Kentucky Court Report - SCOKY & COAKY

Jury's determination of testamentary capacity when voiding will was res judicata on capacity (but not on undue influence) for will executed 16 days earlier: ROTHWELL V. SINGLETON (COA 6/6/2008)

ROTHWELL V. SINGLETON
WILLS AND ESTATES:  Testamentary capacity and res judicata
2007-CA-001348
PUBLISHED:  REVERSING AND REMANDING
PANEL:  THOMPSON PRESIDING; KELLER, GRAVES CONCUR
LINCOLN COUNTY
DATE RENDERED: 6/6/2008

This published Court of Appeals will contest case involves the usual issues of capacity and undue influence. What makes this one of some interest is the fact that it involved a Will dated December 12, 1999 and that, in an earlier action, a jury was asked to consider a will dated December 28, 1999. The jury determined and the court held that the decedent had capacity on December 28th but that will was void because it was the result of undue influence. The question before the court in the case at bar was whether the determination of capacity as of December 28th was res judicata as to the question of capacity on December 12th of the same year. The trial court held that it was, but the Court of Appeals reversed and held that the only issue at hand was capacity as of December 12. The Court of Appeals indicated that “[on remand, the appellant will have an onerous burden.” The Court did not indicate whether the will’s proponent would be able to inform the about the testator’s capacity on December 28th.

Digested by Jim Worthington

Punitive damage issue found in professional negligence claim; breach of fiduciary duty and professional negligence claim by accounting firm: PEOPLES BANK OF NORTHERN KENTUCKY V. CROWE CHIZEK AND CO. LLC (COA 6/6/2008)

PEOPLES BANK OF NORTHERN KENTUCKY V. CROWE CHIZEK AND CO. LLC
TORTS: PROFESSIONAL NEGLIGENCE: BREACH OF FIDUCIARY DUTY IN ACCOUNTING AND AUDITING SERVICES
2007-CA-001174
PUBLISHED: AFFIRMING PART, REVERSING IN PART, AND REMANDING
PANEL:  WINE PRESIDING; COMBS, ACREE CONCUR
BOONE COUNTY
DATE RENDERED: 6/6/2008

Peoples Bank (PBNK) appeals entry of summary judgment in favor of Crowe Chizek and its employee on PBNK's professional negligence and breach of fiduciary duty claims, which were dismissed by the TC as barred by the statute of limitations and the release clause in the party's contracts. The relevant facts to this action are as follows: PBNK's largest loan customer was real estate developer Erpenbeck whose accounts were supervised by two of the bank's internal officers (Finnan and Menne). The officers and Erpenbeck develop a close relationship and begin vacationing together. The officers then form a business (JAMS) to purchase properties from Erpenbeck at cost only to create fictitous purchase contracts to reflect a much higher price in order to obtain loans (not from PBNK) for the false amount. The excess loan proceeds were then divided between Erpebeck and JAMS, and Erpenbeck would rent the properties from JAMS while the rental payments were then used to pay the mortgages. Three years later, JAMS has received over half a million in excess loan proceeds on almost $4 million in total loans and was financially dependent on Erpenbeck.

This entire time the two JAMS owners remained officers at PBNK, and during this time they hired Crowe to perform tax services for JAMS (all of its accounts being held at PBNK) although the same Crowe partner was also still overseeing the independent auditing and accounting services for PBNK. Some two years later in 2002, one of the JAMS owner and still officer with PBNK informed the Crowe partner overseeing of Erpenbeck's check diversion and check kiting schemes for which the officers had authorized additional loans through PBNK to cover the the overdraft fees. The Crowe partner advised the officer to inform the bank's board of the officers' and JAMS' relationship with Erpenbeck and potential conflict of interest, which was done. PBNK then notified authorities and hired an independent law firm to conduct an investigation of the matter, which led to both officers' resignation. The adverse publicity essentially forced the bank to close and sell its assets at a substantial loss. Both Erpenbeck and the officers were found guilty of numerous bank fraud charges. PBNK then filed suit against Crowe and the partner asserting a number of causes of action for which it sought compensatory and punitive damages. Four years later, Crowe files a number of motions most notably relying on the release in the contracts and the statute of limitations. The TC agreed and granted each of the motions effectively dismissing all claims.

On appeal, the COA began by affirming the TC's dismissal of PBNK's claim for aiding and abetting the two officers in breaching their fiduciary duty, noting that Kentucky law as never recognized a civil cause of action for this type of claim. The court also found no proof that the Crowe or its partner were active, knowing participants in the officers' misconduct. Next, the COA turned to PBNK's argument that the release clauses in Crowe's engagement letters did not bar its claims since they only released Crowe for any opinion it offered attributable to misrepresentations made by PBNK during the audit. Instead, PBNK argued that its claims were based on Crowe having actual knowledge of the officers' misconduct through its work for JAMS, and thus its losses were due to Crowe's independent negligence. The COA agreed, and held that at a minimum PBNK had offered sufficient proof to create a genuine issue of fact on the matter since any evidence of the bank's misrepresentations would be relevant as comparative fault rather than barring the claims altogether.

The COA then addresses PBNK's argument that the one-year statute of limitations applicable to professional negligence and breach of fiduciary duty claims (KRS 413.245) had not expired by the time suit was filed. The court goes through a fairly detailed analysis of the two different limitations periods contained in this statute, the date of occurrence (accrual rule) and date of discovery (common law discovery rule). Crowe argued that the discovery rule applied to bar the claims since PBNK knew or should have known of the misconduct long before one year prior to suit being filed while PBNK argues that the limitations was tolled during the period of Crowe's continuous representation of the bank. The COA, in reliance on the Supreme Court's recent decision in Queensway v. Cotton & Allen, 237 S.W.3d 141 (Ky. 2007), noted that the discovery limitations period cannot begin to run until the accrual period begins (when negligence and resulting damages have both occurred). The court held that while the alleged negligence in this case occurred with the completion and delivery if each annual audit report, the damage from the officers' breach of fiduciary duty did not become fixed and non-speculative until April 2002 when the Crowe partner compelled the officers to disclose the relationship with Erpenbeck to the bank board. The complaint filed in late March 2003 was therefore timely.

Turning to PBNK's punitive damages claim, the COA ultimately determines that the bank had offered enough evidence to create a jury issue. The court acknowledged PBNK's argument that Crowe should have discovered the conflict of interest during its auditing work for JAMS, and that Crowe's failure to discover and disclose the wrongdoing amounted to concealment causing damage to the bank independent of those due to the wrongful acts themselves. While the COA held that Crowe did not intend to give assistance in the officers' misconduct, the court found that PBNK had met its burden of offering sufficient proof of gross negligence to withstand a motion for summary judgment.

In conclusion, the COA ruled in favor of PBNK as follows: summary judgment was not appropriate on its professional negligence and breach of fiduciary duty claims as neither barred by the statute of limitations or the releases in the contracts between the parties; and these contracts did not bar PBNK's damage claims arising from Crowe's negligence prior to the auditing period covered by the contracts. But, the COA found summary judgment was appropriate on PBNK's aiding and abetting claim, and the bank's alleged damages arising from Erpenbeck's conversion of checks not payable to him (since the check diversion scheme was not a foreseeable consequence of Crowe's alleged negligence and Erpenbeck's criminal conduct as well as bank's own negligence in cashing the checks were superseding causes of the injury).


Digested By Chad Kessinger
Schiller Osbourn Barnes & Maloney

Dismissal remanded on school personnel's duty to report due to failure to include lower court's reasoning in summary judgment: NELSON V. TURNER (COA 6/6/2008)

NELSON V. TURNER
TORTS:  Dismissal remanded on school personnel's duty to report due to failure to include lower court's reasoning in summary judgment
2007-CA-000489
PUBLISHED: VACATING AND REMANDING
PANEL: CLAYTON PRESIDING; MOORE CONCURS; COMBS CONCURS IN PART, DISSENTS IN PART
FAYETTE COUNTY
DATE RENDERED: 6/6/2008

CA affirms in part and vacates and remands in part entry of SJ against parent regarding claims of negligent supervision and failure to report sexual assault.

Nelson's 5-year-old daughter was in kindergarten at a public elementary school in Fayette County; her teacher was Turner. The child reported to her mother a sexual assault against her by another female kindergarten student during regular school hours. Nelson reported the incident to Turner, who took steps to advise the teaching assistant to keep the children separated; to admonish the other child; to assign the children seats; and to prevent them from attending the restroom at the same time. Turner made no report to local law enforcement officials. That same day, the child reported another assault; the teacher questioned the other child, who admitted the contact. Turner unsuccessfully sought out a school administrator for advice as to how to handle the situation. No report was made to local law enforcement. Nelson spoke to the principal the following day. The principal immediately investigated and believed the contact had occurred "by accident" and did not report the incident to authorities. At the end of that same school day, the child reported another, more extensive, sexual assault against her by the same student, which allegedly occurred in the classroom. Nelson to the child to a hospital for an exam where some small irritation of the vagina was noted. Medical personnel reported the incident to police. The child did not return to school and an internal investigation followed.

Nelson filed suit against KSBIT alleging unfair claims settlement practices; failure to timely respond and complete an investigation; unfair or deceptive acts; and several other claims, including intention infliction of emotional distress. This action was dismissed, but Nelson immediately filed an amended complaint renewing these claims and also alleging failure to supervise and report the abuse against Turner and the Board. Nelson also alleged outrageous conduct. Defendants alleged governmental and qualified official immunity. Turner contended her supervision was a discretionary act and she was not required to report under KRS 620.030.

As to Turner's duty to report, CA remands to the TC because, though the court found the duty to report to be discretionary, the opinion did not include the court's reasoning for the CA to review. CA affirms as to the dismissal of the outrage claim. CA cannot affirm the dismissal of bad faith against KSBIT until Turner's liability is established.

Digested by John Hamlet


Digested by John Hamlet

Notice of appeal SHALL be filed within 30 days. DIAZ V. BARKER AND ALLSTATE INS. CO. (COA 5/9/2008)

DIAZ V. BARKER AND ALLSTATE INS. CO.
APPEALS:  Notice SHALL be filed within 30 days
2006-CA-001198
PUBLISHED: AFFIRMING
PANEL: VANMETER PRESIDING; TAYLOR, KELLER CONCUR
JEFFERSON COUNTY
DATE RENDERED: 5/9/2008

Basic civil procedure here: CR 73.02(1)(a) mandates that a notice of appeal SHALL be filed within 30 days after the date of notation of service of the judgment. COA disagreed with Plaintiff's argument that she had the option to wait to appeal until the resolution of claims against all parties, citing CR 54.02, which states that in actions involving more than one claim or multiple parties, a court may grant a final judgment upon one or more but less than all of the claims or parties only upon a determination that there is no just reason for delay. The CAs held that the trial court's orders of summary judgment conclusively determined the rights of the parties as to each other, making the orders appealable at their time of entry.

The Plaintiff had moved to recuse the trial court and argued he lacked jurisdiction over the case once she made these motions pursuant to KRS 26A.015(2). The CAs noted that there are two alternative remedies to seek removal of a judge: a motion can be filed with the judge under KRS 26A.015(2), or an affidavit can be filed via KRS 26A.020(1) seeking relief from the Chief Justice. Here, the Plaintiff sought relief under .015(2) and is limited to the procedure set out therein. CAs held that on the face of the record the trial court was under no obligation to step aside, and as for any allegations that trial court made improper comments, the record was silent. And a silent record, friends, is presumed to support the decision of the trial court.

Cherry Henault Guarnieri

Exceptions to administrative ruling must be timely filed and substantial compliance offers no relief in licensing of child placement facility: COM. V.COPPER CARE, INC.

COM. V. COPPER CARE, INC.
ADMINISTRATIVE APPEAL:  Sustantial compliance not apply and exceptions not timely
2007-CA-000676 521
PUBLISHED: REVERSING
PANEL: THOMPSON PRESIDING; CAPTERTON, LAMBERT CONCUR
MADISON COUNTY
DATE RENDERED: 5/25/2008

The Cabinet for Health and Family Services (the Cabinet) appeals circuit court order denying its motion for summary judgment against Copper Care, Inc. (Copper Care). The issue raised is whether the circuit court properly held that the Stapletons’ exceptions to the hearing officer’s findings of fact, conclusions of law, and recommended order were timely filed.  COA reversed.

The Cabinet issued a “Notice of Revocation and Preliminary Order to Close” seeking to revoke Copper Care’s license based on its alleged failure to meet the standards in the administrative regulations promulgated pursuant to KRS 199.640 for a child-placement agency. Following an administrative hearing Copper Care filed exceptions 18 days later, and not 15 days.  The Cabinet accepted the hearing officer’s recommended order, and Copper Care filed a complaint in the Madison Circuit Court seeking review of the Cabinet’s order. In addition to its answer, the Cabinet filed a motion for summary judgment arguing that, as a matter of law, the exceptions were untimely filed

To reconcile judicial decisions with the recently amended CR 73.02(2), the Court held that dismissal of an appeal is not an appropriate remedy “so long as the judgment appealed from can be ascertained within reasonable certainty from a complete review of the record on appeal and no substantial harm or prejudice has resulted to the opponent.”

The issue in this case does not concern CR 73.02. The time for filing exceptions in an administrative proceeding is governed by statute and is a step in the administrative review process.  The language contained in KRS 13B.110(4) is unequivocal and requires that exceptions be filed within fifteen days from the date the recommended order is mailed. Absent legislative authority to the contrary, the substantial compliance doctrine is not applicable.

The trial court erroneously concluded that the substantial compliance doctrine saved Copper Care from the consequences of the untimely filing of its exceptions. Although not a jurisdictional defect, the filing of exceptions is, in this case, fatal.

Since Copper Care’s exceptions were untimely filed, there was no issue properly preserved for review. As a consequence, the circuit court erred when it denied
the Cabinet’s motion for summary judgment. The summary judgment entered in favor of Copper Care is reversed and the case remanded for the entry of an order granting the Cabinet summary judgment.

By Michael Stevens

In issue of first impression COA holds Notice of voluntary dismissal without prejudice denies court of further jurisdiction unless answer or motion for summary judgment filed: WHALEY v. WHITAKER BANK, INC. (COA 5/2/2008)

WHALEY V. WHITAKER BANK, INC.
CIVIL PROCEDURE:  Notice of voluntary dismissal without prejudice denies court of further jurisdiction unless answer or motion for summary judgment filed
2007-CA-001451 534
PUBLISHED: VACATING AND REMANDING
PANEL: WINE PRESIDING; ACREE, KNOPF CONCUR
SCOTT COUNTY
DATE RENDERED: 5/2/2008

CA vacates and remands order granting motion to dismiss under CR 12.02.

Appellants filed a notice of voluntary dismissal without prejudice under CR 41.01(1) while appellee's CR 12.02 motion to dismiss (with prejudice) was pending. CR 41.01 allows a plaintiff to voluntarily dismiss "before service by the adverse party of an answer or of a motion for summary judgment...." Appellee's CR 12.02 motion presented matters outside the pleadings to be considered, so the TC considered this motion as a motion for SJ (at a hearing conducted after appellants' CR 41.01 notice was filed) and granted dismissal with prejudice.

In an issue of first impression, COA holds that the TC erred by granting the CR 12.02 motion because the TC lost jurisdiction immediately upon filing of the CR 41.01 notice. "Once the plaintiff gives his notice, the lawsuit is no more."

Digested by John E. Hamlet

Multiple issues addressed in medical negligence case dealing with evidentiary challenges and denial of mistrial; evidence of decedent child's genetic defect admissible on earning capacity: WOOLUM, M.D. v. HILLMAN (COA 5/2/2008)

WOOLUM, M.D. V. HILLMAN
MEDICAL NEGLIGENCE: EVIDENTIARY CHALLENGES, DENIAL OF MISTRIAL
2007-CA-000376 - 516
PUBLISHED: AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
PANEL: STUMBO PRESIDING; ACREE CONCURS, GRAVES DISSENTS FILING SEP. OP.
BELL COUNTY
DATE RENDERED: 5/2/2008

This appeal and cross-appeal stem from a medical negligence wrongful death action. Lisa Ann Hillman was the patient of Dr. Jerry Woolum during her pregnancy with Caitlynn Hillman. Complications occurred during her pregnancy and Caitlynn was stillborn. A jury found medical negligence on the part of Dr. Woolum and awarded Mr. and Mrs. Hillman a total of $500,000 for their loss of companionship claims ($250,000 each) and $600 for funeral expenses, but chose to award $0 for the child's permanent earnings impairment. The TC later ordered a new trial on the issue of the $0 verdict for permanent impairment. Following the court's ruling on motions in limine in regard to certain evidentiary issues concerning the second trial, the parties entered into an agreement stipulating that the loss to Caitlynn's estate was $475,000 and this appeal followed.

On appeal, Dr. Woolum argued that the TC made several evidentiary mistakes and errors in certain rulings, most notably as follows: 1) it erred in denying his motion for directed verdict; 2) it erred in not declaring a mistrial during the first trial, and 3) it erred by granting the Hillmans a new trial on the issue of damages. The Hillmans cross-appeal and raise two additional issues to be considered by the COA: 1) TC erred by not excluding the testimony of two of Dr. Woolum's experts during the first trial, and 2) it erred by not preventing the jury of the proposed second trial from being informed about the damages awarded to them at the first trial.

TC's Failure to Exclude Evidence of Liability Insurance

Woolum first argued to the COA that the TC erred by admitting evidence of a common med mal insurer between himself and one of his experts, Dr. Butcher. The COA felt that the TC did not abuse his discretion in this admission, noting that Dr. Butcher had shown "extreme bias" toward med mal cases that the jury should be allowed to consider. The COA described Dr. Butcher's "hostility" to med mal cases as extreme (Butcher testified during his depo that be believed there was a direct link between med mal cases and insurance rates and that he had left one state because of alleged collusion between judges and lawyers in med mal cases) and when considering his personal relationship with Woolum (they had practiced together at the same hospital for over 20 years) the TC had sufficient basis to admit the testimony concerning the common malpractice insurer.

TC's Failure to Exclude Introduction of Ultrasound Video

Woolum next argued error in the TC permitting the video of Hillman's ultrasound to be shown to the jury during Hillman's testimony on the basis that it was not properly authenticated by a medical professional. Woolum also alleged that permitting the video to play while Hillman cried on the stand during her testimony was extremely prejudicial, and finally that the video was unnecessary and cumulative since the ultrasound report had already been introduced as evidence. The Hillman's countered that the video was necessary to show that at 7 months the child was healthy and moving around, and to demonstrate the love and affection the Hillman's had for their deceased child.

The COA begins notes that a video is considered a photograph per KRS 1001(2), and that for such evidence to be introduced it must satisfy 3 factors on admissibility per Gordon v. Hunt (2000): it shall be properly authenticated, it must be relevant by tending the make the existence of any fact in question more or less probable, and it's probative value must not be substantially outweighed by the danger of undue prejudice or be considered needless presentation of cumulative evidence. The COA held that the ultrasound video satisfied all 3 factors and therefore was not an abuse of discretion for the TC to permit its introduction even if it could be considered cumulative.

TC's Failure to Grant Motion for Directed Verdict

Dr. Woolum next argued the TC erred by denying his motion for a directed verdict since the Hillman's failed to present proof of the viability of the deceased child (Woolum's defense was that the death was due to an unknown genetic defect). After briefly setting out relevant testimony from one of Hillman's experts that the child was viable had she been born during the month time period preceding the stillborn birth, the COA held that there was sufficient evidence of viability to submit to the jury.

TC's Failure to Grant Mistrial

Woolum contended on appeal that the TC erred by not declaring a mistrial due to inadvertant jury misconduct stemming from two of the jurors becoming ill from high blood pressure and heart problems and having to be transported to the hospital during the deliberations. Woolum felt that since the nature of the juror's problems were due to the very same issue in the case (high blood pressure), these two jurors could have become biased against him as well as the other jurors who witnessed the two jurors' illnesses. The COA noted that the judge gave admonitions to the jury on a daily basis throughout the trial as well as immediately after the jurors fell ill and again before deliberations resumed several days later, and that juries are presumed to follow a court's admonitions. Without some specific evidence to the contrary, the COA ruled that a mistrial was not warranted.

TC's Grant of New Trial

Woolum argued that the TC erred by overruling the jury's verdict and granting the Hillman's a new trial on damages (concerning the wrongful death claim) since evidence presented in regard to the child's genetic defect could have permitted the jury to find that the child had no ability to earn money. In response, the COA reiterated the Supreme Court's decision in Turfway Park Racing Ass'n v. Griffin (1992) that only evidence of a disability so profound as to render the child incapable of earning money can defeat a permanent impairment claim. While Woolum contended that the unknown genetic abnormality prevented the placenta from developing properly thereby resulting in stillbirth, the COA noted that none of its experts had any evidence to indicate that the child would grow up to be anything but normal. The COA thus concluded that the TC's grant of a new trial on impairment damages was not clearly erroneous.

TC's Refusal to Permit Evidence of Lack of Earning Capacity

Woolum finally argued that the TC erred in ruling in limine that Woolum could not present evidence that the child had no earning capacity on the basis that the "law of the case doctrine" precluded such evidence since none was presented at the first trial. The COA agreed with Woolum and determined that the doctrine was inapplicable since the jury in the first trial was not asked to determine whether a genetic defect existed or whether it caused the child's death, only whether Woolum was negligence in his care of Hillman and the child. Further, this doctrine applies to rulings of law, not issues of evidentiary admission, and the TC never made a ruling that could be construed as determinative on the issue of the child's earning capacity. Thus, the COA concluded Woolum could present evidence of genetic defect and the child's lack of earning capacity at the new trial on damages.

CROSS-APPEAL

TC's Failure to Exclude Proffered Testimony of Genetic Defect

On cross-appeal, the Hillman's argued that the TC erred by permitting Woolum's two experts to offer their theory that the child's death was proximately due to an unknown genetic abnormality in violation of Daubert. The COA discusses the factors a trial court must consider in weighing the reliability and relevancy of proffered testimony, and its ruling is not clearly erroneous so long as the decision is supported by substantial evidence. The COA stated that just because the genetic defect in this case fell in the "unknown" category did not mean it should be automatically excluded, and determined that the qualifications of Woolum's two experts along with the medical evidence presented by Woolum was sufficiently reliable to be heard by the jury. Without question, the proffered expert testimony was relevant since it was the heart of Woolum's defense. Thus, the testimony was properly allowed by the TC.

TC's Refusal to Preclude Evidence of Awarded Damages at Second Trial

The Hillman's last argued that it was error for the TC to deny their motion to limine to exclude the introduction of damages awarded in the first trial at the second damages trial. The COA ruled that the Supreme Court in Turfway Park has recognized that the jury at a second retrial should be informed of damages for loss of companionship awarded at an earlier trial involving the same event and allegations, and thus the TC's ruling on this issue was proper.

Conclusion

The COA affirmed the TC in all respects except that it held that Woolum should be permitted to present evidence of the child's lack of earning capacity at the new trial on damages concerning the wrongful death claim.

Digested By Chad Kessinger
Schiller Osbourn Barnes & Maloney 

Judge's indeterminate stay of a cause of action not allowed without reasons on record: EST. OF LAKEESHA CLINE V. HON. JAMES G. WEDDLE (SC 4/24/2008)

EST. OF LAKEESHA CLINE V. HON. JAMES G. WEDDLE
CIVIL PROCEDURE:  Sua sponte order to stay an action
2007-SC-000742-MR.pdf
PUBLISHED: AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
OPINION BY MINTON; ABRAMSON NOT SITTING
ADAIR COUNTY
DATE RENDERED: 4/24/2008 -80

The Supreme Court affirms in part and reverses and remands in part this wrongful death case involving a sua sponte order to stay an action.

Cline was a teenaged patient who fled a residential psychiatric treatment facility and was struck and killed in traffic. Her estate sued the facility and, after some discovery, filed a second wrongful death action with additional claims against the facility and other defendants. The estate then sought to consolidate the two actions, which motion was denied. The estate then filed a motion for leave to file an amended complaint to add additional parties to the second complaint; the trial court, sua sponte, order discovery halted in the second action "until completion" of the first action. Four months later the estate filed an action in the CA seeking a writ of mandamus to compel the consolidation and amendment and lift the stay order.

CA held that the estate was not entitled to the writ, stating that the stay was of limited duration. CA also noted that the estate's procedural entanglements were self-inflicted by filing two separate actions and waiting 4 months to petition for a writ.

S. Ct. holds that CA erred in not issuing the writ to compel the stay order to be vacated b/c it was of indeterminate duration with no articulated pressing need. S.Ct. upheld the CA, however, in declining the writ on consolidation and amendment.

Digested by John E. Hamlet

COA vacates dismissal for faiure to answer discovery for trial judge's failure to make findings of fact: STAPLETON V. SHOWER, M.D. (COA 4/11/2008)

STAPLETON V. SHOWER, M.D.
CIVIL PROCEDURE:  Trial judge's dismissal of pro se medical negligence claim for failure to answer discovery reversed and remanded by COA for failure to make findings of fact
2007-CA-000213
PUBLISHED: VACATING AND REMANDING
PANEL: THOMPSON PRESIDING; CAPTERTON, LAMBERT CONCUR
MASON COUNTY
DATE RENDERED: 04/11/2008

Patient and her husband filed a pro se medical malpractice action against doctor and clinic who moved at trial to dismiss due to patient's failure to respond to discovery requests. Trial court dismissed. COA vacated and remanded.

Although the circuit court has broad discretion when applying the “civil death penalty,” that is, dismissal with prejudice, it should be resorted to only in the most extreme cases and, when resorted to should be carefully scrutinized by an appellate court.

In Toler, the Court further emphasized that the trial court is to consider the factors set forth in Ward, 809 S.W.2d 717, when making a determination as to whether to order dismissal pursuant to CR 41.02. Those factors include: “(1) the extent of the party's personal responsibility; (2) the history of dilatoriness; (3) whether the attorney's conduct was willful and in bad faith; (4) the meritoriousness of the claim; (5) prejudice to the other party; and (6) the availability of alternative sanctions.” Id. at 351 (citing Ward, 809 S.W.2d at 719).

These same factors are equally relevant when dismissal is imposed as a sanction for failure to comply with discovery requests. In Ward, the fact underlying the basis for the dismissal was the plaintiff's failure to timely respond to a discovery request and, consequently, the identification of an expert witness. Thus, the law set forth in Ward and, as clarified in Toler, is controlling when the court considers the issue of involuntary dismissal with prejudice.

In this appeal, the COA noted there was absolutely no reference to any of the Ward factors. As such, it is virtually impossible for this court to determine whether the dismissal was based solely on a single dilatory act or whether the trial court made its determination after considering the relevant factors set forth in Ward.

The COA held that the Circuit Court's failure to make findings of fact required vacatur.

By Michael Stevens

Multiple issues in medical negligence case re: specialists standard of care, mention of health insurance not violate KRE 411, and production of documents prepared by doc to testify: BARKMAN V. OVERSTREET, M.D. (COA 4/11/2008)

BARKMAN V. OVERSTREET, M.D.
MEDICAL NEGLIGENCE: Standard of care is based upon the physician's specialty of practice.
MISTRIAL MOTION:  Mention of health insurance as opposed to liability insurance as prohibited by KRE 411 is not grounds for mistrial
EVIDENCE:  Document prepared by expert witness but not read or relied upon by him to testify is not to be produced to counsel on grounds of past recollection recorded or present memory refreshed
2006-CA-001279
PUBLISHED:  AFFIRMING
PANEL: MOORE PRESIDING; ACREE, KELLER CONCUR
BOYLE COUNTY
DATE RENDERED: 04/11/2008

The patient suffered permanent paralysis of all four limbs after an automobile crash and brought a claim for medical malpractice against her treating internal medicine doctor who treated her at the hospital. The jury returned a verdict in favor of the physician, and the patient/Barkman argued on appeal that the trial court used the wrong standard of care in the jury instructions, erred in not granting a mistrial when Overstreet (the doctor) mentioned insurance during his testimony and erred when it denied Barkman's request to produce a document prepared by Overstreet in anticipation of litigation. Finding no error, the COA affirmed.

With regard to the standard of care, the COA stated physician had a duty, in care and treatment of patient, to exercise that degree of care and skill expected of a reasonable and prudent internal-medicine physician acting under the same or similar circumstances rejecting the proposed instruction which would have used language regarding emergency care (eg., "exercise that degree of care and skill expected of a reasonably competent physician specializing in the care and treatment of emergency patients acting under similar circumstances"). Relying upon SCOKY precedent, the COA stated “[i]t is our conclusion that the jury should be instructed that the defendant was under a duty to use that degree of care and skill which is expected of a reasonably competent practioner [sic] in the same class to which he belongs, acting in the same or similar circumstances.”

"Insurance" was mentioned at trial by the defendant doctor and the trial court overruled the motion for mistrial and refused to give an admonitory instruction. The exchange was:

Barkman's attorney: OK, so you are saying that you just made up this loss of consciousness?

Dr. Overstreet: I didn't make it up. I didn't make it up. But, uh, you know, the insurance companies and you guys are the ones that force us into these pigeon holes.

Under KRE 411 "Evidence that a person was or was not insured against liability is not admissible upon the issue whether the person acted negligently or otherwise wrongfully. This rule does not require the exclusion of evidence of insurance against liability when offered for another purpose, such as proof of agency, ownership, or control, or bias or prejudice of a witness."

The COA then parsed the words used by Dr. Overstreet and noted the precepts behind KRE 411 - "First, the rule, obviously, applies only to liability insurance. Second, the rule only prohibits liability insurance evidence when it is offered regarding the issue of whether or not a party acted negligently or wrongly. Third, the rule does not prohibit evidence about liability insurance if it is offered for other purposes. Consequently, KRE 411 only applies to Overstreet's testimony if he was referring to liability insurance and if he was referring to such insurance to comment upon whether a party to the litigation had somehow acted negligently." "Placing Overstreet's remark into its proper context, it becomes apparent that Overstreet was referring to health insurance not liability insurance. Because KRE 411 applies only to liability insurance, we conclude the trial court did not abuse its discretion when it denied Barkman's motion for a mistrial and her request for an admonition."

At trial, the plaintiff called the treating Dr. Overstreet to testify. Overstreet had several documents with him to refresh his memory, to include a timeline prepared by him. Plaintiff's counsel examined this timeline and a copy was attached to the record to be reviewed in camera by the court. No objection was made until 8 days later, when plaintiff's counsel wished to examine the timeline document. The COA then brushed aside the different positions of counsel regarding the document as past recollection recorded versus present memory refreshed by stating "neither concept applies to this present case. After reviewing the record of Overstreet's testimony, we find that when Overstreet initially took the stand, he had the document in question with him. However, he did not review it while on the stand nor did he refer to it during his testimony. In short, Overstreet did not use the document at trial. Accordingly, Barkman was not entitled to review the document under the concept of present memory refreshed or past recollection recorded."

Digested by Michael Stevens