Background
Scotty’s Contracting and Stone, LLC served as the contractor on a Kentucky Transportation Cabinet road project and subcontracted retaining-wall work to VanMeter Contracting, Inc. In 2012, a concrete form rose, toppled, and collapsed, killing VanMeter employee Kenneth Decker and injuring employees John McIntosh, Steve Nelson, and Jamie Groce. The workers and related claimants received workers’ compensation benefits and also sued seven Cabinet engineers, alleging that they negligently failed to inspect the work and shut down unsafe operations.
The engineers asserted indemnity claims against Scotty’s and VanMeter. They later assigned their purported claims to the plaintiffs in exchange for a covenant not to execute against them. After excluding Scotty’s and VanMeter from participating, the circuit court conducted a non-adversarial bench trial at which only the plaintiffs presented evidence. It apportioned all fault to the engineers and ultimately entered judgment against Scotty’s for more than $12.5 million in compensatory damages and $10 million in punitive damages.
The Court’s Holding
The Court of Appeals reversed and directed the circuit court to dismiss every claim. It held that KRS 371.180 rendered void any construction-contract provision purporting to require Scotty’s to indemnify the Cabinet or its employees for their own negligence. The indemnity language in Standard Specifications section 107.13 also lacked the unmistakable clarity Kentucky law requires for an agreement indemnifying a party against its own negligence. Because the engineers possessed no enforceable indemnity claim, their assignment transferred nothing to the plaintiffs.
The court further held that the proceedings improperly allowed the plaintiffs to obtain indirectly from Scotty’s—an employer protected by workers’ compensation exclusivity—damages they could not recover from it directly. Independently, the circuit court violated Scotty’s due-process right to participate and its unwaived right to a jury trial. The liability finding also failed because the engineers’ failure to inspect could not be the sole proximate cause of the collapse, and the circuit court never determined the primary and efficient cause or established the predicate unsafe condition that an inspection would have revealed.
Key Takeaways
- KRS 371.180 makes a construction-contract provision indemnifying a party or its employees for their own negligence void and unenforceable.
- An assignment cannot transfer an indemnity claim that the assignor never possessed, and a covenant not to execute does not cure that defect.
- A court may not exclude an affected employer from a proceeding under KRS 342.700(1), disregard an unwaived jury demand, or assign all fault to inspectors without establishing the primary cause of the accident.
Why It Matters
The decision limits efforts to route workplace-injury damages back to an employer through an assigned indemnity claim when the Workers’ Compensation Act bars direct tort recovery. It also reinforces Kentucky’s statutory prohibition against construction contracts that shift liability for an indemnitee’s own negligence.
The opinion underscores that settlements involving assignments and covenants not to execute cannot displace adversarial process, participation rights, jury-trial rights, or proof of causation. Because the plaintiffs had agreed not to recover from the engineers and could recover no additional damages from Scotty’s or VanMeter, the court ordered dismissal rather than another trial.