FELICIA M. WATTS, EXECUTRIX OF THE ESTATE OF BRENT E. WATTS, DECEASED v. LABORATORY CORPORATION OF AMERICA
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RENDERED:
APRIL 30, 2004; 10:00 a.m.
TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO.
2003-CA-001851-MR
FELICIA M. WATTS,
EXECUTRIX OF THE ESTATE
OF BRENT E. WATTS, DECEASED
APPELLANT
APPEAL FROM WARREN CIRCUIT COURT
HONORABLE THOMAS R. LEWIS, JUDGE
ACTION NO. 96-CI-01075
v.
LABORATORY CORPORATION OF AMERICA
APPELLEE
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE:
BUCKINGHAM, JOHNSON, AND KNOPF, JUDGES.
KNOPF, JUDGE:
Felicia M. Watts, as executrix of the estate of
Brent E. Watts, deceased, appeals from an order of the Warren
Circuit Court denying the estate’s motion to impose a penalty on
Laboratory Corporation of America pursuant to KRS 26A.300.
We
agree with the estate that the penalty is mandatory when a
judgment has been superseded while an ultimately unsuccessful
motion for discretionary review is pending, even if the judgment
was satisfied before the motion was denied.
Hence, we reverse
the circuit court’s order and remand for entry of a judgment
imposing the penalty.
The underlying facts of this action are not in
dispute.
Brent Watts brought a medical negligence claim against
Dr. Stephen Hodge and Dr. Hodge’s employer, Laboratory
Corporation of America (LabCorp).
He alleged that Dr. Hodge
negligently mis-diagnosed a biopsy as benign, and that the tumor
had metastasized by the time it was correctly diagnosed.
Following an eight-day trial in 1999, a jury awarded Watts a
total of $2,828,108.41 against Dr. Hodge and LabCorp, jointly
and severally.
Watts died shortly after the trial, and his estate was
substituted as a party.
Dr. Hodge and LabCorp each appealed
from the judgment, and they jointly filed a supersedeas bond
suspending enforcement of the judgment.1
In an unpublished
opinion rendered on April 13, 2001, this Court affirmed the
judgments against Dr. Hodge and LabCorp.2
1
In addition, the intervening plaintiff, Kentucky Medical
Insurance Company (KMIC), filed a cross-appeal from the trial
court’s judgment finding it liable pursuant to its policy with
Dr. Hodge.
2
Hodge v. Watts, et al., No. 1999-CA-000980-MR; Laboratory
Corporation of America v. Watts, et al., No. 1999-CA-001012-MR;
Watts v. Laboratory Corporation of America, et al., No. 1999-CA1066-MR; Laboratory Corporation of America v. Kentucky Medical
Insurance Company, et al., No. 1999-CA-001639-MR; and Kentucky
Medical Insurance Company v. Laboratory Corporation of America,
et al., No. 1999-CA-001699.
2
At that point, Dr. Hodge satisfied a portion of the
judgment, $1,800,000.00, plus interest, and took no further
action.
LabCorp, on the other hand, filed a motion for
discretionary review of this Court’s opinion.3
Seven months
later, LabCorp paid the balance of the judgment, plus interest,
to Watts’s estate.
The motion remained pending for another six
months, until the Supreme Court denied discretionary review on
September 18, 2002.
Thereafter, the estate filed a motion requesting that
the trial court impose an appeal penalty pursuant to KRS
26A.300.
The trial court initially denied the motion based upon
the erroneous assumption that LabCorp had withdrawn the motion
for discretionary review.
In ruling on a subsequent motion to
alter, amend or vacate, CR 59.05, the trial court conceded its
prior error, but nevertheless concluded that no penalty was due
under KRS 26A.300.
Watts’s estate now appeals from this order.
As a preliminary matter, LabCorp has moved this Court
to strike portions of the estate’s brief, and the motion was
passed to this panel on the merits.
3
LabCorp criticizes several
Laboratory Corporation of America v. Watts, No. 2001-SC-000633.
LabCorp filed a separate motion for discretionary review from
the portion of this Court’s opinion that affirmed the trial
court’s rulings relating to KMIC. Laboratory Corporation of
America v. Kentucky Medical Insurance Company, No. 2001-SC000622. This latter motion was withdrawn, apparently following
a settlement of those claims.
3
statements in the estate’s brief which speculate about LabCorp’s
motivation for seeking discretionary review.
LabCorp also
objects to a hypothetical set out in the estate’s brief, which
it argues bears no resemblance to the facts of the current case.
We find no merit to LabCorp’s motion to strike.
This Court has the authority to strike portions of
pleadings, briefs, or the record based upon any party’s failure
to comply with the rules relating to appeals.4
However, LabCorp
does not point to any rule of appellate procedure that the
allegedly offending remarks violate.
The estate’s speculation
about LabCorp’s motivations, while largely irrelevant to this
appeal, do not suggest any scandalous, illegal or improper
conduct.
Furthermore, this Court will not strike a portion of a
brief simply because a legal argument might be faulty.
Indeed,
after considering LabCorp’s brief, we conclude that its motion
to strike is not well taken.5
Accordingly, LabCorp’s motion to
strike is denied.
4
CR 73.02(2)(b).
5
As an appendix to its brief, LabCorp included a pleading filed
with the Kentucky Supreme Court in response to the estate’s
motion to deny the motion for discretionary review as moot. In
that motion, LabCorp’s counsel stated that, although LabCorp had
satisfied the judgment, it still had much at stake in pursuing
the motion for discretionary review due to the potential of a
loss-of-consortium action brought by Watts’s children. While
the estate characterizes these motivations as “frivolous”,
LabCorp has essentially conceded the factual point offered by
the estate that LabCorp pursued the motion for discretionary
4
The substantive question in this case concerns the
trial court’s interpretation of “appeal penalty” provisions set
out in KRS 26A.300.
KRS 26A.300(1) states that no damages shall
be assessed on a party’s first appeal as a matter of right as
contemplated by Section 115 of the Kentucky Constitution.
Subsections (2) and (3) further provide:
(2)
(3)
When collection of a judgment for the
payment of money has been stayed as
provided in the Rules of Civil
Procedure pending any other appeal,
damages of ten percent (10%) on the
amount stayed shall be imposed
against the appellant in the event
the judgment is affirmed or the
appeal is dismissed after having been
docketed in an appellate court.
Similar damages of ten percent (10%)
shall be imposed when a petition for
writ of certiorari, petition for
rehearing, or other petition which
stays collection of a judgment for
the payment of money is denied by an
appellate court under circumstances
not constituting a first appeal under
subsection (1) of this section.
The trial court reasoned that the principal motive
behind KRS 26A.300 is to discourage frivolous appeals that would
review to avoid liability under principles of collateral
estoppel in a subsequent action. In addition, LabCorp has
included in its appendix the exhibits which were attached to its
Supreme Court pleadings. These documents, settlement
correspondence from the estate’s counsel, are entirely
irrelevant to the matters pending in this appeal. Moreover,
these letters are clearly outside of the record on appeal, in
violation of CR 76.12(4)(vii). We have disregarded these
materials in our consideration of this appeal.
5
otherwise create unnecessary delay in collection for vindicated
plaintiffs.6
The trial court found that no appeal penalty should
be imposed because LabCorp had not acted in bad faith in seeking
discretionary review.
However, the purpose of KRS 26A.300 is
not to punish a litigant for any wrong done.7
Indeed, the
statute would be ill-suited to achieve that end.
The mere
denial of a motion for discretionary review “does not indicate
approval of the opinion or order sought to be reviewed and shall
not be cited as connoting such approval.”8
Similarly, the
decision by the Kentucky Supreme Court to deny discretionary
review does not imply that the motion was frivolous or brought
in bad faith.
Furthermore, appellate courts have the authority
to impose penalties for a frivolous appeal or motion under CR 11
and 73.02(4).
Thus, we disagree with the trial court that
LabCorp’s motives for filing the motion are relevant.
Rather, KRS 26A.300 imposes a penalty upon the
unsuccessful litigant for having delayed the litigation, and for
having kept the successful plaintiff from sooner collecting his
6
Citing Sharp v. Commissioner of Internal Revenue, 689 F.2d 87,
90 (6th Cir., 1982) and former KRS 21.130.
7
Coomer v. Gray, Ky., 750 S.W.2d 424, 427 (1988); citing
Phillips v. Green, 288 Ky. 202, 155 S.W.2d 841, 843 (1941).
8
CR 76.20(9)(a).
6
judgment.9
The central question in this case is whether that
delay must extend to the actual denial of the motion for
discretionary review, or whether the mere filing of an
unsuccessful motion triggers the plaintiff’s entitlement to the
penalty.
This is a question of statutory interpretation, which
we review de novo.10
This Court has stated that a fundamental
rule of statutory construction is to
determine the intent of the legislature,
considering the evil the law was intended to
remedy. . . . To determine legislative
intent, a court must refer to the words used
in enacting the statute rather than
surmising what may have been intended but
was not expressed. . . . Similarly, a court
may not interpret a statute at variance with
its stated language. Moreover, [w]here a
statute on its face is intelligible, the
courts are not at liberty to supply words or
make additions which amount, as sometimes
stated to providing casus omissus, or cure
an omission, however just or desirable it
might be to supply an omitted provision. It
makes no difference that it appears the
omission was mere oversight.11
As previously noted, the purpose of KRS 26A.300 is to
impose a penalty upon an appellant who pursues an unsuccessful
second appeal and thereby delays the plaintiff’s collection of
9
Coomer v. Gray, 750 S.W.2d at 427; citing Phillips v. Green,
155 S.W.2d at 843.
10
Revenue Cabinet v. Hubbard, Ky., 37 S.W.3d 717, 719 (2000).
11
Commonwealth v. Allen, Ky., 980 S.W.2d 278, 280-81 (1998)
(citations and internal quotations omitted).
7
his or her judgment.
Under subsection (2) of the statute, the
penalty is to be imposed when: (1) the collection of the
judgment has been stayed pending the second appeal; and (2) the
judgment is affirmed or the appeal is dismissed after having
been docketed in the appellate court.
Thus, under subsection
(2), the mere filing of an ultimately unsuccessful second appeal
triggers the penalty.
We conclude that the same reasoning applies to
subsection (3) of the statute.
The appeal penalty does not, as
the trial court opined, represent a windfall to the appellee.
KRS 26A.300(3) clearly contemplates that a litigant who seeks
discretionary review while the judgment is superseded bears the
risk of an unsuccessful outcome.
A judgment creditor is
entitled to enforcement of the judgment, and any period that
judgment is superseded following a matter-of-right appeal delays
enforcement of the judgment.
Although LabCorp satisfied the
judgment six months before the Kentucky Supreme Court denied its
motion for discretionary review, the judgment had been
superseded for seven months while the motion was pending.
“To
permit an appellant to stay and delay without penalty, as was
done in this case, contravenes the purpose of the penalty
8
provision and is wrong.”12
Consequently, the trial court erred
in denying the estate’s motion for a 10% penalty pursuant to KRS
26A.300(3).
However, contrary to the estate’s request for
relief, this penalty does not bear interest.13
Accordingly, the order of the Warren Circuit Court is
reversed, and this matter is remanded for entry of a judgment
imposing the statutory appeal penalty on the portion of the
judgment that was superseded while the motion for discretionary
review was pending before the Kentucky Supreme Court.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Stephen L. Hixson
Bowling Green, Kentucky
John R. Grise
Shawn Rosso Alcott
Kerrick, Stivers & Coyle PLC
Bowling Green, Kentucky
12
Rice v. Conley, Ky., 419 S.W.2d 769, 770 (1967); quoting Baker
v. Fidelity & Deposit Company of Maryland, Ky., 355 S.W.2d 150,
151 (1962) (referring to former KRS 21.130).
13
Phillips v. Green, 288 Ky. 202, 155 S.W.2d 841, 844 (1941).
9
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