Aug. 31, 2012 COA Minutes — Nos. 773-789 (17 decisions; 5 To Be Published)

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PUBLISHED DECISIONS OF COA:

776.  BUSINESS LAW.  BUY-SELL; KEY MAN INSURANCE.
ROBERTS (VALARIE M.), ET AL.
VS.
ROBERTS (JOHN K.), ET AL.
OPINION AFFIRMING
LAMBERT (PRESIDING JUDGE)
NICKELL (CONCURS) AND CAPERTON (DISSENTS)
2010-CA-000653-MR
2011-CA-000648
TO BE PUBLISHED
DAVIESS

LAMBERT, JUDGE: This is an appeal from the Daviess Circuit Court’s entry of summary judgment in favor of the Appellees, John K. Roberts and Roberts MotorSales, Inc. and the court’s subsequent denial of a motion for relief under Kentucky Rules of Civil Procedure (CR) 60.02. After careful review of the record, we affirm the rulings of the Daviess Circuit Court.

William A. Roberts (Tony) and John Roberts were brothers and equal owners of Roberts Motor Sales, Inc. On February 28, 1980, Roberts Motor Sales and Tony executed and consummated a contract controlling stock ownership.  On May 3, 2004, Roberts Motor Sales purchased a key employee life insurance policy in the principal amount of $1,000,000.00 for the life of Tony Roberts. Roberts Motor Sales was the owner and beneficiary of the policy.

Tony committed suicide on January 31, 2009. This case began on March 11, 2009, when the Plaintiffs, Valarie M. Roberts, Individually and as Executrix of the Estate of William A. Roberts, Deceased (the Appellants), filed a verified complaint for an ex parte restrainingorder following Tony’s death. Initially, the Appellants sought discovery onwhether there was a “Buy/Sell Agreement” between John and Tony Roberts and on the value of Roberts Motor Sales. The Appellants also sought to protect the above- mentioned key-employee life insurance proceeds payable to Roberts Motor Sales. Because of the possible irreparable harm, the trial court granted the requested ex parte relief, and the funds were ordered restrictively held until the parties could be heard on the Appellants’ motion.

Thereafter, the Appellees filed a motion for summary judgment in August 2009, with accompanying corporate records and affidavits of corporate employees and of John Roberts, disputing the existence of the alleged buy/sell agreement between the shareholders. The motion was supported by the 1980 contract. The Appellants opposed the motion for summary judgment, arguing that it was premature because the 1980 contract had only been recently discovered, and reasonable discovery had not been allowed on the validity of the document, the method of share valuation, or the amount of Tony’s debt. However, the trial court granted summary judgment in favor of the Appellees on October 21, 2009.

The Appellants then filed a motion to set aside the order of summary judgment, arguing that no reasonable discovery had been allowed. On December 1, 2009, the trial court entered an order setting aside the order of summary judgment to allow the Appellants to inspect Roberts Motor Sales’ corporate and financial records but did not allow any other form of discovery to occur. The additional discovery was to be completed by January 1, 2010.

The Appellants’ main argument on appeal is that summary judgment

was entered before they had an adequate opportunity to verify and validate the Appellees’ claims regarding the validity of the 1980 contract, the assets of the parties, and Tony’s corporate debts.

A review of the record indicates that this case began on March 11, 2009, when the Appellants filed their original complaint. Summary judgment was granted in October 2009, approximately seven months after initiation of the complaint, but was later set aside to allow an additional month of discovery. In their brief, the Appellants argue that their efforts “to conduct discovery depositions into the subject matter of this lawsuit and the 1980 document were denied by Appellees and by the Trial Court.” However, the record indicates that the Appellants did in fact conduct discovery in the form of depositions and inspections of the corporate records for Roberts Motor Sales. In particular, the Appellants deposed Kathy Howard, the comptroller and bookkeeper for Roberts Motor Sales, John Roberts, and Pat McNulty. Furthermore, in the additional month of discovery, the Appellees made the financial documents and records they utilized to determine Tony’s indebtedness to Roberts Motor Sales available for inspection by the Appellants. Rather than utilizing the opportunity to inspect and copy the records, the Appellants’ attorney left after two hours and never returned, without letting anyone know whether he would be back to conduct additional discovery.

Given the Appellant’s opportunity to conduct discovery and their failure to adequately utilize such discovery methods, it does not appear that summary judgment was premature in this case. The Appellees need not show that the Appellants completed discovery, merely that they had the opportunity to do so. Hartford Ins. Group, supra. Furthermore, despite the adequate opportunity to conduct discovery, the Appellants did not present any evidence that created a material issue of fact precluding the Appellees from being entitled to judgment as a matter of law.

The Appellants also appeal the trial court’s denial of their CR 60.02(d) and (f) motion. It is well-settled under Kentucky law that CR 60.02 addresses itself to the sound discretion of the trial court. White v. Commonwealth, 32 S.W.3d 83, 86 (Ky. App. 2000). “Given the high standard for granting a CR 60.02 motion, a trial court’s ruling on the motion receives great deference on appeal….” Barnett v. Commonwealth, 979 S.W.2d 98, 102 (Ky. 1998) (internal citations omitted). Therefore, on the appeal of a denial of a CR 60.02 motion, the trial court’s ruling will not be overturned except for abuse of discretion. Id.; Lawson v. Lawson, 290 S.W.3d 691, 693-94 (Ky. App. 2009). “The test for abuse of discretion is whether the trial court’s decision is arbitrary, unreasonable, unfair, or unsupported by sound legal principles.” Lawson, supra, at 694 (internal citation omitted).

Based on the foregoing, we affirm the entry of summary judgment by order dated March 10, 2010, and the denial of CR 60.02 relief entered on March 7, 2011.

779.  TORTS.  STRICT LIABILITY AND BLASTING CASES.
STATHERS (RANDALL L.), ET AL.
VS.
GARRARD COUNTY BOARD OF EDUCATION, ET AL.
OPINION AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
ACREE (PRESIDING JUDGE)
MOORE (CONCURS) AND VANMETER (CONCURS)
2010-CA-002212-MR
2010-CA-002281-MR
TO BE PUBLISHED
GARRARD

ACREE, CHIEF JUDGE: Randall and Bobbie Stathers, and Brandalyn Elkins appeal the Garrard Circuit Court’s November 8, 2010 order granting summary judgment in favor of appellees Garrard County Board of Education (Board), Branscum Construction Company, Inc. (Branscum), Elza Construction, LLC (Elza), Impact Drilling & Blasting, Inc.,1 and Irvine and Pyles Drilling Company, Inc. (Irvine and Pyles). The circuit court found that the Stathers and Elkins failed to present sufficient evidence that blasting by the appellees caused damage to their respective homes.

The Board, Branscum, and Elza cross-appeal the circuit court’s June 7, 2010 order finding that the Board is not entitled to governmental immunity and, in turn, denying the Board’s motion to dismiss.

For the reasons that follow, we reverse as to the appeal, affirm as to the cross-appeal, and remand for additional proceedings.

CAUSE OF ACTION – BLASTING DAMAGES

his is a blasting case and, therefore, a strict liability case. See Island Creek Coal Co. v. Rodgers, 644 S.W.2d 339, 348 (Ky. App. 1982) (“Kentucky has expressly renounced the ‘negligence’ theory in blasting cases.”); David J. Leibson, 13 Ky. Prac. Tort Law § 12:6 (2011) (“Blasting is an activity which has repeatedly been held subject to strict liability.”). Under a blasting strict liability analysis, proof of causation between the blasting and the claimed property damage is required. Holbrook v. Rose, 458 S.W.2d 155, 157 (Ky. 1970) (noting “one common denominator” between strict liability and similar tort-based causes of action is the need to establish causation); Island Creek Coal, 644 S.W.2d at 348 (explaining it is only necessary to prove causation and damages in blasting strict liability cases); Wolf Creek Collieries Co. v. Davis, 441 S.W.2d 401, 402-03 (Ky. App. 1969). The Appellants must therefore show a genuine issue of material fact exists as to causation to maintain their strict liability claim and survive summary judgment. We think they have.

We begin by noting that “causation . . . presents a mixed question of law and fact.” Pathways, Inc. v. Hammons, 113 S.W.3d 85, 89 (Ky. 2003) (citing Deutsch v. Shein, 597 S.W.2d 141, 145 (Ky. 1980)). Therefore, whether a plaintiff’s damage was caused by the tort defendant typically “should be left to the jury to determine.” Eichstadt v. Underwood, 337 S.W.2d 684, 686 (Ky. 1960) (reviewing denial of defendant’s directed verdict motion). It is not surprising then that, with the exception of medical malpractice cases,4 we could find no Kentucky appellate opinion affirming any grant of summary judgment based on a plaintiff’s inability to establish, through expert testimony, the existence of a genuine issue of the material fact – in this case, a genuine issue regarding causation.

Despite our inability to locate such a case, we acknowledge that there is an exception to this general rule. That exception is where it appears impossible for the nonmoving party to produce evidence at trial warranting a judgment in his favor. Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476, 480 (Ky.

4 “Under Kentucky law, a plaintiff alleging medical malpractice is generally required to put forth expert testimony to show that the defendant medical provider failed to conform to the standard of care.” Blankenship v. Collier, 302 S.W.3d 665, 670 (Ky. 2010) (citation omitted). “When it is evident that the plaintiff has not secured a single expert witness and has failed to make any expert disclosures after a reasonable period of time, there truly is a failure of proof and a summary judgment motion is appropriate.” Id. at 674. This rule has never been applied to a blasting case and, to our understanding, has never been applied to any case other than medical malpractice cases. Even in these cases, summary judgment is not granted for lack of proof of causation; summary judgment is granted because there was no proof of the standard of care (i.e., the measure of the duty) and, therefore, no proof of a breach. Id. (Plaintiff “never created a genuine issue of material fact regarding [defendant physician’s] negligence by identifying a medical expert who could testify about a breach of the standard of care.”).

1991) (citing Paintsville Hospital Co. v. Rose, 683 S.W.2d 255 (Ky. 1985)). The word “impossible” in the context of the summary judgment standard is to be “used in a practical sense, not in an absolute sense.” Perkins v. Hausladen, 828 S.W.2d 652, 654 (Ky. 1992). As we explain, we do not believe it is a practical impossibility that Appellants will be able to produce evidence at trial warranting a judgment in their favor.

784.  TORTS.  PARENTAL DUTY/LIABILITY FOR MINOR HOSTING PARTY AND ALCOHOL INVOLVED.
MARTIN (CODY)
VS.
ELKINS (KEITH)
OPINION AFFIRMING
LAMBERT (PRESIDING JUDGE)
STUMBO (CONCURS) AND COMBS (CONCURS)
2011-CA-000862-MR
TO BE PUBLISHED
JEFFERSON

LAMBERT, SENIOR JUDGE: Cody Martin appeals from a summary judgment of the Jefferson Circuit Court holding that Keith Elkins breached no duty under Kentucky law by allowing his son to host a party at his residence where alcoholwas consumed by teenagers. On appeal, Martin argues that the Jefferson Circuit Court erred in its decision.

Thus, the trial court was correct in granting summary judgment. As has oft been stated, the proper purpose of a summary judgment “is to terminate litigation when, as a matter of law, it appears that it would be impossible for the respondent to produce evidence at the trial warranting a judgment in his favor[.]” Id. at 503.

Accordingly, we affirm the Jefferson Circuit Court.

786.  LIEN RELEASE SUIT;  MANDATORY NOTICE REQUIREMENTS.
CITIFINANCIAL, INC.
VS.
BRATTON (EDNA), ET AL.
OPINION AND ORDER REVERSING AND REMANDING; AND DENYING MOTION TO DISMISS
LAMBERT (PRESIDING JUDGE)
CLAYTON (CONCURS) AND STUMBO (CONCURS)
2011-CA-001152-MR
TO BE PUBLISHED
FAYETTE

AMBERT, JUDGE: CitiFinancial, Inc. has appealed from several rulings of the Fayette Circuit Court culminating in a $93,163.73 judgment in favor of the property owners in a lien release suit. On appeal, CitiFinancial contends that because the property owners did not comply with the statutory notice requirements contained in Kentucky Revised Statutes (KRS) 382.365, the circuit court erred in entering a judgment in their favor and should have entered a judgment in CitiFinancial’s favor. Because we agree that the property owners failed to comply with the mandatory notice requirements set forth in KRS 382.365, we must hold that the circuit court committed reversible error. Therefore, we reverse the judgment.

787.  FAMILY LAW.  CUSTODY OF MINORS.
WILLIAMS (LINDA)
VS.
FRYMIRE (DAVID)
OPINION AFFIRMING
LAMBERT (PRESIDING JUDGE)
NICKELL (CONCURS) AND CAPERTON (CONCURS)
2011-CA-001568-ME
TO BE PUBLISHED
CALLOWAY

LAMBERT, JUDGE: Linda Williams has appealed from the judgment of the Calloway Family Court modifying custody of her minor daughter, Jessica Frymire, from sole to joint and naming Linda’s former husband and Jessica’s father, David Frymire, as the primary residential parent. Linda contends that the court did not have jurisdiction to consider David’s motion to modify, and if the forum was appropriate, abused its discretion in modifying the primary residential parent. Based upon our review of the record, including the modification hearing, we disagree with Linda’s arguments and therefore affirm.

 

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