JAMES M. BREEDLOVE AND JANICE BREEDLOVE, HIS WIFE V. CITY OF EDDYVILLE
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RENDERED:
JANUARY 28, 2005; 2:00 p.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2003-CA-000336-MR
JAMES M. BREEDLOVE AND
JANICE BREEDLOVE, HIS WIFE
APPELLANTS
APPEAL FROM LYON CIRCUIT COURT
HONORABLE BILL CUNNINGHAM, JUDGE
CIVIL ACTION NO. 01-CI-00124
V.
CITY OF EDDYVILLE
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
DYCHE, KNOPF, AND MINTON, JUDGES.
MINTON, JUDGE:
This is an appeal from the circuit court’s grant
of summary judgment sustaining the City of Eddyville’s special
assessment liens on five subdivision lots purchased by James and
Janice Breedlove.
The circuit court ruled that Eddyville’s
assessment ordinance was properly enacted and the resulting
encumbrances enforceable even though when the Breedloves bought
the lots the city had neglected to comply with a self-imposed
notice requirement to file a copy of the ordinance with the Lyon
County Clerk.
On appeal, the Breedloves repeat the lack-of-
notice argument which we reject. They also argue that summary
judgment was improper, insisting that an issue of fact exists as
to whether Eddyville’s city clerk misinformed their attorney
about the existence of the unpaid assessments because their
attorney’s title opinion did not show the unpaid city
assessments, and he testified in discovery that he customarily
called the city clerk to check for unpaid city taxes or
assessments when certifying a title for property located in the
city.
But because there is no evidence that the attorney ever
contacted the city clerk to ascertain the status of the special
assessments and because his statements concerning his routine
business practice would be inadmissible at trial, there was no
genuine issue of material fact.
proper.
The summary judgment was
We affirm.
THE FACTUAL BACKGROUND
The Breedloves already owned lots numbered 29, 30, 31,
and 32 of the Sarah Lane Subdivision in the City of Eddyville,
Lyon County, Kentucky, when they bought lots numbered 21, 23,
25, 28, and 36 in 1996.
Before buying the lots in 1996, they
hired G. L. Ovey, Jr., a local attorney, to perform a title
examination.
Ovey certified the title, subject to a
$7,000 mortgage to the Bank of Lyon County and other exceptions
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and reservations as stated in his letter to the Breedloves,
dated June 26, 1996.
Ovey certified that there were no properly
recorded mechanics’ liens, lis pendens notices, or any other
encumbrances found recorded in the Lyon County Clerk’s office,
the Lyon County Sheriff’s office, or the Lyon Circuit Clerk’s
office.
The opinion letter makes no reference to a search of
the tax bills or assessment records affecting the property which
might have existed in the Eddyville City Clerk’s office.
The Breedloves bought the lots on July 3, 1996, for
$22,000.
released.
sale.
The bank’s mortgage was paid from the closing and
No other funds were withheld from the proceeds of the
About a month after the closing, Ovey sent the Breedloves
an updated title opinion letter confirming that their deed had
been properly recorded with the county clerk; and the bank’s
mortgage had been released.
The final certification adopted by
reference the remaining exceptions from the original title
certification.
Back in 1994, Eddyville had levied a street and sewer
assessment on the lots in the Sarah Lane Subdivision.
The city
held its first public hearing for Ordinance 1-24-94A to levy the
special assessment on October 12, 1993.
The Ordinance itself
was read before the Eddyville City Council, first, on January 24
and, again, on February 7, 1994.
Notice of it was also
published in the local newspaper, the Herald Ledger, on
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March 23, 1994.
The Ordinance stated that a copy of it “shall
be filed with the County Clerk of Lyon County, Kentucky.”
This
filing was not accomplished until six years later, March 23,
2000.
On December 7, 1999, Eddyville Mayor Jerry Peek sent a
letter to the Breedloves informing them that the assessment for
street and sewer improvements affecting lots numbered 21, 23,
25, 28, and 36 was unpaid.
was $14,803.15.
The amount due for the assessments
Since the Ovey’s title certificate did not
reveal the unpaid assessments and the Breedloves had assumed the
previous owners had paid them, they refused to pay the city.
Eddyville responded to the Breedloves’ refusal to pay
by imposing a “statutory lien” on the lots.
The city cited
Ordinance 1-24-94A, KRS 76.172, and KRS 107.160 as its authority
to impose such a lien.
The lien was filed in the Lyon County
Clerk’s office on April 3, 2000; and it affected all of the lots
the Breedloves bought in 1996.
PROCEEDINGS IN LYON CIRCUIT COURT
The Breedloves filed suit in Lyon Circuit Court on
July 2, 2001.
In their complaint, they alleged that Ordinance
1-24-94A was void or voidable; that the “statutory lien” was
also void or voidable; and that the city, acting through its
mayor, had slandered the Breedloves’ title to the property.
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Eddyville’s answer denied the allegations in the complaint and
discovery proceeded.
The Breedloves eventually moved for a partial summary
judgment.
Their motion asserted that Eddyville had failed to
comply with the requirements of the ordinance, that neither the
ordinance nor statutory lien were recorded at the time the
Breedloves purchased the lots, and that the statutory authority
cited for the lien was inapposite.
In response, Eddyville
claimed that failure to file the Ordinance was an oversight and
not fatal, the Breedloves had actual notice of the assessments,
and reference to inapplicable statutes did not invalidate the
lien.
The circuit court granted summary judgment in favor of
Eddyville on all issues and dismissed the complaint.
circuit court found that:
The
first, the Ordinance was valid and
was effective at the point of its publication in the Herald
Ledger; second, the statutory lien was valid; and third, the
Breedloves had notice, even if it was merely inquiry notice, of
the assessments.
The Breedloves filed a motion to alter, amend,
or vacate the court’s order and a motion for finding of facts;
and, on January 15, 2003, both motions were denied.
follows.
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This appeal
THE ISSUES ON APPEAL
The crux of the Breedloves’ appeal focuses upon a lack
of notice to them.
They concede that they had actual knowledge
of the assessments affecting the lots in the subdivisionas
evidenced by James Breedlove’s presence at the October 12, 1993,
public hearing when Ordinance 1-24-94A was first presented.
But
they insist that they cannot be found liable for the payment of
the overdue assessments because they did not have notice of the
unpaid assessments on these lots.
They argue that since the
City did not record its lien in the Lyon County Clerk’s office
until 2000, they had no way of knowing about the encumbrance for
unpaid assessments on these lots.
They also argue that
Eddyville’s delay in filing the ordinance with the County Clerk
invalidated it and that the statutory lien ultimately recorded
by Eddyville was invalid because it cited the wrong statutes as
authority.
Finally, the Breedloves contend that a factual issue
exists which precludes summary judgment:
whether the City Clerk
misled Ovey when he called the clerk’s office in the course of
his title examination to check on any unpaid city taxes or
assessments.
On all these points, we disagree.
THE STANDARD OF REVIEW
It is well-settled that summary judgment “is to be
cautiously applied and should not be used as a substitute for
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trial.”1
On appeal, the record must be “viewed in a light most
favorable to the party opposing the motion for summary
judgment.”
2
Summary judgment should only be affirmed “where the
movant shows that the adverse party could not prevail under any
circumstances.”3
The party opposing summary judgment can only
succeed if the party presents “at least some affirmative
evidence showing that there is a genuine issue of material fact
for trial.”4
Summary judgment was granted to the non-moving party
in this case.
Although the Breedloves made the motion for
partial summary judgment, the circuit court awarded summary
judgment in favor of Eddyville.
The Breedloves argue that this
was an abuse of the court’s discretion since the City never
brought its own motion for summary judgment.
But, “[a] court
may grant a summary judgment for the non-movant where there are
no genuine issues of fact.”5
This practice is sound “where
overruling the movant’s motion for summary judgment necessarily
requires a determination that the non-movant is entitled to the
1
Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476,
483 (Ky. 1991).
2
Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky.App. 1996).
3
Id.
4
Steelvest, supra, at 482; Kentucky Rules of Civil Procedure (CR) 56.
5
Kurt A. Phillips, Jr., Kentucky Practice, Rules of Civil Procedure
Annotated, vol. 7, Rule 56.03, cmt. 11 (1995).
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relief asked.”6
We believe that in this case, overruling the
Breedloves’ motion would have resulted in such an outcome.
Therefore, we do not believe the circuit court abused its
discretion by awarding the City summary judgment.
EDDYVILLE’S ORDINANCE IS VALID
The Breedloves argue that the circuit court erred as a
matter of law by concluding that Ordinance 1-24-94A was validly
enacted.
The pertinent language of the ordinance is as follows:
THIS ORDINANCE SHALL BE EFFECTIVE upon its
second reading and passage and publication;
at which time there shall be mailed by
certified mail to each affected property
owner in the described area a Notice of
Determination to Proceed with the project as
well as the fair basis of assessment to be
utilized, the estimated cost to the property
owner, and the ratio of costs each property
owner bears to the total cost of the entire
project.
BE IT FURTHER ORDAINED that upon publication
of the ordinance, a copy of the same shall
be filed with the County Clerk of Lyon
County, Kentucky.
In support of their argument, the Breedloves focus on
the second paragraph of the ordinance requiring that the
document be filed with the Lyon County Clerk.
Because
Ordinance 1-24-94A was not filed for six years after its
enactment, the Breedloves claim it was invalid.
6
They also cite
Id.; see also, Storer Communications of Jefferson County, Inc. v.
Oldham County Board of Education, 850 S.W.2d 340 (Ky.App. 1993);
Green v. Bourbon County Joint Planning Commission, 637 S.W.2d 626
(Ky. 1982).
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to Helm v. Citizens to Protect Prospect Area, Inc.7 for the
proposition that “[a] local legislative body to enact a valid
ordinance must observe all legal requirements, including those
they impose upon themselves.”8
The circuit court disagreed with the Breedloves’
contention, holding that the ordinance was valid.
Specifically,
the court held:
The Ordinance was enacted under KRS 91A.200.290, which deal with the procedures of
financing [improvements]. If a city decides
to proceed with an improvement by a special
assessment, it is required to adopt an
ordinance describing the nature of the
improvement, its scope, the cost, the basis
of the assessments, and the financing
method. Upon passage of this ordinance, the
city must publish the ordinance and send by
certified mail a notice of the determination
to proceed with the improvement, the fair
basis of assessment, and the estimated cost
to each owner. KRS 91A.260[.] All of these
steps were adhered to by the City of
Eddyville. Thus, it is valid under the
statutes. Further, the Court finds that he
[sic] ordinance went into effect as soon as
it was recorded in the local newspaper.
Even though a copy of the ordinance was
filed years after its publication, the Court
finds that it was still valid and in effect.
The language of the ordinance does not
indicate that recording is a requirement to
the time upon which the ordinance will be
effective.
7
864 S.W.2d 312, 314 (Ky.App. 1993).
8
Id.
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We agree with the circuit court’s assessment.
The
pertinent portion of the ordinance plainly states that the
ordinance will be effective “upon its second reading and passage
and publication.”
The evidence indicates that the City adhered
to all of those requirements of enactment.
Although the
ordinance was not filed for record with the county clerk in a
timely manner, we do not believe this delay was fatal to its
effectiveness.
So we affirm the circuit court’s decision with
regard to this issue.
REFERENCE TO INAPPOSITE STATUTES DID NOT INVALIDATE THE LIEN
The Breedloves argue that the statutory lien filed by
the City was invalid because the statutes referred to in the
lien were inapplicable.
The circuit court held that the lien
was valid “inasmuch as it is based upon KRS 91A and
Ordinance 1-24-94A,” despite the fact that KRS 76.172 and
KRS 107.160, the statutes expressly referred to in the lien, did
not apply.
We agree with the circuit court.
The statutes relied
upon by the City in imposing its lien were immaterial since they
were “not applicable to a city the size of Eddyville” and
referred to “procedures significantly different than those used
to enact Ordinance 1-24-94A.”
However, we believe this mistake
was harmless; merely referring to the incorrect statute does not
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necessarily invalidate the lien.
This is especially true since
there is other statutory authorityspecifically, KRS 91Ato
support the City’s imposition of the lien.
Therefore, although
the wrong statutes were cited, the lien itself was valid.
Therefore, we affirm on this issue.
THE ATTORNEY’S OFFICE CUSTOM DOES NOT MAKE A FACT ISSUE
The Breedloves argue that summary judgment was
erroneous because a genuine issue of material fact exists.
Specifically, they point to the allegedly conflicting testimony
of Ovey and Pamela Pruiett, the City Clerk of Eddyville. In his
deposition, Ovey claimed it was his custom, habit, and practice
to check not only with the Lyon County Clerk’s Office but, also,
with City Hall while performing title searches in order to
ensure property was not burdened by encumbrances.
Pruiett
testified that Ovey never contacted her office regarding the
existence of encumbrances on the Breedloves’ lots.
Because of
this testimony, the Breedloves claim summary judgment in favor
of the City was improper because there exists an issue of fact
as to whether the City Clerk misinformed the title examiner
about the existence of unpaid special assessments.
Ovey’s deposition contained the following line of
questions and answers:
Q.
Did your [title] opinion identify or
recite any title encumbrances that
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would have been asserted at that time
by the City of Eddyville affecting
these four [sic] lots?
A.
It did not.
Q.
And what would be your normal practice,
Mr. Ovey, to have followed in order to
have ascertained whether or not there
were any encumbrances asserted by the
City of Eddyville at that time?
A.
Well, first of all, I would check with
the Lyon County Clerk’s Office, which
is the office where all documents that
affect title, transfer of the property,
et cetera, should be filed. And it was
customary, when I was in private
practice, that these properties in the
city limits, that we would call the
city hall, check taxes and things of
that nature, see if there was any back
taxes owed, present taxes owed, or any
encumbrances.
Q.
Okay. Would assessments against lots
be something that would be reflected in
a title opinion as an exception to the
title opinion?
A.
It should be an exception if it was
recorded, definitely, in the clerk’s
office. When I have been told by the
city officials that there’s an
assessment, put them in a title before.
Q.
And this title opinion that you
rendered in June of ’96 then, would I
be correct in understanding that your
examination reveals no recorded
assessments, liens or encumbrances by
the City of Eddyville?
A.
That’s true.
Q.
And would it also reflect that you were
not informed or advised by the city of
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any liens, assessments, or encumbrances
other than ad valorem taxes?
A.
Let me just basically state, I do not
recall specifically.
Q.
I understand.
A.
I mean, it’s been ’96. You know, I
can’t tell you that I called at 11:01
to city hall and talked to a particular
clerk. All I can testify to is that it
was my custom, and habit, and practice
to do so.
Q.
Okay.
A.
And had I been informed, based upon
that custom of calling, that there was
an assessment, I would have, in all
likelihood, included that in that
title.
. . .
Q.
And you don’t have any reason to think
that your normal practice and custom
that you’ve described would have been
deviated from with regard to this
particular title opinion. Is that
correct?
A.
I don’t know why it would’ve of [sic].
Q.
And had you been advised of any
encumbrance, or assessments, or liens,
those would have been reflected in your
title opinion?
A.
In all likelihood. But I’m still of
the opinion that it might not have been
required. But I would, in all
likelihood, would have done that.
A careful reading of Ovey’s deposition testimony
reveals that he never affirmatively stated that he, nor anyone
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from his office, called City Hall to determine whether there
were any outstanding city tax bills or unpaid special
assessments owing on the property purchased by the Breedloves.
At best, Ovey candidly attested only to what had been his office
custom, stating that it was his “custom, and habit, and practice
to do so.”
Kentucky courts have long prohibited evidence of
“habit” or “custom” evidence from being introduced at trial.
The history of this exclusion was recently discussed by the
Supreme Court in Burchett v. Commonwealth:9
[H]abit evidence . . . has been inadmissible
in Kentucky courts for at least a century.
In Louisville & N.R. Co. v. Taylor's
Adm'r, it was held: "[N]either side can
give in evidence what the custom or practice
of either of the parties is. The question
is not what they were accustomed to do, but
what they did at the time in controversy."
This reasoning was subsequently affirmed
decades later in Cincinnati, N.O. & T.P. Ry.
Co. v. Hare's Adm'x. In 1990, the General
Assembly sought to permit habit evidence
when it enacted KRS10 422A.0406, which would
have created a state counterpart to the
federal rule permitting habit evidence. But
KRS 422A.0406 was subject to the approval of
this Court and, consistent with our
longstanding case law, we rejected that
legislation, which was subsequently
repealed. This judicial aversion to habit
evidence [led] Professor Lawson to
accurately remark: "The appeals courts of
9
98 S.W.3d 492 (Ky. 2003).
10
Kentucky Revised Statutes.
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Kentucky have not looked with favor upon
evidence of habit. Such evidence has
consistently been declared to be
inadmissible under Kentucky law."11
The Burchett Court perpetuated the prohibition against
the introduction of habit evidence, stating:
While habit evidence has an intuitive
appeal, close scrutiny reveals numerous
difficulties with its use. These
difficulties do more than suggest that the
correct course is not to allow such
evidence. The most glaring problem is that
the introduction of habit evidence violates
KRE12 403. Questions of admissibility start
with KRE 401, which permits evidence "having
any tendency to make the existence of any
fact that is of consequence to the
determination of the action more probable or
less probable than it would be without the
evidence." Evidence that a person had a
"regular" or "routine" practice of
performing some action would meet the
requirement of KRE 401. And all relevant
evidence, including evidence of a routine
practice, is admissible, unless otherwise
prohibited. See KRE 402. But "relevant[]
evidence may be excluded if its probative
value is substantially outweighed by [1] the
danger of undue prejudice, [2] confusion of
the issues, . . . or by [3] considerations
of undue delay, . . ." See KRE 403. Habit
evidence implicates all three of these
impermissible results.13
11
Id. at 494, 495 (citations omitted).
12
Kentucky Rules of Evidence.
13
Burchett at 496.
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The issue was further discussed by this Court in
Thomas v. Greenview Hospital, Inc.14
In Thomas, the appellant
argued that information regarding hospital “routine” was
erroneously admitted into evidence.
The appellant asserted that
such evidence was habit evidence and, therefore, was
inadmissible under Burchett and KRE 403.
In determining the
extent to which habit evidence must be excluded, we defined
“habit” as “an individual person’s specific regular or
consistent response to a repeated situation,”15 and “custom” as
“the routine practice or behavior on the part of a group or
organization that is equivalent to the habit of an individual.”16
We further held that Kentucky’s prohibition against the
introduction of habit evidence “excludes both personal habit and
custom or business routine practice in proving conforming
conduct.”17
However, we concluded that custom evidence is
admissible if it can be shown that the evidence is “relevant for
purposes other than to prove conforming conduct on a specific
occasion . . .”18
14
127 S.W.3d 663 (Ky.App. 2004).
15
Id. at 669.
16
Id.
17
Id. at 670.
18
Id.
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Ovey’s testimony, therefore, is the type of evidence
excluded by our courts under KRE 403 as “habit” or “custom”
evidence.
His testimony merely reveals that when he was in
private practice, it was his business custom to call City Hall
when completing a title search.
As we held in Thomas, this
evidence must be excluded at trial.19
But is it enough to
survive a motion for summary judgment?
Several jurisdictions have held that “genuine issues
of material fact” only include “evidence or statements that
would be admissible on the trial and have probative force” and
that only this evidence “may be considered in ruling on a motion
for summary judgment . . . .”20
In Bombard v. Fort Wayne
Newspapers, Inc., the United States Court of Appeals for the
Seventh Circuit held that the evidence relied upon by the party
opposing summary judgment “must be competent evidence of a type
otherwise admissible at trial.”21
Likewise, in Hartsel v. Keys,22
the United States Court of Appeals for the Sixth Circuit
reasoned that “the plaintiff must present ‘evidence on which the
jury could reasonably find for the plaintiff.’”23
19
Id. at 670, 671.
20
73 AmJur2d Summary Judgment § 50 (2001).
21
92 F.3d 560, 562 (7th Cir. 1996).
22
87 F.3d 795, 799 (6th Cir. 1996).
23
Id.
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Therefore, the
Court held that “hearsay evidence may not be considered on a
motion for summary judgment.”24
Although we agree with the Breedloves that Ovey’s
testimony could potentially present a genuine issue of material
fact which might preclude summary judgment, the testimony is
inadmissible.
As the Courts held in Bombard and Hartsel,
evidence relied upon by the party opposing summary judgment must
be admissible in court.
these courts.
We are persuaded by the reasoning of
We hold that in Kentucky, evidence that would
otherwise be inadmissible at trial cannot be relied upon in
opposing summary judgment.
To constitute a “genuine issue of
material fact,” evidence must be of the sort that could be
admitted at trial.
Since evidence of Ovey’s business custom would not be
admissible at trial, we conclude that there is no genuine issue
of material fact with regard to the allegedly conflicting
testimony of Ovey and Pruiett that would require reversal of the
summary judgment.
For these reasons, the decision of the Lyon Circuit
Court awarding the City of Eddyville summary judgment is
affirmed.
DYCHE, JUDGE, CONCURS.
24
Id.
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KNOPF, JUDGE, CONCURS AND FILES SEPARATE OPINION.
KNOPF, JUDGE, CONCURRING:
While I agree with the
reasoning and the result of the majority opinion, I write
separately to add an additional point.
The trial court and the
majority both find that Breedlove was on inquiry notice of the
1994 ordinance enacting the assessment.
As pointed out in the
trial court’s opinion, Breedlove received actual notice of the
assessment, at least as it related to the property which he
owned at the time.
However, there was no evidence that
Breedlove could have determined that any assessment was owed on
the lots which he acquired in 1996.
At the very least, the
extent of Breedlove’s actual notice of any assessments against
those properties was an issue of fact.
However, this issue of fact was not material and did
not preclude summary judgment.
Even if the assessments were not
filed of record prior to 1999, the City notified Breedlove of
the assessments in December of 1999 and filed the assessment
ordinance with the county clerk on March 23, 2000.
Thus, the
lien filed by the City on April 3, 2000, complied with the
requirements of KRS 91A.280 and was valid.
BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEE:
J. Alan Donohue, Esq.
Stephen E. Underwood, Esq.
Hopkinsville, Kentucky
Marvin Lee Wilson, Esq.
Eddyville, Kentucky
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