us to solicit the view of the Oklahoma Supreme Court. See Odom v. Penske Truck Leasing Co., 704 F. App’x 780 (10th Cir. 2017) (unpublished); see 10th Cir. R. 27.2(A)(1); see also Okla. Stat. tit. 20, § 1602 (granting the power to answer certified questions). We asked whether the statute’s “exclusive-remedy provision bar[s] an employee from [suing] a stockholder of his employer” in tort, “even if … liability would arise from duties independent of the employment relationship.” Odom, 704 F. App’x at 782. The Oklahoma Supreme Court accepted our certified question and issued an opinion answering it. See Odom v. Penske Truck Leasing Co., 415 P.3d 521 (Okla. 2018). Applying that answer, we now decide the Odoms’ appeal.

II. Analysis
*2 In light of the Oklahoma Supreme Court’s interpretation of Oklahoma law, we must remand the Odoms’ action for further proceedings.

We begin with the statutory language. The Oklahoma statute in question provides that “[t]he rights and remedies granted to an employee” under the Oklahoma Administrative Workers’ Compensation Act are “exclusive of all other rights and remedies” an employee or his spouse may assert against “the stockholder … of the employer” for “injury, illness, or death.” Okla. Stat. tit. 85A, § 5(A). It goes on, however, to say “[n]o role, capacity, or persona of any … stockholder other than … the role of employer … shall be relevant” under the law. Id. (emphasis added).

The Oklahoma Supreme Court held this language ambiguous with respect to stockholder liability. See Odom, 415 P.3d at 531. It thus sought “a reasonable construction, one that will avoid absurd consequences if this can be done without violating legislative intent.” Id. at 531. Accordingly, the court rejected a reading of the statute that would offer substantive immunity “to potentially legally distinct non-employer entities such as stockholders, regardless of how passive their connection to the employment relationship is.” Id. at 532. Instead, it held “[a] stockholder may … [receive] exclusive remedy protections … if [it] possesses a persona that is not independent from that of the employer.” Id. at 532–33 (emphasis added) (bold omitted). In other words, a stockholder enjoys immunity while “acting in the role of employer.” Id. at 533. Courts must determine the stockholder’s persona “on a case-by-case basis,” id., looking not to “activity or relationship, but identity,” id. at 532; see also id. (“The language of the statute implies an inversion of the traditional dual-capacity doctrine set out in Weber [ v. Armco, Inc., 663 P.2d 1221 (Okla. 1983) (abrogated by statute) ].”); cf. Weber, 663 P.2d at 1224–27 (explaining the “dual-capacity doctrine,” id. at 1226).

[1]The district court did not consider Penske Truck Leasing’s “persona” or “identity,” Weber, 663 P.2d at 1225, as Oklahoma law requires, see Odom, 415 P.3d at 532–33. Indeed, it had no occasion to. The evidence Penske Truck Leasing filed below pertained only to its ownership of Penske Logistics, and the district court dismissed this action based on that fact alone.

Accordingly, we must vacate the district court’s dismissal and remand for further proceedings. To obtain immunity from liability under Oklahoma law, Penske Truck Leasing must prove more than mere ownership of Penske Logistics. As the Oklahoma Supreme Court explained, Penske Truck Leasing must prove it “possessed” a “persona” or “identity” “not independent from” Penske Logistics.

III. Jurisdiction
We note also, for the benefit of remand, that Penske Truck Leasing’s motion to dismiss did not constitute a challenge to the district court’s subject-matter jurisdiction.

Penske Truck Leasing styled its motion to dismiss as challenging the Odoms’ statement of a valid claim to relief. See Fed. R. Civ. P. 12(b)(6). The district court, however, construed the motion as a challenge to its subject-matter jurisdiction. See id. at 12(b)(1). It reasoned if Penske Truck Leasing indeed fell under the protections of the exclusive-remedy provision, exclusive jurisdiction for Odom’s claim would rest with the state’s Workers’ Compensation Commission.

*3 [2] [3]But when a state proscribes its own courts’ jurisdiction over particular subject matter, it does not divest the authority of federal courts within its borders. This is because, as an axiom of our federal system, Congress alone defines the lower federal courts’ subject-matter jurisdiction. E.g. Kontrick v. Ryan, 540 U.S. 443, 452, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004); see also U.S. Const. art. III, § 1 (“The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.”). Congress must, of course, adhere to constitutional limits in doing so. See U.S. Const. art. III, § 2, cl. 1 (limiting federal “judicial Power” to specified “Cases” and “Controversies”). Those limits, however, do not concern the states’ allocation of their own judicial resources. See id.

[4]This is not to say a federal court may impose liability based on claims a state has created but deprived its courts the power to adjudicate. Since the Supreme Court’s decision in Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), the federal courts have endeavored to minimize variation between federal and state adjudication of state-created rights. Pursuant to that mission, the Supreme Court has explained “a right which local law creates but … does not supply with a remedy is no right at all for purposes of enforcement in a federal … diversity case.” Woods v. Interstate Realty Co., 337 U.S. 535, 538, 69 S.Ct. 1235, 93 L.Ed. 1524 (1949) (emphasis added). Thus, when a state closes its own courthouse doors on a claim it has created, a federal court applying that state’s laws may not grant relief on that claim either. Id.; U.S. Fid. & Guar. Co. v. Lee Invs. LLC, 641 F.3d 1126, 1132–33 (9th Cir. 2011); Goetzke v. Ferro Corp., 280 F.3d 766, 778–79 (7th Cir. 2002); see also Angel v. Bullington, 330 U.S. 183, 191–92, 67 S.Ct. 657, 91 L.Ed. 832 (1947) (first describing the principle). But crucially, this is because the state jurisdiction-stripping provision is so wrapped up with the state-created right that it counts as substantive law for Erie purposes. See Guar. Trust Co. v. York, 326 U.S. 99, 109, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945).

It is true that our opinion in Stuart v. Colorado Interstate Gas Company, 271 F.3d 1221 (10th Cir. 2001), might seem to strain these principles. In that case, we said the federal courts would not “take jurisdiction” over a diversity action “unless the plaintiff ha[d] asserted a claim cognizable in the state courts.” Id. at 1225 (quoting 13B Charles Alan Wright et al., Federal Practice and Procedure § 3602, at 375 (2d ed. 1984) ). The parties in Stuart agreed that if Colorado law applied, Colorado’s workers’ compensation regime would provide the exclusive remedy. Id. We therefore held a determination that Colorado law did apply sufficed to support dismissal for want of subject-matter jurisdiction. See id. at 1231.

[5]Perhaps Stuart can be read only as justifying a prudential refusal to exercise subject-matter jurisdiction Congress has granted. See id. at 1224–25. But in any event, we should construe that decision narrowly due to the Supreme Court’s late emphasis on the federal courts’ “virtually unflagging” duty to hear and decide cases within our jurisdictional grants. Sprint Commc’ns, Inc. v. Jacobs, 571 U.S. 69, 134 S.Ct. 584, 591, 187 L.Ed.2d 505 (2013) (quoting Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) ); see Lexmark Int’l, Inc. v. Static Control Components, Inc., ––– U.S. ––––, 134 S.Ct. 1377, 1386, 188 L.Ed.2d 392 (2014). And though Erie provides an alternate justification for federal courts to incorporate state door-closing statutes into diversity suits, it also requires adherence to the Federal Rules of Civil Procedure in actions touching those statutes. See, e.g., Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 398, 130 S.Ct. 1431, 176 L.Ed.2d 311 (2010). By this logic, when a party goes beyond the pleadings in invoking a state door-closing statute at the motion-to-dismiss stage, district courts should consider the motion under Rule 56 rather than Rule 12(b)(1). See Fed. R. Civ. P. 12(d).

*4 And even if Stuart remains good law, it is not particularly relevant to this case. Indeed, we cabined it substantially in Radil v. Sanborn Western Camps, Inc., 384 F.3d 1220 (10th Cir. 2004). In Radil, the parties agreed Colorado law governed but disputed the exclusive-remedy provision’s application to the facts. See id. at 1225. We observed—as we had not in Stuart—that Colorado’s exclusive remedy provision provided a waivable affirmative defense to liability, not an obstacle to state court jurisdiction. See id. We therefore held a dispute over “the application of the exclusivity defense bar” went to a claim’s merit, not our jurisdiction. Id. at 1226 (emphasis added).

This case thus falls within Radil’s ambit rather than Stuart’s. Penske Truck Leasing invoked Oklahoma’s exclusive-remedy provision as a substantive defense to liability, not a jurisdictional limitation. This is consistent with the Oklahoma courts’ treatment of the statute. See Strickland v. Stephens Prod. Co., 411 P.3d 369, 372 (Okla. 2018); Shadid v. K 9 Univ., LLC, 402 P.3d 698, 699 (Okla. Civ. App. 2017); see also Benedetti v. Cimarex Energy Co., 415 P.3d 43, 45 (Okla. 2018) (treating a previous version of the provision as providing “statutor[y] immun[ity] from civil liability”); cf. Lind v. Barnes Tag Agency, Inc., 418 P.3d 698, –––– n.1 (Okla. 2018) (describing a challenge to subject-matter jurisdiction under a previous version of the provision as “intertwined with the merits of the controversy” and treating it as a motion for summary judgment). And it is yet unclear whether the Oklahoma statute actually strips jurisdiction from the Oklahoma courts.

In sum, an invocation of Oklahoma’s exclusive-remedy provision that goes beyond the pleadings should be reviewed as a motion for summary judgment, not as a challenge to federal subject-matter jurisdiction. See Fed. R. Civ. P. 12(d).

IV. Conclusion
For the reasons given above, we REVERSE the district court’s order and REMAND for further consideration consistent with this opinion.

All Citations
— F.3d —-, 2018 WL 3029161