BERLING CONSTRUCTION COMPANY v. RAYMOND L. SCHLAGEL AND KORLISS M. SCHLAGEL
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December 30, 1998; 10:00 a.m.
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C omonwealth O f K entucky
C ourt O f A peals
NO.
1996-CA-003222-MR
BERLING CONSTRUCTION COMPANY
APPELLANT
APPEAL FROM BOONE CIRCUIT COURT
HONORABLE JOSEPH F. BAMBERGER, JUDGE
ACTION NO. 90-CI-425
v.
RAYMOND L. SCHLAGEL AND KORLISS
M. SCHLAGEL
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
GUIDUGLI, JOHNSON AND SCHRODER, JUDGES.
JOHNSON, JUDGE:
Berling Construction Company (Berling) appeals
from a final judgment entered in the Boone Circuit Court on August
20,
1996,
which
awarded
Raymond
and
Korliss
Schlagel
(the
Schlagels) the sum of $1,224,494 following a jury trial where
Berling
was
found
liable
for
trespass,
breach
of
warranty,
violations of the Consumer Protection Act,1 and misrepresentation
regarding construction of a house.
The judgment includes $11,000
for trespass damages, $45,000 in compensatory damages, $1,140,000
in punitive damages plus $28,494 in attorney’s fees.
1
Kentucky Revised Statutes (KRS) Chapter 367.
Berling
raises
six
damages:
issues
on
appeal
regarding
the
award
of
punitive
(1) whether the jury instruction erroneously grouped all
theories of recovery together; (2) whether punitive damages can be
recovered
for
breach
of
a
contractual
warranty;
(3)
whether
punitive damages can be recovered for violations of the Consumer
Protection Act; (4) whether the trial court erred in omitting
the
"clear and convincing" standard of proof from the jury instruction;
(5) whether the award was excessive; and (6) whether the award
violated due process. Other issues raised by Berling include: (1)
whether the trial court erred by allowing certain expert testimony
concerning compensatory damages and by giving the compensatory
damages jury instruction; (2) whether the trial court erred by
refusing to admonish the jury regarding the Schlagels’ alleged
improper presentation of evidence; (3) whether the trial court
erred in failing to enter a directed verdict on the claim of
trespass; and (4) whether the trial court’s award of attorney’s
fees was excessive and unreasonable.
Finding no grounds for
reversible error, we affirm.
On or about May 24, 1989, the Schlagels purchased a new
house which had been constructed by Berling.
Berling agreed, in a
one-year builder's warranty, to repair or replace, free of costs,
all defects in material and workmanship reported by the Schlagels.
Shortly after the Schlagels occupied their house, they began to
notice problems and notified Berling of these problems.
the
problems
were
hidden
and
not
easily
disclosed
Many of
until
the
Schlagels occupied the house, i.e., no tar paper under the shingles
as required by the shingle manufacturer and the applicable building
-2-
code; a dead-end underground drainage pipe; no anchor bolts on one
end of the house; improper firewalling between the garage and the
house;
undersized
inadequate
framing
footers;
etc.
to
support
Berling
the
second
responded
to
story
some
deck;
of
the
Schlagels' complaints, but it claims that many of the problems were
never resolved because the Schlagels denied its workers access to
the property.
On May 23, 1990, the Schlagels filed a lawsuit against
Berling alleging breach of contractual warranty, violation of the
Consumer Protection Act, violation of the Kentucky Building Code,2
misrepresentation, and trespass.
tory and punitive damages.
The Schlagels claimed compensa-
Many depositions were taken and many
interrogatories were answered.
By order dated January 26, 1993,
the trial court set the matter for trial by jury on May 3, 1993,
but the trial was continued due to scheduling problems.
On May 7, 1993, the trial court ordered that the matter
be referred to the Master Commissioner "by virtue of the multiplicity and complexity of the issues . . . ."
The Schlagels appealed
and this Court3 and the Supreme Court4 affirmed the trial court's
order to refer the case to the Master Commissioner.
On
September
1,
1994,
the
trial
court
ordered
the
Schlagels to file a written election of remedies within thirty
days.
On November 22, 1994, the Schlagels elected the remedy of
damages.
By order entered November 22, 1994, the matter was
2
KRS 198B.130.
3
Case #93-CA-2307-OA, entered November 18, 1993.
4
Case #93-SC-1005-MR, rendered June 23, 1994.
-3-
assigned to trial by jury on March 20, 1995; however, for reasons
the record does not reflect, the trial was continued.
On October
24, 1995, the trial court ordered the case assigned to trial on
March 6, 1996.
A flurry of pre-trial motions and briefs were
filed, and on February 7, 1996, Berling moved for a continuance
based on the large number of witnesses and the fact that only three
days had been set aside for trial.
The trial court rescheduled the
trial for July 15, 1996.
On July 15, 1996, a five-day jury trial began.
The
Schlagels’ evidence included the testimony of a building inspector,
two civil engineers, a licensed surveyor, a building contractor and
a certified property appraiser.
The testimony of these witnesses
detailed many defects and the significance of those defects.
The
misrepresentation claim was based upon Berling's alleged representation that the house’s foundation was poured concrete, when the
house was actually constructed on three sides on a foundation of
poured concrete and on the back side on a foundation of concrete
blocks.
The Schlagels claimed that due to the foundation being
partly poured concrete and partly concrete block they suffered a
leaking foundation, cracking of the concrete floor, cracking of the
poured portion of the concrete foundation and other defects.
The
Schlagels claimed they would not have purchased the house if they
had known the truth about the foundation.
Berling’s evidence included the testimony of witnesses
who disputed the seriousness of the defects, the costs to repair
the defects and the diminution of the value of the house caused by
the defects.
On the fourth day of the trial, the jury viewed the
-4-
Schlagels’ property. When Berling closed its case, the trial court
directed a verdict in favor of the Schlagels on the issue of breach
of warranty.
The jury returned a verdict holding Berling liable for
trespass,
misrepresentation,
Protection Act.
and
violation
of
the
Consumer
The jury awarded the Schlagels damages of $11,000
for the trespass, $45,000 in compensatory damages for the defects,
and $1,140,000 in punitive damages. After the trial, the Schlagels
moved the trial court to award attorney’s fees of $28,494. Berling
opposed the motion arguing that since the Schlagels had changed
counsel six times, there was an unnecessary duplication of work and
thus the attorney’s fees were not reasonable.
The trial court
granted the Schlagels’ motion. Berling filed a motion for judgment
notwithstanding the verdict or in the alternative requested a new
trial.
This motion raised substantially the same arguments that
Berling now raises on appeal.
motion.
The trial court denied Berling's
This appeal followed.
A.
I. PUNITIVE DAMAGES
FAILURE TO SPECIFY THE THEORY OF RECOVERY
Berling argues that the only theory of recovery pursued
by the Schlagels that would support an award of punitive damages
was the tort of misrepresentation.
Berling claims that since the
jury instructions did not state under which theory of recovery a
punitive damages award could be made, the jury, when considering
punitive damages, was permitted to consider evidence of all of
Berling's conduct rather than only being allowed to consider
evidence
of
the
actions
concerning the foundation.
involved
in
its
misrepresentations
The trial court directed a verdict of
-5-
liability against Berling on the breach of warranty claim and the
jury found Berling liable under claims for trespass, misrepresentation and violations of the Consumer Protection Act.
The jury
instructions included a separate damages award for trespass and
grouped together the compensatory damages for Berling’s liability
on all of the other three causes of action.
Thus, it is impossible
to determine which part of the compensatory damages were awarded
for which cause of action.
However, for the purposes of determin-
ing whether the compensatory damages award supports the punitive
damages award, this alleged error is of no consequence.
It is well established that nominal compensatory damages
may
support
Mantooth,
a
Ky.,
jury’s
683
award
S.W.2d
of
250,
punitive
252
damages.
(1984);
and
Fowler
v.
Louisville
&
Nashville Railroad Co. v. Ritchel, 148 Ky. 701, 706, 147 S.W. 411,
414 (1912).
Since the jury found Berling liable under all three
causes of action, the trial court’s failure to separate the damages
among the causes of action, if error, was harmless error.
Thus,
the jury's compensatory damages award for all three causes of
action was sufficient to support the punitive damages award under
each separate cause of action.
Berling further claims that evidence of the actions of
Berling in breaching the warranty and violating the Consumer
Protection Act should not have been considered by the jury when
awarding
liability
punitive
can
damages.
support
a
Berling
punitive
contends
damages
that
award
and
only
that
tort
the
Schlagels pled only that Berling misrepresented the construction of
the foundation and based upon that isolated claim, the jury could
-6-
only have based their punitive damages award upon evidence of the
tortious actions related to the misrepresentations.5
Berling’s reliance on the Legislature’s enactment of KRS
411.184 in 1988 is misplaced.
While KRS 411.184(4) provides that
"[i]n no case shall punitive damages be awarded for breach of
contract", the Supreme Court in Wittmer v. Jones, Ky., 864 S.W.2d
885, 890 (1993), stated as follows:
“It suffices to say that this
Court could not interpret KRS 411.184 to destroy a cause of action
for punitive damages otherwise appropriate without fatally impaling
upon jural rights guaranteed by the Kentucky Constitution, Sections
14, 54, and 241.” Thus, Berling’s liability for breach of warranty
constituted a basis for the punitive damages award.
The Consumer Protection Act at KRS 367.170(1) states that
"[u]nfair, false, misleading, or deceptive acts or practices in the
conduct of any trade or commerce are hereby declared unlawful."
KRS 367.220 states in pertinent part as follows:
(1)
Any person who purchases or leases
goods or services primarily for personal,
family or household purposes and thereby
suffers any ascertainable loss of money or
property, real or person, as a result of the
use or employment by another person of a
method, act or practice declared unlawful by
5
Berling argues that the Schlagels’ closing argument
regarding the basis for their misrepresentation claim was improper.
However, Berling fails to indicate where they preserved the error
by objecting to the Schlagels’ allegedly improper arguments.
Kentucky Rules of Civil Procedure (CR) 76.12(4)(c)(iv). We cannot
review a matter which was not brought to the trial court's
attention.
Lawrence v. Risen, Ky. App., 598 S.W.2d 474, 476
(1980). Berling also failed to follow CR 76.12(4)(c)(iv) on other
issues.
We reviewed the record for Berling in each instance,
although we were not required to do so.
See
Hollingsworth v.
Hollingsworth, Ky. App., 798 S.W.2d 145, 147 (1990); and Sharp v.
Sharp, Ky., 491 S.W.2d 639, 644-645 (1973).
-7-
KRS 367.170, may bring an action . . . .
The
court may, in its discretion, award actual
damages and may provide such equitable relief
as it deems necessary or proper. Nothing in
this subsection shall be construed to limit a
person's right to seek punitive damages where
appropriate [emphasis added].
Berling relies on Ford Motor Co. v. Mayes, Ky. App., 575
S.W.2d 480 (1978), for the proposition that a cause of action other
than a Consumer Protection Act violation must exist if punitive
damages are to be recovered.
This Court in Mayes stated as
follows:
Because their recovery under the Consumer
Protection Act is for conduct which the act
declares to be "unlawful," they argue that any
violation of the act will support a claim for
punitive damages. We disagree. After authorizing civil actions for damages attributable
to unlawful acts under the Consumer Protection
Act, KRS 367.220(1) provides:
Nothing in this subsection shall be
construed to limit a person's right
to seek punitive damages where appropriate.
This provision does not purport to expand the
right to claim punitive damages.
It only
makes clear that the Consumer Protection Act
did not limit a right to punitive damages
where one previously existed.
Id. at 487 (emphasis added).
Berling argues that "[t]he Mayes
decision establishes, clearly and unequivocally, that Appellees'
reliance upon KRS § 367.220(1) as permitting punitive damage[s] was
blatantly misplaced. . . ."
misinterpreted Mayes.
However, we believe that Berling has
We believe the proper interpretation of
Mayes is that a violation of the Consumer Protection Act can
support a punitive damages award if the violation also meets the
-8-
legal criteria for awarding punitive damages. See KRS 411.184; KRS
411.186.
In
Wahba v. Don Corlett Motors, Inc., Ky. App., 573
S.W.2d 357, 360 (1978), this Court stated that “KRS 367.220(1)
allows
for
recovery
(emphasis original).
of
punitive
damages
where
appropriate”
We hold that a violation of the Consumer
Protection Act which also meets the requirements of the punitive
damages
statute—a
finding
of
oppression,
fraud,
or
malice—constitutes a basis for punitive damages.
B.
"CLEAR AND CONVINCING" STANDARD
Berling claims that pursuant to the plain language of KRS
411.184(2) the punitive damages instruction was erroneous because
it did not specify that a finding of liability must be made by the
standard of "clear and convincing evidence." While the statute, if
constitutional,6 is clear that the jury must be instructed on the
clear and convincing evidence standard of proof, Berling failed
under CR 51(3) to preserve this issue for appellate review.
CR
51(3) states that “[n]o party may assign as error the giving or the
failure to give an instruction unless he . . . makes objection
before the court instructs the jury, stating specifically the
matter to which he objects and the ground or grounds of his
objection.”
The general objection that Berling made to the giving of
the punitive damages instruction on the grounds that not all
theories of the case supported instruction was insufficient.
6
In
We note that the Supreme Court in Williams v. Wilson, Ky.,
972 S.W.2d 260 (1998), recently expressed no opinion as to the
constitutionality of KRS 411.184(2).
-9-
Chaney v. Slone, Ky., 345 S.W.2d 484, 486 (1961), the Court stated
as follows:
The object of this requirement [making
known the specific grounds for an objection]
is to give the trial court an opportunity to
avoid error.
Unless the stated ground or
grounds for the objection were valid it cannot
be said that the court was given that
opportunity.
For this reason the error we
observe on reviewing this record was not
preserved and thus would not authorize a
reversal.
The Court in Young v. DeBord, Ky., 351 S.W.2d 502, 503 (1961),
quoted from Clay, CR 51, comment 4, p. 458, and stated as follows:
“The Rule [CR 51] in effect condemns the
general objection to the giving or failure to
give an instruction.
It requires a party
making an objection to state specifically (a)
the matter to which he objects, and (b) the
grounds of his objections.
One important
purpose of this requirement is to limit the
use of a general objection as a device in
securing a subsequent reversal, when the court
may well have obviated the error if its
attention was directed at the proper time to
the particular matter about which the party
may subsequently complain on appeal.”
Berling did not tender instructions on punitive damages;
however, the Schlagels’ instruction on punitive damages included
the “clear and convincing” standard.
Obviously, the Schlagels
would not have objected to a change in the trial court’s proposed
instruction had Berling simply made its concerns known.
Berling’s
failure to specifically object to the allegedly erroneous instruction precludes our consideration of any such error on appeal.
Lewis v. Bledsoe Surface Mining Company, Ky., 798 S.W.2d 459, 460
(1990).
-10-
C.
EXCESSIVENESS OF AWARD
Berling also contends that the punitive damages award is
excessive.
In Prater v. Arnett, Ky. App., 648 S.W.2d 82, 86
(1983), this Court stated our standard of review for determining
whether a trial court erred in setting aside an award of damages as
follows:
Upon reviewing the action of a trial judge in
so doing, the appellate court no longer steps
into the shoes of the trial court to inspect
the actions of the jury from his perspective.
Now, the appellate court reviews only the
actions of the trial judge in setting aside
the verdict, to determine if his actions
constituted an error of law.
There is no
error of law unless the trial judge is said to
have abused his discretion and thereby rendered his decision clearly erroneous.
Further, the action of the trial judge is presumptively correct and the appellate court
will not hastily substitute its judgment for
that of the trial judge, who monitored the
trial and was able to grasp those inevitable
intangibles which are inherent in the decision
making process of our system.
The Supreme Court in Davis v. Graviss, Ky., 672 S.W.2d 928, 933
(1984), stated as follows:
Our earlier opinion discussing review of
the question of excessive damages in City of
Louisville v. Allen, Ky., 385 S.W.2d 179
(1964)[,] expresses essentially the same
analysis as Prater v. Arnett of the different
functions of trial and appellate courts. The
basic guideline for appellate review is set
out in the Allen case as follows:
“It serves to emphasize the initial
and primary role of the trial judge
in determining these issues; that
his decision shall be prima facie
correct and final; and that only in
rare instance when it can be said
that he has clearly erred, i.e.,
abused his discretion, will he be
-11-
reversed.”
(Emphasis
385 S.W.2d at 183-184.
original.)
Once the issue is squarely presented to the
trial judge, who heard and considered the
evidence, neither we, nor will the Court of
Appeals substitute our judgment on excessiveness for his unless clearly erroneous.
In short, the rules governing appellate
practice do not direct the appellate judge to
decide if the verdict shocks his conscience or
causes him to blush.
Those rules charge us
with the responsibility to review the record
and decide whether, when viewed from a standpoint "most favorable" to the prevailing
party, there is evidence to support the verdict and judgment.
Rodgers v. Kasdan, Ky.,
612 S.W.2d 133 (1981).
Berling argues that the Schlagels' "entire case was
designed to play on the passion and prejudice of the jury."
Berling argues that the amount of the award bears no relationship
to the underlying facts, is completely unsupported by the facts and
evidence, and could only be attributed to the jury's unfounded
passion and prejudice.
The Schlagels point out that a decision to
punish is indeed required to support an award of punitive damages
and that the jurors naturally felt some hostility toward the nature
and extent of the misconduct.
The Schlagels argue that the jury
heard evidence of safety-related building code violations and that
Berling had built over 400 homes with some having similar violations.
The Schlagels calculate that the punitive damages award
amounted to less than $3,000 per home built by Berling and that
this amount was far less than the cost of repair to the Schlagels'
home.
The
Schlagels
note
that
they
requested
$2,000,000
punitive damages and that they were awarded only $1,140,000.
-12-
in
The trial court's decision regarding a punitive damages
award is presumptively correct.
We can reverse only if the trial
judge has abused his discretion.
The trial judge heard the
witnesses firsthand and viewed their demeanor throughout the trial.
Upon review of the record, we cannot say the trial judge abused his
discretion in refusing to reduce the award.
D.
Berling
DUE PROCESS REQUIREMENTS
claims
that
the
punitive
damages
award
is
“grossly excessive” in relation to Kentucky’s legitimate interests
in punishing and deterring Berling’s conduct, and thus, entered
“the zone of arbitrariness that violates the Due Process Clause of
the Fourteenth Amendment.” BMW of North America, Inc. v. Gore, 517
U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809, 822 (1996).
See TXO
Production Corp. v. Alliance Resource Corp., 509 U.S. 443, 456, 113
S.Ct. 2711, 125 L.Ed.2d 366 (1993); and Pacific Mutual Life Ins.
Co. V. Haslip, 499 U.S. 21, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991).
A landmark Kentucky case that went before the U.S.
Supreme Court is Hanson v. American Nat’l Bank and Trust Co., Ky.,
844 S.W.2d 408 (1992).7
In Hanson the jury awarded $1,065,000 in
compensatory damages and $5,775,000 in punitive damages for fraud
and misrepresentation by a bank.
The Supreme Court of Kentucky
affirmed the punitive damages award.
However, the U.S. Supreme
Court vacated the judgment and remanded the case to be considered
in light of the factors listed in TXO Production Corp. v. Alliance
Resources Corp., supra (i.e., reasonableness, the amount of money
7
American Nat’l Bank & Trust Co. v. Hanson, 509 U.S. 918,
113 S.Ct. 3029, 125 L.Ed.2d 717 (1993).
-13-
potentially at stake, the bad faith of the party against whom
judgment was rendered, whether a scheme was employed which was part
of a pattern of trickery, fraud and deceit, and the wealth of the
offending party).
In TXO, the punitive damages exceeded compensa-
tory damages by 526 times.
On remand,8 our Supreme Court once
again affirmed the award and noted that TXO recognized that
“Such awards are the product of numerous, and
sometimes intangible, factors; a jury imposing
a punitive damages award must make a qualitative assessment based on a host of facts and
circumstances unique to the particular case
before it.”
Hanson, 865 S.W.2d at 311, quoting TXO, supra, 113 S.Ct. at 2720,
125 L.Ed.2d at 379.
In the case sub judice, the punitive damages award was
approximately 25 times the compensatory award.
The Schlagels
presented evidence of many defects in the house which were "hidden"
from view including:
pipes which go nowhere, no tar paper under
shingles, lack of anchors between some walls and the foundation,
and
improper
footings.
construction
or
omission
of
entire
sections
of
They also presented evidence of violations of building
safety codes.
Obviously, the jury concluded that these "hidden"
conditions and safety violations were reprehensible and capable of
being repeated.
A proper ground for awarding such a large amount
in punitive damages is to insure that Berling does not repeat the
wrongdoing on other unwitting purchasers.
We do not believe that
the award was so large and so unrelated to Berling’s conduct that
8
Hanson v. American Nat’l Bank & Trust Co., Ky., 865 S.W.2d
302 (1993).
-14-
it is “grossly excessive” and thus violative of the Due Process
Clause.
II.
Berling
next
COMPENSATORY DAMAGES
argues
that
the
trial
court
erred
by
allowing certain expert testimony concerning compensatory damages
and by giving the compensatory damages jury instruction.
argues
that
the
valuation
method
used
testified for the Schlagels was improper.
by
the
Berling
appraiser
who
The appraiser testified
that the house would have been worth $90,000 if it had been
properly constructed, but that as constructed the house was worth
only $48,000 because it would cost $42,000 to correct the problems.
Berling claims that the appraiser's valuation was "not an appraisal, but only a mathematical exercise" and that the appraiser's
"'after value' is merely a re-statement of someone else's cost of
repairs, with absolutely no independent analysis on his part."
Berling contends that the method was improper because under this
method the costs to repair will always equal the diminution in value.
The appraiser testified that he had been certified as an
appraiser
by
the
Kentucky
Appraiser
Board
appraisals for a bank as well as individuals.
and
had
performed
We believe that he
"demonstrated sufficient knowledge of real estate values in the
area to express an opinion for the jury to consider.”
Common-
wealth, Department of Highways v. Farmers Livestock Sales, Inc.,
Ky., 441 S.W.2d 777, 779-780 (1969). "The amount of that knowledge
only affected the weight of the testimony."
-15-
Id.
The appraiser testified that he inspected the property,
studied the plans, and discovered several hidden defects.
He
stated that the fair market value9 of the property as it then
existed must be based upon the costs to cure the defects.
He
testified that he doubted that the property could be sold without
the cure.10 We conclude that the appraiser was competent to express
an opinion as to the "before" and "after" value of the house and
that it was within the purview of the jury to accord it the proper
weight.
Berling argues that the jury instruction for compensatory
damages was improper because it did not limit those damages to an
amount not to exceed the diminution of fair market value.
In a
blasting case, Edwards and Webb Construction Co., Inc. v. Duff, Ky.
App., 554 S.W.2d 909 (1977), the Court emphasized that it was error
to permit recovery of the amount that was required to repair the
building since reasonable repair costs cannot exceed the difference
in market value before and after the damage.
If the cost of
repairs exceeds the difference in "before" and "after" market
value, the tortfeasor is only liable for the diminution in market
value.
"Certainly, if one has a $400.00 automobile and sustains
9
Regarding fair market value, "the test of value is the
worth in the market place . . . .” Farmers Livestock Sales, supra,
at 780. "By definition, ’fair market value’ represents the price
that a willing seller will take and a willing buyer will pay for
property, neither being under any compulsion to sell or buy."
Central Kentucky Drying Co., Inc. v. Commonwealth, Department of
Housing, Buildings and Construction, Ky., 858 S.W.2d 165, 167
(1993).
10
An engineer who prepared one of the estimates for the costs
of repair testified for the Schlagels that the house was not
marketable in its condition.
-16-
damages that would cost $1,000.00 to repair, the vehicle is a total
loss and an insurer, or tort-feasor, must pay only the total
value."
Id. at 911.
It has not been argued in this case that the
house was not repairable, and thus was a total loss.
Rather, an
engineer testifying for the Schlagels stated that the house was
marginally functional and could not be resold until most, if not
all, of the defects were cured.
We believe that in most cases the
"after" value of the house can be determined using traditional
means of valuation.
However, in this case, with the many hidden
and unusual defects for a newer house,11 we believe that there was
sufficient evidence to support the conclusion that the fair market
value reduction was equal to costs to repair. The jury instruction
for compensatory damages was not erroneous.
III.
IMPROPER PRESENTATION OF EVIDENCE
Berling's next issue is whether the trial court committed
reversible error by refusing to admonish the jury regarding the
Schlagels' alleged improper presentation of evidence when the jury
viewed the house.
On the fourth day of the trial, the jury
traveled to the Schlagels' house to inspect it.
The Schlagels'
attorney instructed them "not to put up any signs on things or
arrows" and "not to say a word" when the jury visited the house.
While the Schlagels were not present, they had placed a level
against a wall which they claimed to be out of plumb, and they had
11
The appraiser stated that the defects in the Schlagels'
house were defects not found in newer homes but were usually found
in much older homes. This is a unique situation and we conclude
that it is reasonable to conclude that the best means of determining the "after" value was through the appraiser's reliance on the
costs of repair.
-17-
placed a ladder on the deck leading up to the roof which they
claimed to be improperly constructed.
When Berling discovered the
Schlagels’ actions, a hearing was held and several jurors stated
that they had used the level on the wall and climbed the ladder to
observe the roof.
The trial court stated that such actions were
improper and were a form of testimony.
Berling indicated to the
trial court that it did not want a mistrial and requested that the
trial court admonish the jury.
The trial court failed to give an
admonition.
Berling argues in its brief that "[r]egardless of whether
or not a mistrial was requested, [we were] entitled to a Court
admonition to the jury."
However, Berling failed to renew its
request for an admonition and never demanded a ruling on that
request.
The Schlagels argue that since the trial court expressed
sympathy for Berling's complaint that the trial court's failure to
rule on the request or to admonish the jury was inadvertent and
that Berling should have renewed its motion for an admonition or
requested a mistrial.
In Branch v. Whitaker, Ky., 294 S.W.2d 948, 952 (1956),
the Court stated that a party must press the trial court for a
ruling on a motion.
The former Court of Appeals stated that "we
have consistently held that a motion or objection not ruled upon is
considered waived."
In Prichard v. Kitchen, Ky., 242 S.W.2d 988,
993 (1951), the former Court of Appeals stated that should the
trial court fail to rule on an objection, "counsel must insist upon
a ruling, and save an exception thereto, in order to raise the
question on appeal."
Thus, any error was waived by Berling.
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IV.
TRESPASS
Berling next argues that the Schlagels failed to prove
trespass.
The testimony at trial from Berling's own witness
indicated that a subcontractor working for Berling installed the
headwall in 1989, after the Schlagels owned the property and
without their consent.
However, Berling argues that its subcon-
tractor was an “independent subcontractor” which acted at the
direction of the planning and zoning commission.
that the subcontractor was not its agent.
Berling claims
Berling has once again
failed to comply with CR 76.12(4)(c)(iv) and has not shown where
this alleged error was preserved for appellate review.
The jury instruction for trespass stated as follows:
The jury is instructed that you will find
for the Plaintiffs if you believe from the
evidence presented at trial that:
1. The Plaintiffs were in lawful possession of their property, and;
2. That an employee of Berling Construction Co. or their agent intentionally or
negligently, entered the Plaintiffs’ property;
and
3. That the Plaintiffs had not given their
permission
to
the
Defendant,
Berling
Construction Co., to be on the property;
Otherwise, you shall find [for] the Defendant, Berling Construction Co.
Apparently,
instruction.
Berling
did
not
object
to
this
jury
Thus, the question of whether the subcontractor was
acting as Berling’s agent when it constructed the headwall was left
for the jury to determine as a question of fact.
However, while
the jury was given a definition for “negligently,” it was not given
a definition for “agent.”
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The Supreme Court in United Engineers & Constructors,
Inc. v. Branham, Ky., 550 S.W.2d 540, 543 (1977), stated as
follows:
It would not be disputed that in determining whether one is an agent or servant or an
independent contractor, substance prevails
over form, and that the main dispositive
criterion is whether it is understood that the
alleged principal or master has the right to
control the details of the work.
Thus,
the
question
of
Berling’s
legal
relationship
with
the
subcontractor was most likely a question of law and not proper for
determination by the jury.
However, since Berling failed to
properly preserve for our review any error in this instruction, we
must affirm on this issue. There was evidence of record to support
a reasonable jury’s determination that the subcontractor was acting
as Berling’s agent.
Berling’s own witness testified that the
headwall had been constructed by one of Berling’s subcontractors.
If the trial court erred in submitting this question to the jury,
Berling has failed to demonstrate how that error was preserved.
IV. ATTORNEY’S FEES
The final issue raised by Berling is that the trial court
erred in awarding attorney's fees and that the award was excessive
and unreasonable.
However, recovery of reasonable attorney's fees
is provided for in both the Consumer Protection Act and the
Kentucky Building Code.
KRS 367.220 and KRS 198B.130.
Berling
contends that the Schlagels had retained six different attorneys
and that the overlapping work of those attorneys wasted time and
made the attorney’s fees unreasonable.
In Gentry v. Gentry, Ky.,
798 S.W.2d 928, 938 (1990), the Supreme Court stated as follows:
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The amount of an award of attorney's fees
is committed to the sound discretion of the
trial court with good reason. That court is
in the best position to observe conduct and
tactics which waste the court's and attorneys’
time and must be given wide latitude to sanction or discourage such conduct.
Itemization of each attorney's work was provided as an attachment
to the motion for attorney’s fees.
We cannot conclude that the
trial court abused its sound discretion in awarding $28,494 in
attorney’s fees.
For the foregoing reasons, we affirm the judgment of the
Boone Circuit Court.
GUIDUGLI, JUDGE, CONCURS.
SCHRODER, JUDGE, CONCURS IN PART AND DISSENTS IN PART.
SCHRODER, JUDGE, CONCURRING IN PART AND DISSENTING IN
PART.
I agree with the Majority’s opinion until we get to the
amount of punitive damages, which I believe are excessive.
Recent
decisions of the United States Supreme Court recognize that the Due
Process Clause imposes a limit on awards of punitive damages.
BMW
of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134
L. Ed. 2d 809 (1996); TXO Production Corp. v. Alliance Resources
Corp., 509 U.S. 443, 113 S. Ct. 2711, 125 L. Ed. 2d 366 (1993);
Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 111 S. Ct. 1032,
113 L. Ed. 2d 1 (1991).
The standard of review in Kentucky to
assess whether a particular award of punitive damages is excessive
or not can be found in Davis v. Graviss, Ky., 672 S.W.2d 928 (1984)
and Fowler v. Mantooth, Ky., 683 S.W.2d 250 (1984).
These cases
require that the trial judge make a “first blush” determination of
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whether a punitive damages award is excessive or not in accordance
with the criteria set forth in CR 59.01(d), (e), and (f).
On appeal, the trial court’s determination is considered
presumptively correct and will be reversed only if it is “clearly
erroneous.”
Davis v. Graviss, 672 S.W.2d at 932; Fowler v.
Mantooth, 683 S.W.2d at 253.
In reviewing the record, I believe
the award of $1,140,000 in punitive damages is clearly erroneous
and unreasonably high.
In considering the contract price for the
house, the actions of the appellant, the cost of repairs or the
injuries of the appellees, and the conduct which punitive damages
are intended to deter, I believe the award was overkill.
BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEES:
Hon. James G. Woltermann
Hon. John S. “Brook” Brooking
Florence, KY
Hon. Paul R. Zurkuhlen
Louisville, KY
Hon. Dennis H. Shaw
Middletown, KY
ORAL ARGUMENT FOR APPELLANT:
ORAL ARGUMENT FOR APPELLEES:
Hon. James G. Woltermann
Florence, KY
Hon. Dennis H. Shaw
Middletown, KY
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