RYDER INTEGRATED LOGISTICS, INC. v. BRASHEAR ENTERPRISES, INC. D/B/A SNELLING PERSONNEL SERVICES; SNELLING AND SNELLING, INC.; AND ADVANCED PROCESSING SYSTEMS, INC., D/B/A SNELLING PERSONNEL SERVICES
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RENDERED:
OCTOBER 6, 2006; 2:00 P.M.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2005-CA-001553-MR
RYDER INTEGRATED LOGISTICS, INC.
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE F. KENNETH CONLIFFE, JUDGE
ACTION NO. 01-CI-006244
v.
BRASHEAR ENTERPRISES, INC.
D/B/A SNELLING PERSONNEL
SERVICES; SNELLING AND SNELLING,
INC.; AND ADVANCED PROCESSING
SYSTEMS, INC., D/B/A SNELLING
PERSONNEL SERVICES
APPELLEES
OPINION
REVERSING
** ** ** ** **
BEFORE:
ACREE, GUIDUGLI, AND HENRY, JUDGES.
HENRY, JUDGE:
Ryder Integrated Logistics, Inc. (“Ryder”)
appeals from a Memorandum Order of the Jefferson Circuit Court
dismissing its case against Brashear Enterprises, Inc., Snelling
and Snelling, Inc., and Advance Processing Systems, Inc.
pursuant to the “housekeeping rule” set forth in Kentucky Rule
of Civil Procedure (“CR”) 77.02(2).
remand.
Upon review, we reverse and
The background of this case is as follows: Ryder is in
the business of providing warehousing and logistics services for
manufacturers at various locations across the United States,
including Jefferson County.
Ryder contracted with the
appellees, who are in the business of providing personnel and
staffing services, for the provision of temporary dock support
personnel.
Among the employees provided by the appellees was a
man named Earl Crawford, who was placed at a security-sensitive
facility in Louisville belonging to Samsung International Inc.
(“Samsung”).
On or about June 8, 2001, Crawford – who has an
extensive criminal record in Jefferson County – participated in
the theft of over $136,000.00 in Samsung products from the
facility.
As a result of this act, Ryder was forced to
reimburse Samsung for the cost of the stolen product.
On
September 12, 2001, Ryder filed suit against the appellees in
the Jefferson Circuit Court, contending that they were negligent
in the hiring and placement of Crawford and in failing to advise
Ryder of his criminal history.
According to Ryder, since the filing of its complaint,
the parties have expended much time, energy, and expense in
litigating this case, including engaging in substantial
discovery and submitting a number of pleadings for the circuit
court’s review.
Ryder specifically notes that the parties have
taken well over 400 pages of depositions, with one deposition
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including 2,408 pages of attached exhibits.
A hiatus in
activity occurred, however, when Ryder’s original counsel,
William B. Owsley, resigned from his position at Wyatt, Tarrant
& Combs, LLP’s Lexington office in August 2004.
After Owsley’s
departure, Ryder requested that Wyatt continue to prosecute the
action, and the files were transferred to the firm’s Louisville
office to be reviewed by K. Gregory Haynes.
According to Ryder,
in the following months, Haynes and his associate, Kathryne B.
Raines, familiarized themselves with the case and attempted to
pursue settlement talks with the appellees.
When these talks
failed, Ryder filed a Notice of Substitution of Counsel on
February 14, 2005.
Just three days later, on February 17, 2005, the
circuit court issued a Notice, pursuant to CR 77.02(2), advising
Ryder to show good cause as to why no steps of record had been
taken for more than one year or its case would be dismissed for
want of prosecution.
Ryder responded by filing an affidavit
from Haynes setting forth the abovementioned reasons as to why a
delay in the prosecution of the case had occurred.
Nevertheless, on March 29, 2005, the circuit court entered an
order dismissing the case for lack of prosecution.
On April 7, 2005, Ryder filed a motion asking the
court to reconsider its order of dismissal.
The appellees filed
a response taking no position on the matter.
On July 8, 2005,
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the court entered an order denying Ryder’s motion.
That order
reads as follows:
FACTS
This case was filed September 12, 2001.
It has never had a pre-trial conference or
trial date. Plaintiff indicates it has been
proceeding with the due diligence, and the
file does indicate three depositions taken
on October 6, 7, and 13 of 2003.
The file reflects that all parties were
before the Court by November 2001. In July,
2002 notices were sent for deposition. In
December 2002, an Agreed Confidentiality
Order was tendered. In July, 2003
Defendant, Snelling, filed a motion for a
Judgment on the Pleadings or Summary
Judgment, Plaintiff responded in August
2003. In October 2003, Plaintiff moved to
amend the Complaint to include punitive
damages, to which the Defendant, Snelling
objected.
Although an AOC 280 apparently was not
filed for pending motions, the Court entered
an order dated December 17, 2003, denying
Defendant’s motion for Judgment of
Dismissal.
No pleadings were filed during the
entirety of 2004. On February 14, 2005,
Plaintiff filed notice of a change of
counsel within the same firm. On February
17, 2005, a sua sponte notice pursuant to CR
77.02 was sent out addressed to Plaintiff’s
original counsel. On March 1, 2005,
Plaintiff filed a response to the CR 77.02
motion. By order entered March 29, 2005,
the Court after considering Plaintiff’s
affidavit, dismissed the complaint per the
rule.
The Plaintiff then asked the Court to
alter or amend its order on March 29.
CONCLUSIONS
In the motion to reconsider, the
Plaintiff contends the previous counsel left
the firm in August of 2004, and, there was
the brief hiatus from that date until
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February 14, 2005, while new counsel became
familiar with the file. Plaintiff points
out that the order of substitution was filed
three days before the entry of the sua
sponte motion. The reality is that the sua
sponte notice was in all probability signed
by the Court at the first of the month as
part of an annual review of all pending
actions, before the Plaintiff’s substitution
was filed, but not entered until later.
Nonetheless, the Court does not consider a
substitution of counsel, which is the only
pleading filed by the parties in more than
fifteen months, a substantial step that
would avoid a 77.02 dismissal.
This case was forty months old when the
Court sent out its notice. It is not a
complicated proceeding.
ORDER
Accordingly, the Plaintiff’s motion to
alter or amend the Court’s order of March
29, 2005 is DENIED.
This is a final and appealable order.
This appeal followed.
On appeal, Ryder contends that the circuit court erred
in dismissing its case because pretrial steps had occurred in
the year prior to the court’s issuance of its CR 77.02(2)
notice, and because it demonstrated good cause for any delay in
activity.
CR 77.02(2) reads as follows:
At least once each year trial courts shall
review all pending actions on their dockets.
Notice shall be given to each attorney of
record of every case in which no pretrial
step has been taken within the last year,
that the case will be dismissed in thirty
days for want of prosecution except for good
cause shown. The court shall enter an order
dismissing without prejudice each case in
which no answer or an insufficient answer to
the notice is made.
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CR 77.02(2) provides a mechanism whereby a circuit court may
remove stale cases from its docket and is often referred to as a
“housekeeping” rule. Hertz Commercial Leasing Corp. v. Joseph,
641 S.W.2d 753, 755 (Ky.App. 1982).
The rule’s phrase “no
pretrial steps” has been construed “to encompass situations in
which no action of record has been taken by either party during
the year next preceding the judges’ review of the docket.”
Bohannon v. Rutland, 616 S.W.2d 46, 47 (Ky. 1981).
Dismissals
for lack of prosecution pursuant to CR 77.02 are reviewed under
an abuse of discretion standard.
S.W.3d 348, 351 (Ky.App. 2006).
Toler v. Rapid American, 190
“The test for abuse of
discretion is whether the trial judge’s decision was arbitrary,
unreasonable, unfair, or unsupported by sound legal principles.”
Sexton v. Sexton, 125 S.W.3d 258, 272 (Ky. 2004).
“The power of
dismissal for want of prosecution is an inherent power in the
courts and necessary to preserve the judicial process.”
Nall v.
Woolfolk, 451 S.W.2d 389, 390 (Ky. 1970).
As noted by the circuit court, prior to Ryder’s filing
its Notice of Substitution of Counsel on February 14, 2005, the
last item in the record was a December 17, 2003 order denying
the appellees’ motion for summary judgment.
What the circuit
court failed to acknowledge, however, is that Haynes’ affidavit
reflects that Ryder and the appellees had been engaging in
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settlement negotiations in the months prior to the CR 77.02(2)
notice, with those negotiations being terminated by the
appellees in a January 14, 2005 letter.
deny these facts.
The appellees do not
Despite being advised of this by Ryder, the
court still found that CR 77.02(2) dismissal was appropriate.
In Bohannon v. Rutland, supra, our Supreme Court indicated that
settlement negotiations constituted a “pretrial step” for
purposes of CR 77.02(2).
Bohannon, 616 S.W.2d at 46-47.
Consequently, as such negotiations occurred here in the year
before the circuit court reviewed the docket and issued its CR
77.02(2) notice, the court’s decision to dismiss Ryder’s case
under this rule was erroneous and an abuse of discretion.
We
therefore need not address Ryder’s other arguments.
Accordingly, the decision of the Jefferson Circuit
Court is reversed, and this case is remanded for further
proceedings.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
K. Gregory Haynes
Matthew A. Williams
Louisville, Kentucky
Elizabeth Ullmer Mendel
Louisville, Kentucky
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