Hutson, Inc. v. Windsor

Filing 69

MEMORANDUM OPINION AND ORDER granting in part and denying in part 52 Motion for Partial Summary Judgment; Signed by Judge Greg N. Stivers on 7/8/15: Plaintiff's Motion for Partial Summary Judgment 52 is GRANTED on Counts I and II but is DENIED on Count IV of the Counterclaim. cc: Counsel (DJT)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
PADUCAH DIVISION
CIVIL ACTION NO. 5:12-CV-00191-GNS-LLK
HUTSON, INC.

PLAINTIFF

v.

WALTER C. WINDSOR

DEFENDANT

MEMORANDUM OPINION AND ORDER
This matter is before the Court upon the Motion for Partial Summary Judgment of
Plaintiff Hutson, Inc. (“Hutson”), on Counts I, II, and IV of Defendant’s Counterclaim (DN 52).
The motion is fully briefed, and is ripe for decision. For the reasons outlined below, the motion is
GRANTED on Counts I and II, but DENIED on Count IV.
I.

STATEMENT OF FACTS AND CLAIMS

This dispute arises out of a series of agreements by which Hutson acquired assets and
inventory from Premier Development Company, Inc. (“Premier”), an international agricultural
equipment and parts corporation. As part of the agreements, Walter Windsor (“Windsor”), who
served as president and shareholder of Premier until late 2010, became an employee of Hutson.
Additionally, there is a dispute as to Hutson’s liability for comments made by Patrick Lewis
(“Lewis”) to a third party after Windsor was terminated by Hutson.
Prior to Hutson’s acquisition of some of the company’s assets, Premier had been a
customer of Hutson and had accumulated nearly $100,000 in debt on past due invoices.
According to Hutson, the agreements at issue were entered into after discussions with Windsor
relating to Premier’s past-due accounts. Ultimately, Hutson agreed to purchase certain articles of

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Premier’s inventory, hire Windsor as an employee, and provide him with a $250,000 loan to
assist him with paying off debts he had at that time. (Mem. in Supp. of Pl.’s Mot. for Partial
Summ. J. 2-3, DN 52-1). The agreements were consummated on August 19, 2011, in the form of
an Inventory Sales Agreement, an Employment Agreement, and a Promissory Note. (Am.
Compl. Exs. 1-3, DN 36-1 to 36-3). The Employment Agreement set forth the term of Windsor’s
employment, including a covenant not to compete, an agreement to work exclusively for Hutson,
and a clause defining the employment relationship as “at will.” (Am. Compl. Ex. 2, DN 36-2).
Windsor, however, asserts that he was approached by Hutson about purchasing the
business of Premier because of Hutson’s desire to become involved in the sale of agricultural
equipment and parts internationally, and to have Windsor take charge of developing business in
Europe and Latin America. (Def.’s Resp. to Pl.’s Mot. for Partial Summ. J. 2-3, DN 57).
According to Windsor, he agreed to the business relationship solely because of representations
by Barry Carson, Hutson’s president, that the partnership would provide Windsor with a “nearly
limitless environment” and that the partnership would “exceed [Windsor’s] projections by 25%
minimum by year 2013.” (Def.’s Decl. I Ex. 1 at 1, DN 43). Windsor contends that Carson made
additional promises that Hutson would provide credit terms that were more favorable to
customers than Premier could offer and that Windsor’s earned commissions at Hutson would far
exceed his income at Premier. (Def.’s Decl. I ¶ 14).
According to Windsor, he entered into the promissory note and Employment Agreement
in reliance on these representations, believing that the proceeds of the sale and his commissions
would be “more than sufficient to pay off the note,” and that the partnership would be
“economically advantageous.” (Def.’s Decl. I ¶ 17). After starting with Hutson, however,
Windsor contends that the company did not provide credit terms “equal to or better than what

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Premier had provided customers,” (Def.’s Decl. I ¶ 21), and it did not provide Windsor with
“independence to operate and manage the international operations.” (Def.’s Decl. I ¶ 24).
Windsor asserts that because of Hutson’s actions he was unable to “make anywhere close to the
sales [he] had projected.” (Def.’s Decl. I ¶ 26). Windsor contends that the representations made
by Carson amount to fraud, and that Hutson’s failure to provide favorable credit terms, sufficient
resources, and independence was a breach of the Employment Agreement. (Countercl. 19, DN
42).
Finally, Windsor asserts that during his tenure he introduced Hutson to a prominent
Romanian farmer, Mihai Anghel (“Anghel”), to whom Hutson sold nearly $1,000,000 in
equipment and parts shortly after Windsor was terminated. (Def.’s Resp. to Pl.’s Mot. for Partial
Summ. J. 5). According to Windsor, as a part of the negotiations for this sale, Lewis, acting as an
agent of Hutson, made defamatory statements about Windsor to Anghel, as well as to Hutson
employees Andrew Ellison (“Ellison”) and Andrei Costea. (Def.’s Resp. to Pl.’s Mot. for Partial
Summ. J. 5). While Hutson asserts Lewis’s legal status was that of an independent contractor and
not an employee, Windsor states that Lewis was “actively involved and engaged in the day to
day operations associated with international sales of agricultural equipment and parts;” traveled
to trade shows with Hutson employees; distributed business cards to customers for Global Ag
Solutions, a sister company of Hutson; and represented himself to customers as “someone who
was a representative of the international sales operation / Global Ag Solutions and could speak
for the company”; and that this conduct was indicative of Lewis acting as an agent of Hutson.
(Def.’s Decl. II ¶ 12, DN 58).
Plaintiff, Hutson, filed its Motion for Partial Summary Judgment on March 6, 2015.
Hutson cites the Court’s order granting summary judgment as to Count I in the Amended

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Complaint, ordered on November 4, 2014, as foreclosing Windsor’s claim of fraud. Hutson
further claims that Windsor has failed to produce evidence that Hutson’s conduct was a breach of
the terms of the Employment Agreement. (Mem. in Supp. of Pl.’s Mot. for Partial Summ. J. 3-4).
Finally, Hutson asserts Windsor has failed to provide sufficient evidence to raise a genuine
dispute of material fact as to Lewis’s status as an agent of Hutson at the time of the allegedly
defamatory comments as grounds for summary judgment. (Mem. in Supp. of Pl.’s Mot. for
Partial Summ. J. 4).
II.

STANDARD OF REVIEW

Summary judgment is appropriate if the moving party can establish that the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, “show that there is no genuine issue of material fact and that the moving party is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). In determining whether summary judgment
is appropriate, a court must resolve all ambiguities and draw all 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) (citation omitted).
The burden initially falls on the moving party to inform the district court of the basis of its
motion, either by identifying those portions of the record supporting its position or by
demonstrating the absence of evidence to support one of the essential elements of the nonmoving
party’s claim. Celotex Corp. v. Catrett, 477 U.S. 317, 322-25 (1986). The nonmoving party in
this action must present more than a “mere scintilla of evidence” in support of his position; he
must present evidence on which the trier of fact could reasonably find for him. Hartsel v. Keys,
87 F.3d 795, 799 (6th Cir. 1996) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252

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(1986)). Finally, the party opposing summary judgment “must do more than simply show that
there is some metaphysical doubt as to the material facts.” Matsushita, 475 U.S. at 586.
III.
A.

DISCUSSION

Count I: Breach of Employment Agreement

Windsor’s claim of breach of the Employment Agreement is predicated on Hutson’s
alleged failure to, among other things, “provide Windsor with the financial resources and support
necessary to develop business, provide [Windsor] with the level of independence and
responsibility promised for his role,” and to “provide customers of Windsor with the credit and
service terms and support facilities [Windsor] had been promised would be available.”
(Countercl. 10). None of these obligations on the part of Hutson, however, are contained within
the language of the contract. (Am. Compl. Ex. 2, DN 36-2). Instead, the explicit terms of the
Employment Agreement oblige Hutson to employ Windsor on an at-will basis, compensate
Windsor on a pure commission basis, allow Windsor to participate in various benefit plans
available to Hutson employees, and pay reasonable business travel expenses. (Am. Compl. Ex. 2,
DN 36-2). Windsor makes no claims that Hutson failed to comply with any of these duties
during his tenure with the company. Thus, Windsor has failed to direct the court to any material
obligation on the part of Hutson that the Company failed to fulfill.
While the additional contract terms claimed by Windsor are not explicitly contained
within the agreement, he asserts that they were essential to the formation of the contract,
inducing his agreement to form the partnership, and thus remain a basis for this court to find a
breach on the part of Hutson. (Def.’s Resp. to Pl.’s Mot. for Partial Summ. J. 4). Even assuming
these terms were part of negotiations and discussions prior to the formation of the agreement, the
terms of an unambiguous contract cannot be varied by extrinsic evidence. O.P. Link Handle Co.

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v. Wright, 429 S.W. 2d 842, 844 (Ky. 1968). Such extrinsic or parol evidence includes oral
statements or writings made prior to or contemporaneous with the written agreement, and may
not be introduced to contradict, vary, or alter the language of the document. See, e.g., Luttrell v.
Cooper Indus., Inc., 60 F. Supp. 2d 629, 631 (E.D. Ky. 1998). The Employment Agreement
between Hutson and Windsor lacks any ambiguity and by its own language contains the “entire
understanding of the parties” with regard to the employment relationship. (Am. Compl. Ex. 2 at
5). Thus, the document sets forth Hutson’s obligations under the agreement, none of which
Windsor claims to have been breached, and these additional terms are appropriately excluded
from consideration. See Energy Home, Div. of S. Energy Homes, Inc. v. Peay, 406 S.W.3d 828,
834 (Ky. 2013) (“In general, a ‘merger clause’ is a contractual provision to the effect that the
written terms of the contract may not be varied by prior agreements because all such agreements
have been merged into the written document.” (internal quotation marks omitted) (citation
omitted)); Bryant v. Troutman, 287 S.W.2d 918, 920 (Ky. 1956) (“When the negotiations are
completed by the execution of the contract, the transaction, so far as it rests on the contract, is
merged in the writing.”).
Windsor further argues that, even excluding the unincorporated representations by
Hutson, Hutson’s conduct constitutes a breach of an implied covenant of good faith and fair
dealing. (Def.’s Resp. to Pl.’s Mot. for Partial Summ. J. 11). Citing precedent for recognizing the
implied covenant, Windsor claims that Hutson’s conduct “handcuffed Windsor’s ability to make
sales” and prevented him from carrying out the “essential purposes of the contract.” (Def.’s
Resp. to Pl.’s Mot. for Partial Summ. J. 11). Hutson’s failure to fulfill the implied covenant
would, according to Windsor, absolve him of any obligations under the agreement. (Def.’s Resp.
to Pl.’s Mot. for Partial Summ. J. 11).

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The precedents cited by Windsor in support of an implied covenant of good faith and fair
dealing, however, are inapplicable as each falls outside of the employment context. See Rainier
v. Mount Sterling Nat’l Bank, 812 S.W.2d 154, 156 (Ky. 1991) (concluding that a bank breached
its implied covenant of good faith and fair dealing when it failed to give private lender notice of
its subsequent loan to debtor”); Crestwood Farm Bloodstock v. Everest Stables. Inc., 751 F.3d
434, 445 (6th Cir. 2014) (holding that there was a breach of the implied covenant after a party
deliberately blocked the sale of a horse). The dispute in this case concerns the terms of the
Employment Agreement, which explicitly defines Windsor’s employment as being “at-will.”
Kentucky law “does not recognize a claim of breach of the covenant of good faith and fair
dealing in the employment context.” Wells v. Huish Detergents, Inc., 19 F. App’x. 168, 178 (6th
Cir. 2001) (citing McCart v. Brown-Forman Corp., 713 F. Supp. 981, 983 (W.D. Ky. 1988));
Peavey v. Univ. of Louisville, 843 F. Supp. 2d 620, 630 (W.D. Ky. 2011); Beard v. McCammish
Mfg. Co., No. Civ.A.1:03 CV-107-R, 2003 WL 23811678, at *3 (W.D. Ky. Dec. 9, 2003).
Because the parties agreed that Windsor’s employment was “at-will,” under Kentucky law
Hutson was free to discharge Windsor for good cause, for no cause, or for a morally indefensible
cause and could not be required to adjust its practices to foster Windsor’s success absent a
specific provision of the agreement. See Firestone Textile Co. Div., Firestone Tire & Rubber Co.
v. Meadows, 666 S.W.2d 730, 731 (Ky. 1983) (“[O]rdinarily an employer may discharge his atwill employee for good cause, for no cause, or for a cause that some might view as morally
indefensible.” (citations omitted)).
Finally, Windsor’s claim that a genuine issue of fact exists as to whether Hutson
dismissed Windsor in bad faith to avoid paying commissions fails because it ignores Kentucky’s
“at-will doctrine,” which allows liberal dismissal power to employers. See Wymer v. JH Props.,

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Inc., 50 S.W.3d 195, 198 (Ky. 2001). Because Kentucky does not recognize an implied covenant
of good faith and fair dealing in the employment context, the only recognized exceptions to the
liberal “at-will doctrine” are “where the alleged reason for the discharge of the employee was the
failure or refusal to violate a law in the course of employment” and “when the reason for a
discharge was the employee’s exercise of a right conferred by well-established legislative
enactment.” Grzyb v. Evan, 700 S.W.2d 399, 402 (Ky. 1985) (citation omitted) (internal
quotation marks omitted). Windsor’s claim of improper dismissal does not fall within either of
these recognized exceptions. Moreover, Windsor has failed to present any facts in support of his
argument of bad faith dismissal; bare conclusions, unsupported by any factual basis, will not
stave off summary judgment.
Windsor has failed to present any facts showing Hutson was in breach of the terms of the
Employment Agreement. Furthermore, Hutson’s actions do not constitute a breach as Kentucky
law does not recognize an implied covenant of good faith and fair dealing in the employment
context. As the party bearing the burden of proof, Windsor has failed to demonstrate that there is
sufficient evidence from which a reasonable jury could rule in his favor. For the foregoing
reasons the Plaintiff’s Motion of Partial Summary Judgment, as to Count I, is granted.
B.

Count II: Fraud

This Court previously granted summary judgment in Hutson’s favor on the issue of
Windsor’s default on the Promissory Note. (Mem. Op., DN 48). In doing so, this Court found
that “Windsor’s affirmative defense of fraudulent inducement must fail.” (Mem. Op. 7). As
Windsor has failed to present any additional facts to support a claim of fraudulent inducement
and his counterclaim mirrors the previously unsuccessful affirmative defense, an identical

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analysis dictates that Windsor’s claim of fraud in the inducement must fail and summary
judgment should also be granted on Count II in favor of Hutson.
Kentucky law requires six elements for an action for fraudulent misrepresentation: “(a) a
material representation, (b) which is false, (c) known to be false or made recklessly, (d) made
with inducement to be acted upon, (e) acted in reliance thereon, and (f) causing injury.” Wahba
v. Don Corlett Motors, Inc., 573 S.W.2d 357, 359 (Ky. App. 1978) (citation omitted); accord
United Parcel Serv. Co. v. Rickert, 996 S.W.2d 464, 468 (Ky. 1999). Windsor must demonstrate
that there is a genuine dispute of material fact as to each element of the claim in order for
summary judgment to be found improper. Hartsel, 87 F.3d at 799. Claims of fraud carry a
particularly high burden, requiring a showing of “clear and convincing evidence” in order to
avoid summary judgment. See e.g., White v. Turfway Park Racing Ass’n, Inc., 909 F.2d 941, 946
(6th Cir. 1990) ), overruled in part on other grounds, Eyerman v. Mary Kay Cosmestics, Inc.,
967 F.3d 213, 217 n.4 (6th Cir. 1992) (“Where the allegation is fraud, summary judgment may
be granted unless there is sufficient probative evidence produced which, if believed, would
clearly and convincingly establish fraud.”); Fifth Third Bank v. Canfield, No. 3:12-CV-00603CRS, 2013 WL 5966886, at *3 (W.D. Ky. Nov. 8, 2013) (citing White).
Kentucky law requires that “a misrepresentation, to be actional, must concern an existing
or a past fact, and not a future promise, prophecy, or opinion of a future event, unless declarant
falsely represents his opinion of a future happening.” Steele v. Liberty Life Ins. Co., No. 2008CA-000722-MR, 2009 WL 1562940, at *4 (Ky. App. June 5, 2009) (quoting Ky. Elec. Dev.
Co.’s Receiver v. Head, 68 S.W.2d 1, 3 (Ky. 1934)) (internal quotation marks omitted); see also
Mario’s Pizzeria, Inc. v. Fed Sign & Signal Corp., 379 S.W.2d 736, 740 (Ky. 1964) (a claim for
fraudulent misrepresentation “cannot be predicated upon statements which are promissory in

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their nature . . . or upon failure to fulfill an agreement to do something at a future time or to make
good subsequent conditions which have been assured.” (quoting 24 Am. Jur. Fraud and Deceit §
267) (internal quotation marks omitted)).
All of the promises Windsor attributed to Hutson were merely predictions of future
events and do not represent past or present material facts. Windsor claims that Hutson’s denial of
making the assurances demonstrates that an issue of fact remains for the jury to decide, (Def.’s
Resp. to Pl.’s Mot. for Partial Summ. J. 13); however, as the Court has previously ruled, such a
dispute does not raise an issue as to material facts. (Mem. Op. 6).
Furthermore, Windsor has still failed to present facts to support the premise that Hutson
knew that its alleged promises to Windsor would never materialize. Any such evidence would
continue to be barred by the parol evidence rule as parties may “not base fraud in the inducement
claim[s] on their reliance on oral representations contrary to the terms of written agreements or
disclaimers that they have acknowledged in writing.” Fifth Third Bank v. Waxman, 726 F. Supp.
2d 742, 752 (E.D. Ky. 2010) (citation omitted). As this Court has previously stated in this case,
“the Agreements at issue clearly set forth the terms of Windsor’s employment, none of which
include the terms that he now claims were breached.” (Mem. Op. 6-7).
Windsor has failed to present any additional evidence of fraud on the part of Hutson.
Thus Windor’s counterclaim, like his affirmative defense—for fraudulent inducement—must
fail. See Steele, 2009 WL 1562940, at *5. Because Windsor is unable to demonstrate that there is
an issue of material fact as to an essential element of his claim, Plaintiff’s Motion for Partial
Summary Judgment on Count II is granted.

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C.

Count IV: Defamation

Hutson’s liability for the alleged defamatory statements of Lewis is dependent upon
Lewis’s relationship with Hutson as an independent contractor, employee, or agent, at the time
the statements were made. While Windsor’s Response to Hutson’s Motion for Summary
Judgment asserts Hutson’s liability for allegedly defamatory statements made by Carson, Count
IV of the Windsor’s counterclaim specifically alleges that Hutson slandered and defamed
Windsor through the actions of Lewis “as an agent, in the scope of his employment with Hutson,
and [these] were the actions of Hutson.” (Countercl. 20). Thus, the question of Hutson’s liability,
for the purposes of the present Motion for Partial Summary Judgment, is solely dependent on
Lewis’s relationship with Hutson at the time of the statements.
Generally, the party retaining an independent contractor is not liable for the tortious
conduct or negligence of the independent contractor. City of Hazard Mun. Hous. Comm’n v.
Hinch, 411 S.W.2d 686, 688 (Ky. 1967) (citing Smith v. Gennett, 385 S.W.2d 957 (Ky. 1964)).
An employer, however, may be held liable for the torts of its employees pursuant to the doctrine
of respondeat superior. See, e.g., Shedd Brown Mfg. Co. v. Tichenor, 257 S.W.2d 894, 895-96
(Ky. 1953) (citation omitted). Whether an individual is an independent contractor or an
employee “is not to be determined by a general rule of law, but by the facts in the case.” Am.
Sav. Life Ins. Co. v. Riplinger, 60 S.W. 2d 115, 117 (Ky. 1933) (citation omitted). Similarly, a
principal may be held liable to third parties for the tortious acts of an agent pursuant to the
doctrine of respondeat superior. Home Ins. Co. v. Cohen, 357 S.W.2d 674, 676 (Ky. 1962). As in
distinguishing an independent contractor and an employee, determining whether a relationship is
one of agency or independent contractor is a fact-specific inquiry where the substance of the

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relationship will prevail over the form. United Eng’rs & Constructors, Inc. v. Branham, 550
S.W.2d 540, 543 (Ky. 1977).
Under Kentucky precedent, there is a nine-factor test to determine whether a particular
individual is an independent contractor or employee:
(a) the extent of control which, by the agreement, the master may exercise
over the details of the work;
(b) whether or not the one employed is engaged in a distinct occupation or
business;
(c) the kind of occupation, with reference to whether, in the locality, the
work is usually done under the direction of the employer or by a specialist without
supervision;
(d) the skill required in the particular occupation;
(e) whether the employer or the workman supplies the instrumentalities,
tools, and the place of work for the person doing the work;
(f) the length of time for which the person is employed;
(g) the method of payment, whether by the time or by the job;
(h) whether or not the work is a part of the regular business of the
employer; and
(i) whether or not the parties believe they are creating the relationship of
master and servant.
Sam Horne Motor & Implement Co. v. Gregg, 279 S.W.2d 755, 756-57 (Ky. 1955) (citation
omitted) (internal quotation marks omitted). No one factor is determinative, though the extent of
“control” is often the key distinction between an employee and an independent contractor. Shedd
Brown Mfg. v. Tichenor, 257 S.W.2d 894, 896 (Ky. 1953) (quoting 2 Am. Jur. Agency, § 8).
Applying those factors in the present case, Windsor has presented evidence raising a
question of material fact. First, there is a material factual issue regarding the extent of control
Hutson exercised over Lewis. Determination of control “requires careful consideration of the
principal’s actual or potential control over the particular activity in which the alleged agent was
engaged at the time he injured another.” Id. While Hutson maintains that Lewis was at all times
acting as an independent contractor and exercising independence in his judgments and his work,
there is evidence that this was not the case. Lewis reported directly to several of Hutson
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executives during his time with the company, including Hutson’s president and retail finance
manager. Additionally, the record shows that Lewis was intimately involved in discussions with
Hutson executives about the company’s sales strategies, decisions about what product markets
the company would pursue, as well as decisions about selling and credit terms. (Def.’s Resp. to
Pl.’s Mot. for Summ. J. Ex 2-3, DN 58-1). Finally, Lewis met and corresponded with customers
and prospective customers representing Hutson and purported to speak on the company’s behalf,
(Def.’s Resp. to Pl.’s Mot. for Summ. J. Ex 2-3). In fact, it was in this capacity that Lewis
allegedly made the defamatory statement. (Carson Dep. 9:1-11:25, DN 58-2). Drawing all
reasonable inferences in favor of the non-moving party, it seems unusual that Hutson would
allow such decisions and actions to be made unilaterally and independently by a contractor
absent control by the company.
The issue of whether the Lewis was engaged in a distinct occupation or business also
weighs against summary judgment. The record seems to indicate that Lewis wore many hats for
Hutson. As previously discussed, he was part of decision-making teams on sales strategies,
product markets, and financing. Furthermore, Carson describes Lewis’s role as being a “sales
representative,” which is further corroborated by his presence at trade shows and his role in
negotiations with Anghel. Finally, email correspondence as well as the depositions of Hutson
executives indicate that Lewis was tasked with ensuring Hutson was “compliant on the way [it]
would invoice and ship goods, as far as to meet the compliance with countries” and to “point [it]
in the right direction” to mitigate liability. (Carson Dep. 18:5-10; Ellison Dep. 22:18-20, DN 583). Undoubtedly these roles have some crossover and codependence; however, there are elements
that raise issues regarding the exact character of Lewis’s role with Hutson.

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The factor involving the provision of instrumentalities, tools, and the place of work also
weighs against summary judgment. Windsor has not presented extensive evidence as to this
element. The record, however, shows that Lewis was supplied with a company email account for
conducting business on Hutson’s behalf, as well as business cards printed with Hutson’s sister
company’s information, which he distributed to clients and prospective clients at trade shows
while representing Hutson. This is some evidence of Hutson supplying Lewis instrumentalities
for conducting business on behalf of the company. Ultimately, this factor is not highly probative
independent of the other considerations, but as employment status is a fact-based inquiry, this
evidence contributes to the employment vs. contractor determination.
The facts relating to the length of Lewis’s relationship with Hutson also involves a
material issue of fact. The record indicates that Lewis began working with Hutson in late 2011,
and continues to work for the company, a period of nearly four years. (Carson Dep. 15:3-12;
Mem. in Supp. of Pl.’s Mot. for Partial Summ. J. 9). “If the employment has continued for a
considerable length of time, and does not have a termination date fixed, the relationship of
employer and employee is likely, as distinguished from that of independent contractor.” Ratliff v.
Redmon, 396 S.W.2d 320, 326 (Ky. 1965). Because Hutson has failed to present any agreement
or contract outlining a fixed termination date or set length of employment and considering the
facts in light most favorable to the non-moving party, this factor contributes to the determination
Lewis’s employment status.
In addition, there is evidence in the record relating to the factor of whether Lewis’s work
is a part of the regular business of the employer. As previously discussed, Lewis’s role with
Hutson involved making decisions about sales strategies, product markets, and financing.
Additionally, Lewis acted as a sales representative and was in direct contact with Hutson’s

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international clients. As both Hutson and Global Ag Solutions are involved in the business of
marketing and selling agricultural products to clients, it would appear that Lewis may have been
closely and directly involved with not only the regular, but fundamental, business of Hutson.
Finally, the Court notes that the parties’ belief is the final factor weighing against
summary judgment. In considering this factor, the Court cannot merely rely on the label Hutson
chooses to attach to the relationship, or its assertions about the relationship it intended to form
with Lewis. Perhaps the most useful evidence for this factor is a written agreement between the
parties that details the relationship and describes its contours; however, Hutson has not presented
any such document. Instead, this Court must consider the parties’ conduct. As previously
discussed, there is evidence of the parties’ conduct raising a question as to the intentions of the
parties. Additionally, there is evidence in the record that Global Ag Solutions, in correspondence
to clients, presented Lewis as an employee in charge of Hutson’s Latin America sales. (Def.’s
Decl. II Ex. 5, DN 58-1). The document, sent to customers following Windsor’s dismissal, does
nothing to differentiate Lewis from other Hutson employees, and represents Lewis as the person
to whom communications should be directed for Latin American matters. Disregarding the labels
attached by the parties, the conduct of Hutson and Lewis contributes to a question of material
fact as to the relationship intended by the parties.
Hutson contends that even if an employer/employee relationship existed, that relationship
was between Lewis and Global Ag Solutions, and thus Hutson has no liability. The record,
however, demonstrates that Hutson and Global Ag Solutions appear to be so intertwined as to
raise a genuine question as to which company benefitted from Lewis’s employment. Hutson
acknowledged that Lewis represented the company in meetings with customers and that Lewis
was expected to ensure that the business was “compliant with Hutson’s expectations.” (Carson

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Dep. 19:14-15). Furthermore, Hutson acknowledged that the international sales that Lewis was
tasked with overseeing were done through both Hutson and Global Ag Solutions, and that
invoicing for international sales would be done through either company depending on the
circumstances. Hutson relies on Windsor’s evidence that Lewis was given a Global Ag Solutions
email address and business cards as demonstrating that no relationship existed between Hutson
and Lewis; however, this ignores the fact that Ellison and Windsor—whose employment status
under Hutson is uncontroverted—were also given Global Ag Solutions email addresses.
As demonstrated above, sufficient evidence has been presented to raise a question of
material fact in regard to numerous factors in Kentucky’s test for employment status.
Furthermore, there remains a genuine issue regarding whether Lewis’s employment was for the
benefit of Hutson, Global Ag Solutions or both at the time of the allegedly defamatory statement.
Because Hutson has failed to demonstrate that no genuine issue of material facts exists as to
Lewis’s employment status at the time of the allegedly defamatory statements, Hutson’s Motion
for Partial Summary Judgment as to Count IV of Windsor’s Counterclaim is denied.
IV.

CONCLUSION

For the foregoing reasons, IT IS HEREBY ORDERED that Plaintiff’s Motion for
Partial Summary Judgment (DN 52) is GRANTED on Counts I and II but is DENIED on Count
IV of the Counterclaim.

Greg N. Stivers, Judge
United States District Court
July 8, 2015

cc:

counsel of record

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