Chambers of Kentucky Supreme Court in Frankfort, Kentucky
Although cases are tried with one eye looking at the verdict and the other eye looking ahead past the verdict by preserving the record for a possible appeal, the order or judgment being appealed must contain the “magic language” of finality, appealability, AND “no just cause for delay” language.
With these magic words, the time to appeal begins to run.
The reason I mention this is that in the following nonpublished decision by the Court of Appeals, written by Judge Joy Moore, she refers to my first appellate case that went all the way up to the Supreme Court of Kentucky (Preferred Risk Mut. Ins. Co. v. Kentucky Farm Bureau Mut. Ins. Co., 872 S.W.2d 469, 470 (Ky. 1994). For more recent decisions by the Supreme Court of Kentucky and the Court of Appeals of Kentucky, click here for cases I have posted at the Kentucky Court Report.
I remember the day of oral arguments vividly. The preparation, leaving early to make sure I was absolutely on time to avoid any travel problems, etc., nervously waiting in the court room in Frankfort in State Capitol, and the peppering of questions by Justice (now retired Chief Justice Lambert) and Justice Joseph Liebson and others.
However, I most remember while waiting and reviewing my notes, I reached into my shirt pocket for my “Flair” felt tip pen to make a note on the margins. And the pen had leaked! I had a large green stain on my white shirt! Fortunately, buttoning the jacket concealed the stain. Moral of the story is that preparation is important, practice is key, and presentation paramount, but a little luck can go a long way. The shirt was ruined, but the large green stain was hidden by the jacket and the red face of my embarassment went unnoticed. I probably looked a little like Napoleon with my left arm a little crossed over in front to make sure the suit coat did not reveal the green stain. I sometimes refer to that case as a miracle, not because I prevailed on the legal issues at trial, won the appeal, or even that I survived oral argument with my shirt intact. No, the case was a miracle because one of the litigants in the case was named Miracle!
Ohio Cas. Ins. Co. v. City of Providence, COA, NPO 11/16/2012
As a general matter, “this court is required to raise a jurisdictional issue on its own motion if the underlying order lacks finality.” Tax Ease Lien Investments 1, LLC v. Brown, 340 S.W.3d 99, 101 (Ky. App. 2011) (citing Huff v. Wood–Mosaic Corp., 454 S.W.2d 705, 706 (Ky.1970)). With that said, the circuit court had the authority to bifurcate Providence’s action against OCC into two separate claims (i.e., one claim for the interpretation of the contract and its coverage provisions, another for an assessment of damages pursuant to the contract). The circuit court also had the authority to render its decision regarding coverage immediately appealable while reserving the separate issue of damages for a later date — provided that it did so by following the requirements of Kentucky Civil Rule (CR) 54.02. See Preferred Risk Mut. Ins. Co. v. Kentucky Farm Bureau Mut. Ins. Co., 872 S.W.2d 469, 470 (Ky. 1994).
However, CR 54.02 required the circuit court’s order to recite not only that it was final, but that there was “no just reason for delay.” Watson v. Best Financial Services, Inc., 245 S.W.3d 722 (Ky. 2008). “Absent those certifications, the rule is not invoked.” Spencer v. Estate of Spencer, 313 S.W.3d 534, 540 (Ky. 2010). Here, the circuit court’s order simply recites that it is “a final and appealable order,” but omits that there was “no just reason for delay”; its subsequent order overruling OCC’s CR 52.02 motion for additional findings did not cure this omission; and, as a consequence, the circuit court’s order, which is the subject of this appeal, is merely interlocutory and unripe for review. Watson, 245 S.W.3d 722.
The hard fact is that it was appellant Ohio Casualty’s responsibility to ensure that the circuit court’s judgment was in the proper form to invoke CR 54.02. Spencer, 313 S.W.3d at 540. Having failed to do so, Ohio Casualty has left this Court with no option other than to DISMISS its appeal.
Here is that decision written Justice Spain in Preferred Risk Mutual Insurance Company vs. Kentucky Farm Bureau Mutual Insurance Company. Although the parties “named” in this appeal in the style of the case, the heart of the case was a question of the availability of liability insurance coverage when someone stole your car.
Preferred Risk Mut. Ins. Co. v. Kentucky Farm Bureau Mut. Ins. Co., 872 S.W.2d 469, 470 (Ky. 1994)
[*469] OPINION OF THE COURT BY JUSTICE SPAIN
The Hardin Circuit Court, in a Summary Declaratory Judgment entered on July 18, 1991, held that an automobile liability insurance policy issued by appellee, Kentucky Farm Bureau Mutual Insurance Company
(Farm Bureau), to its insured, Linda Sharon, did afford minimum limits liability coverage notwithstanding the fact that the collision in question was intentionally caused by one operating the insured vehicle without permission. The Court of Appeals reversed, holding that there was no mandatory coverage under the circumstances. We granted discretionary review and affirm the Court of Appeals.
[**2] Farm Bureau’s insured, Linda Sharon, was the registered owner of a pickup truck which she bought as a graduation gift for her daughter, Lindsey Sharon. On March 6, 1990, while Lindsey had the use of the vehicle, she and her boyfriend, John Spegal, with whom she was breaking up, had a quarrel. Bruce Miracle, another friend of Lindsey, also was driving his car on this occasion, with Michael Decker and Pat Decker as guest passengers. At one point, Spegal, in a fit of anger, grabbed the keys to the pickup from Lindsey and refused to give them back. She then got into Miracle’s car, so she could be driven to her house. Spegal proceeded to back the Sharon pickup truck into the front [*470] end of the Miracle vehicle, in what was described as “a vindictive outburst.”
Both Miracle and Michael Decker claimed to have been injured in the collision, and were paid basic reparation benefits (BRB) by Miracle’s insurer, Preferred Risk Mutual Insurance Company (Preferred Risk). In addition, Miracle’s mother brought a tort action as his next friend against Spegal and Linda Sharon. Preferred Risk intervened in the suit as a plaintiff and joined Farm Bureau as intervening defendant, claiming subrogation of the [**3] BRB benefits paid and payable to Miracle and Michael Decker. Furthermore, Preferred Risk included a claim for declaratory relief, requesting the Court to declare whether Farm Bureau’s policy with Linda Sharon afforded liability coverage for the collision resulting from Spegal’s operation of the Sharon vehicle.
Following the taking of depositions, Preferred Risk moved for summary judgment as to the claim for declaratory relief. After briefing by Preferred Risk and Farm Bureau, the trial court took the matter under submission and later rendered the Summary Declaratory Judgment mentioned above, declaring Farm Bureau’s minimum liability coverage to have been in force. Farm Bureau appealed to the Court of Appeals, which reversed the trial court.
The first argument raised by Preferred Risk before the Court of Appeals, and again in this Court, is that the Summary Declaratory Judgment was merely interlocutory, rather than being final and appealable as recited by the trial court. It is contended that the judgment wasn’t final since Preferred Risk sought not only declaratory relief, but also specific monetary damages from Farm Bureau by way of reimbursement for BRB amounts paid by it to Miracle [**4] and Michael Decker. It is true that the mere recitation of the “final and appealable” provision of CR 54.02 is not determinative of the matter. Nevertheless, HN1
under KRS 418.040, if an actual controversy exists,
. . . the plaintiff may ask for a declaration of rights, either alone or with other relief; and the court may make a binding declaration of rights, whether or not consequential relief is or could be asked. (Emphasis added.)
Here, it was preferred Risk who asked for an adjudication of its rights as against Farm Bureau, in addition to a further request, should coverage exist, for specific monetary damages by way of reimbursement for BRB amounts paid. The trial court, having made the requested declaration of rights, was certainly empowered to denominate this portion of its adjudication as final and appealable, notwithstanding the possible necessity of further proceedings between these parties to assess damages, or of further proceedings between the remaining parties to the litigation. The wisdom of such action by the trial court is further vindicated by our decision on the merits. Since we have finally determined that there is no liability by Farm Bureau to preferred [**5] Risk on the intervening complaint, there is no need for any further time-consuming proceedings between these parties for proof of damages.
The remaining contention by Preferred Risk is that the Court of Appeals erred in reversing the trial court’s holding that Farm Bureau’s liability policy was mandated by the Motor Vehicle Reparations Act (MVRA) to provide minimum limits liability coverage, notwithstanding any exclusions for intentional wrongs or nonpermissive use. We agree with the Court of Appeals that the MVRA does not so mandate. KRS 304.39-080(5) provides:
HN2
It appears clear from this language that [**6] HN3
Here, Spegal was certainly not a named insured under Farm Bureau’s policy with Linda Sharon, and the trial court found from the evidence before it that his use of the Sharon vehicle was nonpermissive. Our decision and that of the Court of Appeals declaring the rights of the insurers as to whether Farm Bureau’s policy afforded coverage for this collision, necessarily depend upon this finding of fact by the trial court. Consequently, should it appear otherwise to the trial court upon any full trial of this action between the original parties on the merits, then it should certainly reconsider the matter of liability coverage.
The decision of the Court of Appeals [**7] is affirmed and this cause is remanded to the Hardin Circuit Court with directions to enter a judgment for Farm Bureau on the issue of coverage.
Stephens, C.J., Reynolds and Wintersheimer, JJ., concur. Lambert, J., dissents by separate opinion in which Leibson and Stumbo, JJ., join.
Post written Michael Stevens
