April 20, 2012 COA Minutes — Nos. 350-367 (18 decisions; 4 published)

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PUBLISHED DECISIONS OF COA:

355.  PROBATE. INTESTACY.  HEIRS.
BARTLEY (PAMELA)
VS.
CULBERTSON (JUDITH P.)
OPINION AFFIRMING
COMBS (PRESIDING JUDGE)
TAYLOR (CONCURS) AND NICKELL (DISSENTS AND FILES SEPARATE OPINION)
2010-CA-001937-MR
2010-CA-002124-MR
TO BE PUBLISHED
MONTGOMERY

COMBS, JUDGE: These consolidated appeals arise from the entry of summary judgment in favor of Judith Culbertson in her declaratory judgment action. She sought a determination by the Montgomery Circuit Court that she is the biological child of Carl Bartley, deceased, and that she is, therefore, an heir at law to his Estate through intestacy. We affirm.

356.  MOTIONS FOR NEW TRIAL. IMPROPER ARGUMENTS.
GOSSETT (VELDA), ET AL.
VS.
CROCKETT (MERRILL)
OPINION AFFIRMING
COMBS (PRESIDING JUDGE)
TAYLOR (CONCURS) AND NICKELL (DISSENTS AND FILES SEPARATE OPINION)
2010-CA-002079-MR
TO BE PUBLISHED
PULASKI

COMBS, JUDGE: Anthony and Velda Gossett appeal the order of the Pulaski Circuit Court that denied their motion for a new trial. After reviewing the record and the law, we affirm.

STD OF REVIEW FOR NEW TRIAL:  Our standard of review is limited to the determination of whether the trial court abused its discretion. McVey v. Berman, 836 S.W.2d 445, 448 (Ky. App. 1992). The decision of a trial court enjoys a presumption of correctness, and we may only reverse if it was clearly erroneous. Id. A court’s actions are clearly erroneous if they are not supported by substantial evidence. Fugate v. Commonwealth, 62 S.W.3d 15, 18 (Ky. 2001).

ARGUMENT:

The Gossetts argue that the court erred in allowing the jury to hear the following statement of Crockett’s counsel during closing arguments: “This matter has held the prospect of financial ruin over [Crockett’s] head for over two years.” At that point, the Gossetts’ counsel interrupted the closing argument and objected. In a bench conference, the court agreed that the statement was improper. The Gossetts asked the court to inform the jury that Crockett had an insurance policy that would cover any damages. Instead, the court elected to cure the error by strongly admonishing each jury member that consideration of either party’s financial condition was not permitted. The Gossetts now contend that the admonition was insufficient to cure the harm resulting from the statement of Crockett’s counsel. We disagree.

It is “universally condemned” for counsel to refer to the financial condition of one of the parties for the purpose of persuading the jury. Murphy v. Cordle, 197 S.W.2d 242, 243 (Ky. 1946). But, it is also settled law in Kentucky that an admonition is deemed to cure the error created by an improper argument unless the argument “was so prejudicial, under the circumstances of the case, that an admonition could not cure it.” Price v. Commonwealth, 59 S.W.3d 878, 881 (Ky. 2001). (Internal citations omitted). Furthermore, if an admonition was given, we must presume that the jury heeded and followed it. Combs v. Commonwealth, 198 S.W.3d 574, 581 (Ky. 2006).

In discussing improper arguments, our Court has held that we must determine:

whether the probability of real prejudice is sufficient to warrant a reversal. In making this determination, each case must be judged on its unique facts. An isolated instance of improper argument, for example, is seldom deemed prejudicial.

Rockwell Intern. Corp. v. Wilhite, 143 S.W.3d 604, 631 (Ky. 2003). (Emphasis added.)

Under the facts of this case, we cannot conclude that the statement was so prejudicial that it could not be cured by an admonition. The statement was isolated. Most of Crockett’s closing argument was a summary of the factual evidence that had been presented. It pointed out inconsistencies among the testimonies of the Gossetts’ witnesses. Crockett reminded the jury of his experts’ evaluation of the accident scene that indicated that the motorcycles had encountered the slick substance in the roadway before they reached the area that had been burned. A state trooper had testified that the slick substance appeared to be spillage from a vehicle. Eleven of the twelve jurors did not believe that Crockett was liable for the spillage. As distinguished from cases that have been reversed due to improper arguments, Crockett did not dwell on the subject of financial circumstances. The issue of damages per se was never even considered since no liability was found as a threshold matter. See Rockwell, supra; Murphy, supra.

Additionally, the court’s admonition to the jury was emphatic and clear. It instructed the jury not to consider the financial condition of any party. It then asked the members of the jury if they understood; it did not permit counsel to resume until the jury had responded. Therefore, the court’s denial of the Gossetts’ motion for a new trial was based on substantial evidence and was not clearly erroneous.

357.  REAL PROPERTY.
LEWIS (ROBERT KNOX)
VS.
MANNING (DEBORAH L.), ET AL.
OPINION REVERSING AND REMANDING
LAMBERT (PRESIDING JUDGE)
THOMPSON (CONCURS) AND CAPERTON (DISSENTS AND FILES SEPARATE OPINION)
2010-CA-002162-MR
TO BE PUBLISHED
MAGOFFIN

LAMBERT, SENIOR JUDGE: Robert Knox Lewis appeals from a judgment of the Magoffin Circuit Court entered following a bench trial finding in favor of the Appellees. Appellant had filed an action against Appellees Deborah L. Manning, Terry Littleton, and Wilma Littleton seeking to void or reform a deed of conveyance between the parties on the grounds that the subject property contained fewer acres than represented in the deed. After careful review, we reverse and remand for further proceedings consistent with this opinion.

359
WILLIAMS (TRISHA ANN)
VS.
CLINE (RANDY), ET AL.
OPINION AFFIRMING IN PART, REVERSING IN PART AND REMANDING
LAMBERT (PRESIDING JUDGE)
CAPERTON (CONCURS) AND THOMPSON (CONCURS)
2011-CA-000444-MR
TO BE PUBLISHED
ROWAN

LAMBERT, SENIOR JUDGE: Trisha Ann Williams appeals from an order dismissing her claims against the Appellees, Randy Cline and Keith McCormick, for malicious prosecution, abuse of process, and negligence. On appeal, Williams argues that the Commonwealth cannot coerce a criminal defendant into signing a stipulation of probable cause and then later use that stipulation to avoid liability. Upon a review of the record, we affirm in part and reverse in part, with instructions for the trial court to conduct an evidentiary hearing and make specific findings on remand.

We first address Williams’s claim for abuse of process. Williams alleges that McCormick abused legal process when he requested her to stipulate to probable cause for improper reasons. Namely, Williams alleges that McCormick requested the probable cause stipulation, not in the interests of justice, but for the ulterior purpose of insulating himself from liability. Indeed, Williams claims the Commonwealth was in possession of exculpatory audio/visual recordings at the time they requested her stipulation.

An abuse of process claim exists where an individual “uses a legal process, whether criminal or civil, against another primarily to accomplish a

3 Specifically, Williams wants access to the audio and video tapes of the drug transaction. She pled in her complaint that detectives told her such tapes were in existence at the time of her interrogation. She further alleges that her counsel was informed the recordings clearly showed she was not involved with the crimes. She does not state how this information was obtained or where it was obtained from. Nonetheless, as we are required to accept the facts in her pleadings as true and view them in a light most favorable to her, we will assume that audio and video recordings exist for the purposes of review and that such tapes are exculpatory

purpose for which that process is not designed[.]” Sprint Communications Co., L.P. v. Leggett, 307 S.W.3d 109, 113 (Ky. 2010). We find there is a genuine issue of fact as to whether McCormick requested a probable cause stipulation for improper reasons.

However, before determining whether a reversal is required, we must first consider whether McCormick is immune from suit on such a claim. Our Supreme Court held in McCollum v. Garrett, 880 S.W.2d 530 (Ky. 1994) that a public prosecutor sued in his official capacity has absolute immunity for all acts or omissions taken after the commencement of formal prosecution, where the prosecutor is acting within his lawful authority. Id. at 534-535. Indeed, “[a]bsolute immunity . . . extends to . . . prosecutors with respect to the initiation and pursuit of prosecutions[.]” Yanero v. Davis, 65 S.W.3d 510, 518 (Ky. 2002). The rationale behind this immunity is to protect prosecutor’s offices “against the deterrent effect of a threat of suit alleging improper motives where there has been no more than a mistake or a disagreement[.]” Id.

However, as the McCollum Court noted, prosecutors sued in their individual capacities are only afforded qualified official immunity when acting as an investigator and in the period leading up to the bringing of criminal charges. McCollum, 880 S.W.2d at 534-535. Qualified immunity applies when an official is sued in an individual capacity and the act(s) in question were (1) discretionary in nature, (2) taken in good faith, and (3) were within the scope of the individual’s official duties. Yanero, 65 S.W.3d at 522.

In the present case, McCormick had already commenced prosecution at the time he requested the stipulation from Williams. Thus, he is entitled to absolute immunity so long as he was not acting outside of his lawful authority (such as by forging a judge’s signature on an arrest warrant). McCollum, 880 S.W.2d at 537; Dugger v. Off 2nd, Inc., 612 S.W.2d 756 (Ky. 1980). Regardless of the propriety of his motives, McCormick was not acting outside of his authority as a prosecutor when he offered to dismiss the charges for a stipulation of probable cause. Hence, McCormick is immune from suit on an abuse of process claim.

Accordingly, we affirm the trial court’s dismissal of this claim.

Malicious Prosecution

We next consider Williams’s claim for malicious prosecution. Under Kentucky law, in order to establish a claim for malicious prosecution, six elements must be established by the plaintiff: (1) the institution of judicial proceedings, (2) by or at the insistence of the Defendant, (3) the resulting termination of such proceedings in the claimant’s favor, (4) malice in the institution of such proceedings, (5) want or lack of probable cause in such proceedings, and (6) injury or damages suffered by the plaintiff as a result thereof. Davidson v. Castner–Knott Dry Goods Co., Inc., 202 S.W.3d 597, 602 (Ky. App. 2006).

This Court has previously held that a dismissal without prejudice does not necessarily foreclose a later claim for malicious prosecution. Davidson, 202 S.W.3d at 605. In the present case, although the charges were dismissed without prejudice, it does appear the dismissal was for want of evidence. Thus, we conclude that the termination was in Williams’s favor under Davidson.

However, Williams stipulated to probable cause as a part of her dismissal agreement, and “want or lack” of probable cause is also a necessary element for a claim of malicious prosecution. Williams asks us to disregard the stipulation of probable cause because it was obtained by coercion.

At the outset, we note that this type of dismissal agreement was held constitutional by the United States Supreme Court in Town of Newton v. Rumery, 480 U.S. 386, 107 S. Ct. 1187, 94 L. Ed. 2d 405 (1987). The Rumery court, applying “traditional common law principles” to federal law, held that a defendant who accepted a municipality’s offer to dismiss criminal charges against him in exchange for a waiver of claims could not later repudiate the waiver and sue the municipality under 42 U.S.C. § 1983. The Rumery court rejected the argument that such waiver agreements are “inherently coercive” or that they are per se invalid. Rumery, 480 U.S. at 393, 107 S. Ct. at 1192. Nonetheless, the Court suggested that such agreements must be voluntary and procured in the absence of prosecutorial misconduct. Id. at 398.

In Coughlen v. Coots, 5 F.3d 970, 974 (6th Cir. 1993), the Sixth Circuit clarified the holding in Rumery by concluding that before a court may allow the enforcement of a release-dismissal agreement, it must first determine that “(1) the agreement was voluntary; (2) there was no evidence of prosecutorial misconduct; and (3) enforcement of the agreement will not adversely affect relevant public interests.” Id. The court noted that the burden falls upon the party seeking to invoke the dismissal agreement as a defense.

In the present case, the dismissal agreement did not require a waiver of claims (as in the § 1983 actions cited above), but instead required a stipulation of probable cause. Nonetheless, a stipulation to probable cause effectively precludes later suit for malicious prosecution in the Commonwealth. While this is not a § 1983 action, we are persuaded by the wisdom behind the Sixth Circuit’s reasoning in Coughlen and the Supreme Court’s reasoning in Rumery that a trial court must first make specific findings of fact that the agreement was voluntary, that there was no evidence of prosecutorial misconduct, and that public policy interests would not be affected before allowing the agreement to preclude suit for malicious prosecution.

Hence, we reverse and remand for an evidentiary hearing and a determination of whether the dismissal agreement met the above criteria. If the court chooses not to allow the dismissal agreement as a defense based upon its findings, it shall only consider actions taken by Cline4 or McCormick during the period in which they were acting as investigators, as delineated in McCollum, supra, and apply a qualified immunity analysis. Their actions taken subsequent to formal prosecution are cloaked with absolute immunity. Id.

Negligence

Finally, we reach Williams’s claims of negligence against McCormick and Cline. Williams alleges that both Appellees breached the standard of ordinary care when deciding to bring charges of trafficking against her despite exculpatory evidence in their possession. During the period of investigation, McCormick had not “commenced prosecution,” and thus his actions and Cline’s during that period are not cloaked with absolute immunity. Thus, we must consider whether McCormick and Cline are insulated from liability under a theory of qualified immunity. McCollum, 880 S.W.2d 534-535. Officers and employees of the state, when sued for negligence in their individual capacities, are immune from suit for discretionary acts within the scope of their authority, so long as such acts are taken in good faith. Yanero, 65 S.W.3d at 521.

In the present case, it is clear that McCormick and Cline’s actions were discretionary in nature (as the process of investigating a suspect and deciding whether to swear out a criminal complaint cannot be ministerial in nature) and were within the scope of their authority. Thus, the only remaining question is whether their actions were taken in good faith. We believe that there is an issue of material fact as to whether McCormick and Cline acted in good faith. Similar to McCollum, supra, the question here seems to be whether Cline and McCormick learned that Williams “was misidentified as the offender during the investigation and prior to prosecution, but nevertheless initiated the prosecution.” McCollum, 880 S.W.2d at 535.

Hence, we reverse and remand to the Rowan Circuit Court on the issue of negligence. On remand, the court shall consider whether Cline and McCormick acted in good faith. As part of this analysis, the court should consider whether the Commonwealth was in possession of audio/video recordings that were exculpatory yet knowingly proceeded against Williams anyway.

In sum, we affirm the trial court’s dismissal of the abuse of process claim and reverse and remand for an evidentiary hearing and for specific findings on the claims of malicious prosecution and negligence.

364.  TORTS.  BREACH OF FIDUCIARY DUTY. TORTIOUS INTERFERENCE WITH CONTRACT.  TORTIOUS INTERFERENCE WITH PROSPECTIVE BUSINESS ADVANTAGE.
SNOW PALLET, INC., ET AL.
VS.
MONTICELLO BANKING COMPANY, ET AL.
OPINION AFFIRMING
LAMBERT (PRESIDING JUDGE)
CAPERTON (CONCURS) AND THOMPSON (CONCURS)
2011-CA-000696-MR
TO BE PUBLISHED
CLINTON

LAMBERT, SENIOR JUDGE: Snow Pallet, Inc., Gleta Stalcup, and Jackie Stalcup appeal from a summary judgment of the Clinton Circuit Court dismissing their claims of breach of fiduciary duty, interference with contractual relations, and interference with prospective business advantage against Monticello Bankshares, Inc., and Monticello Banking Company. Upon a thorough review of the record, we affirm the Clinton Circuit Court.

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