ISP Chemicals, Inc. v. Dutchland, Inc et al
Filing
213
MEMORANDUM OPINION & ORDER granting 161 Motion for Partial Summary Judgment. Signed by Chief Judge Thomas B. Russell on 7/6/2011. cc:counsel (KJA)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
PADUCAH DIVISION
CASE NO. 5:08-CV-153
ISP CHEMICALS LLC
PLAINTIFF
v.
DUTCHLAND, INC., ET AL.
DEFENDANTS
MEMORANDUM OPINION AND ORDER
This matter is before the Court upon Dutchland, Inc.’s Motion for Partial Summary
Judgment on Vicarious Liability (Docket #161). ISP has responded (Docket #172). Dutchland
has replied (Docket #179). This matter is now ripe for adjudication. For the following reasons,
Dutchland’s Motion for Partial Summary Judgment is GRANTED.
BACKGROUND
The parties and the Court are well aware of the facts of this case, which centers around
the alleged negligent design and construction of an above ground, pre-cast waste water treatment
tank at ISP’s Calvert City facility. ISP filed the present lawsuit on September 22, 2008,
asserting eight counts of relief against Defendants Dutchland, Inc., Erik Lederman, and Paul
Stoltzfus. Throughout the course of this lawsuit, the parties have strenuously debated the
application of the one year statute of limitations period for professional negligence claims set
forth in Kentucky Revised Statutes section 413.245. On January 26, 2011, the Court held that
ISP’s professional negligence claims accrued on August 27, 2007. Because ISP did not file its
lawsuit until September 22, 2008, the one year statute of limitations prevented ISP from bringing
a claim for professional negligence against engineer Erik Lederman, who was dismissed from
this action.
On March 1, 2011, the Court clarified the remaining issues in this case. First, the Court
noted that the contractual indemnity claim is not subject to the one year statute of limitations. In
addition, in order for the one year statute of limitations period to apply to non-engineer Paul
Stoltzfus, Dutchland must establish either that a licensed engineer had oversight of his work or
delegated work to him for completion. Next, the Court noted that for the statute of limitations
period to apply to Dutchland, it must be shown that the firm had at least one professional
engineer on staff and the firm must hold itself out as an engineering firm. If the statute of
limitations applies to Dutchland, the breach of warranty claim is barred. Finally, the Court held
that Dutchland could still be held vicariously liable for Lederman’s actions. It is this last holding
which Dutchland now challenge in its motion for partial summary judgment.
STANDARD
Summary judgment is appropriate where “the pleadings, the discovery and disclosure
materials on file, and any affidavits show that there is no genuine issue as to any material fact
and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). In
determining whether summary judgment is appropriate, a court must resolve all ambiguities and
draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986).
“[N]ot every issue of fact or conflicting inference presents a genuine issue of material
fact.” Street v. J. C. Bradford & Co., 886 F.2d 1472, 1477 (6th Cir. 1989). The test is whether
the party bearing the burden of proof has presented a jury question as to each element in the
case. Hartsel v. Keys, 87 F.3d 795, 799 (6th Cir. 1996). The plaintiff must present more than a
mere scintilla of evidence in support of his position; the plaintiff must present evidence on which
the trier of fact could reasonably find for the plaintiff. See id. (citing Anderson v. Liberty Lobby,
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Inc., 477 U.S. 242, 252 (1986)). Mere speculation will not suffice to defeat a motion for
summary judgment: “the mere existence of a colorable factual dispute will not defeat a properly
supported motion for summary judgment. A genuine dispute between the parties on an issue of
material fact must exist to render summary judgment inappropriate.” Moinette v. Elec. Data Sys.
Corp., 90 F.3d 1173, 1177 (6th Cir. 1996).
DISCUSSION
In holding that Dutchland could still be held liable for Lederman’s actions, the Court
relied upon Cohen v. Alliant Enterprises, Inc., 60 S.W.3d 536 (Ky. 2001). That case holds that
“a principal can be held vicariously liable for the negligence of its agent when the agent has
escaped liability by virtue of the statute of limitations.” Id. at 537. Dutchland argues that the
Court failed to consider, however, that ISP’s derivative claim against Dutchland was also
untimely.
Neither party disputes that Dutchland could be held vicariously liable for the acts of its
employee, even if the employee was able to escape liability. Rather, the dispute is whether ISP
asserted its claim for vicarious liability in a timely manner. Dutchland argues that because ISP
failed to file its lawsuit prior to August 27, 2008, all professional negligence claims, including
claims of vicarious liability, are untimely. In contrast, ISP argues that the Court has not yet
determined whether the one year statute of limitations period applies to Dutchland. If the Court
determines it does not apply, then all claims against Dutchland were timely filed, including the
claim for vicarious liability.
A more thorough reading of Cohen reveals that Dutchland has the better argument. See
60 S.W.3d at 538-39. In that case, the appellant injured his foot and received treatment by a Dr.
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Ewing. Id. at 537. After the appellant’s foot injury became worse due to Dr. Ewing’s alleged
negligence, the appellant filed suit against the medical care center and a Dr. Thomas. Id. Dr.
Thomas, however, had not treated the appellant. Id. When the appellant discovered his mistake,
the statute of limitations period had already run as to Dr. Ewing. Id. at 537-38. Thus, the
appellant’s only remaining claim was against the medical care center for vicarious liability. Id.
at 537. The medical care center moved for summary judgment, arguing that because the
appellant could not bring a claim against the agent/doctor, he could not recover under a theory of
vicarious liability. Id. at 538. The Kentucky Supreme Court held that the appellant could
proceed because “[i]t is the negligence of the servant that is imputed to the master, not the
liability.” Id.
Dutchland notes that the appellant’s vicarious liability claim in Cohen was timely filed
before the statute of limitations period had run as to appellant’s negligence claim against Dr.
Ewing. Thus, although the claim against Dr. Ewing was untimely, the appellant could still seek
recovery on its timely filed claim against the medical care center. In the case presently before
the Court, however, no claims were filed before the statute of limitations period for professional
negligence claims expired.
The Cohen court also seemingly finds no fault in the appellee’s argument discussing one
of the ways by which a plaintiff may assert a claim for vicarious liability, in which appellee
notes that “he could have sued the principal only, so long as he did so before the statute of
limitations had run as to the agent.” Id. (emphasis added); accord Doe v. Robinson, No. L-101032, 2010 WL 4925810, at *2 (Ohio Ct. App. Dec. 3, 2010) (“The derivative or vicarious
liability of the abuser’s employer was subject to the same statute of limitations for assault and
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battery.”).
An Eastern District of Kentucky case also lends support to Dutchland’s position. See
Dishman v. Corr. Corp. of Am., No. 10-CV-026-ART, 2010 WL 3294679, at *4 (E.D. Ky. Aug.
20, 2010). In Dishman, Judge Amul R. Thapar noted:
Vicarious liability is possible for Dishman’s state law claims, and under Kentucky
law, [the principals] can be held vicariously liable for [the agent’s] conduct even
if the statute of limitations bars Dishman’s claim against [the agent] himself. See
Cohen v. Alliant Enterprises, Inc., 60 S.W.3d 536, 538 (Ky. 2001) . . . . But
Dishman was still required to file her action against [the principals] within the
limitations period. Dishman’s claim against [the principals] accrued at the same
time that it accrued against [the agent] . . . .
Id.; accord Stanley ex rel. Estate of Hale v. Trinchard, 579 F.3d 515, 520 (5th Cir. 2009)
(“‘Louisiana law allows a plaintiff to bring suit against an employer when the employee is
completely dismissed, even when the employer’s sole basis for liability is vicarious liability’ as
long as the suit is not ‘prescribed.’” (citations omitted)). Judge Thapar also held in Dishman that
even if the agent’s conduct tolled the statute of limitations such that he could still be held liable,
the statute of limitations would not be tolled for the vicarious liability claims against the
principals because tolling applies only to the defendant who committed obstruction. Id.
This case has focused largely on concerns over who is or is not providing “professional
services,” an inquiry which has been challenging and time-consuming. But, contrary to ISP’s
argument, this inquiry is irrelevant to the present issue. Instead, the present inquiry should focus
on the agent’s actions which led to the claim asserted. The statute of limitations applies to civil
actions asserting claims of professional negligence. See Ky. Rev. Stat. Ann. § 413.245. The
Court has already determined that ISP’s claims against Lederman were claims of professional
negligence. Thus, the one year statute of limitations applies to these claims. ISP’s vicarious
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liability claim is merely derivative of these professional negligence claims. It is therefore
irrelevant whether Dutchland was providing professional services (and therefore subject to the
one year statute of limitations), because the claim itself is subject to the limitations of section
413.245.
CONCLUSION
For the foregoing reasons, IT IS HEREBY ORDERED that Dutchland’s Motion for
Partial Summary Judgment on Vicarious Liability is GRANTED.1
July 6, 2011
1
As noted by Dutchland in its motion, this ruling is confined to ISP’s vicarious liability
claim against Dutchland for the alleged negligence of Erik Lederman. It has no bearing on ISP’s
vicarious liability claim regarding the actions of Paul Stoltzfus.
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