Law of the case and failure to raise issue on appeal on remand: BROOKS V. LEXINGTON-FAYETTE URBAN COUNTY HOUSING AUTHORITY (COA 11/9/2007)

BROOKS V. LEXINGTON-FAYETTE URBAN COUNTY HOUSING AUTHORITY
CIVIL PROCEDURE:  Post judgment interest, law of the case
TORTS: POST-JUDGMENT INTEREST AND STATE AGENCIES

2006-CA-000526

PUBLISHED: REVERSING AND REMANDING
PANEL:  ACREE PRESIDING; DIXON, KELLER CONCUR
COUNTY: FAYETTE
DATE RENDERED: 11/09/2007

Short digest: In this case, a plaintiff was awarded post judgment interest against a state agency which appealed all the way to SCOKY and prevailed on other issues but did not appeal the award of post-judgment interest.  When the trial court heard the matter on remand, the agency’s motion to rescinded and set aside the first award of post judgment interest was granted.  Even though the law in Kentucky provides that a state agency is not liable for post judgment interest on an award, the state agency in this case had failed to appeal that issue the first time, and thus that portion of the award is final and subject to the law of the case on remand and the trial court cannot rescind and set aside the original award of post-judgment interest.

Longer digest:

This appeal reached COA for the second time having a 15-year-long history of litigation. The issue presented was whether the trial court erred, upon remand from the Kentucky Supreme Court and without the Court’s instruction, in revoking an award of post-judgment interest on the basis of sovereign immunity.

In 1992, Brooks initiated a suit against her former employer, Lexington-Fayette Urban County Housing Authority (Housing Authority) for race discrimination and retaliation in contravention of the Kentucky Civil Rights Act (KCRA).  At trial, the jury found for the Housing Authority on Brooks’ claim of race discrimination, but awarded her $40,000 in damages on her claim of retaliation.  The court allowed post-judgment interest at 12% as set forth in Kentucky Revised Statute (KRS) 360.040. The trial court also awarded Brooks her costs and attorney fees “in such amount as the Court shall determine upon application by Plaintiff.” 

The first appeal that went up to the Supreme Court was on issues other than the award of post-judgment interest.  Upon remand of the case, the Housing Authority relied on a Supreme Court decision decided the same day as Brooks (Ky. Dept. of Corrections v. McCullough, 123 S.W.3d 130 (2003) in which the Supreme Court held that a state agency is not liable for post-judgment interest on a judgment obtained under the KCRA.  The Housing Authority then moved the circuit court to eliminate 
post-judgment interest from the 1997 which was sustained by circuit court in reliance upon Powell v. Board of Education of Harrodsburg, 829 S.W.2d 940 (1992) for the proposition that an award of interest pursuant to KRS 360.040 is not applicable to judgments against state agencies.

COA held that when the trial court rescinded that portion of its original Judgment allowing interest, it did so contrary to the law of the case doctrine applicable to this case. Consequently, the circuit court’s judgment that reinstates the June 7, 1999, judgment without the allowance of post-judgment interest is reversed.

SCOKY has plainly stated that “a judgment is not final so long as post judgment motions are available and time for making such a motion remains[.]”  Kurtsinger v. Bd. Of Trustees of Kentucky Retirement Systems, 90 S.W.3d 454, 458 (Ky. 2002). Moreover, the Supreme “Court has made clear that a ruling on a post-judgment motion is necessary to achieve finality[.]” Gullion v. Gullion, 163 S.W.3d 888, 891 (Ky. 2005).

The law of the case doctrine is similar to but distinct from the doctrine of res judicata. “There is a difference between such adherence (the law of the case doctrine) and res adjudicata.  One directs discretion; the other supersedes it and compels judgment.

In other words, in one it is a question of power, in the other of submission.” Southern Ry. Co. v. Clift, 260 U.S. 316, 43 S.Ct. 126, 67 L.Ed. 283, 284 (1922).

The McCullough Court concluded that a state agency is immune from any judgment interest entered upon the KCRA.  Thus, there occurred no change of law during the first appeal.

No appellate decision affirmatively held in the first appeal that interest may be imposed on KCRA-based judgments. It is the consequence of valid judgments coupled with operation of a valid legal doctrine – the law of the case doctrine – that binds the Housing Authority to pay the interest at issue. The judgment of the Fayette Circuit Court is REVERSED and REMANDED for disposition in accordance with this opinion.

Digested by Michael Stevens

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