CAHILL (DANIEL) VS. EARLYWINE RACING, INC. , ET AL.
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RENDERED: OCTOBER 24, 2008; 2:00 P.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2007-CA-000014-MR
DANIEL CAHILL
v.
APPELLANT
APPEAL FROM MASON CIRCUIT COURT
HONORABLE JOHN W. MCNEILL, III, JUDGE
ACTION NO. 05-CI-00316
EARLYWINE RACING, INC.; CHRIS EARLYWINE;
FRANCES N. EARLYWINE; LEMANS CORPORATION
d/b/a PARTS UNLIMITED and MOOSE RACING;
and PIONEER PACKAGING HOWARD WEISS
d/b/a PIONEER PACKAGING
AND
NO. 2007-CA-000187-MR
LEMANS CORPORATION
d/b/a PARTS UNLIMITED
and MOOSE RACING
v.
APPELLEES
CROSS-APPELLANT
CROSS-APPEAL FROM MASON CIRCUIT COURT
HONORABLE JOHN W. MCNEILL, III, JUDGE
ACTION NO. 05-CI-00316
DANIEL CAHILL
AND
CROSS-APPELLEE
NO. 2007-CA-000204-MR
HOWARD WEISS; AND PIONEER PACKAGING
& PAPER
CROSS-APPELLANTS
v.
CROSS-APPEAL FROM MASON CIRCUIT COURT
HONORABLE JOHN W. MCNEILL, III, JUDGE
ACTION NO. 05-CI-00316
DANIEL CAHILL
CROSS-APPELLEE
OPINION
AFFIRMING IN PART
AND REVERSING IN PART
** ** ** ** **
BEFORE: ACREE AND CAPERTON, JUDGES; ROSENBLUM,1 SPECIAL
JUDGE.
ROSENBLUM, SPECIAL JUDGE: Multiple parties appeal the October 20, 2006,
December 11, 2006, and December 22, 2006, orders of the Mason Circuit Court in
a personal injury action brought by Daniel Cahill against Earlywine Racing, Inc.,
Chris Earlywine and Frances M. Earlywine (“Earlywines”), Lemans Corporation,
d/b/a Parts Unlimited and Moose Racing (“Lemans”), Pioneer Packaging and
Retired Judge Paul W. Rosenblum sitting as Special Judge by assignment of the Chief
Justice pursuant to Section 110(5)(b) of the Kentucky Constitution.
1
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Paper, Howard Weiss d/b/a Pioneer Packaging and Paper, and Ava Weiss d/b/a
Pioneer Packaging and Paper (“Pioneer”) . The orders addressed several motions
before the trial court. We affirm in part and reverse in part.
Chris Earlywine and Frances N. Earlywine, through their business,
Earlywine Racing, Inc., owned and operated a motorcross track in Mason County,
Kentucky. On October 16, 2004, Danny Cahill went to the Earlywine facility
where he signed a release and waiver of liability and indemnity agreement
(“release”) prior to operating a dirt bike on the Earlywine track. That release
stated, in relevant parts:
[t]he undersigned . . . hereby releases, waives, discharges
and covenants not to sue the . . . track operator, track
owner . . . for any and all loss or damage, and any claim
or demands therefore on account of injury to the person
or property or resulting in death of the undersigned,
whether caused by the negligence of the releasees or
otherwise . . . hereby agrees to i[n]demnify and save and
hold harmless the releasees and each of them from any
loss, liability, damage, or cost they may incur . . .
whether caused by the negligence of the releasees or
otherwise . . . hereby assumes full responsibility for and
risk of bodily injury, death or property damage due to the
negligence of releasees or otherwise . . .
While operating his bike on the track, Cahill experienced an accident
when his bike became entangled in an advertising cover on a hay bale. As a result
of his accident, Cahill suffered permanent injuries and is now a paraplegic. The
hay bale cover bore the name of Parts Unlimited and was provided to the
Earlywines by Lemans, who had contracted with Pioneer and Weiss in the
manufacturing of the covers.
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Prior to Cahill’s accident, Lemans had placed an order with Pioneer
for hay bale covers with selected logos on them. Pioneer, in turn, placed an order
with Coast Converters, Inc., who manufactured the covers, printed the desired
logos and shipped the finished products to Pioneer. Pioneer inspected the samples
and forwarded them to Lemans, who in turn distributed them to various facilities
and motorcross events, including the Earlywine facility.
On October 11, 2005, Cahill filed a complaint against Earlywine
Racing, Inc. and its shareholders, Chris and Frances M. Earlywine. On October
13, 2005, Cahill amended his complaint as a matter of right and added Lemans
Corporation d/b/a Parts Unlimited and Moose Racing, Pioneer Packaging and
Paper, Ava Weiss d/b/a Pioneer Packaging and Paper and Howard Weiss d/b/a
Pioneer Packaging and Paper. On November 30, 2005, the Earlywines moved for
summary judgment. On December 16, 2005, Lemans filed a motion for leave to
file a cross-claim against the Earlywines and Earlywine Racing, Inc. and on
December 21, 2005, Ava and Howard Weiss and Pioneer Packaging and Paper
filed a motion to do the same. On August 16, 2006, Lemans filed a motion for
leave to file a third party complaint against Coast Converters, Inc. That motion
was granted and the third party complaint was filed against Coast Converters, Inc.
and served on August 31, 2006.2 On October 12, 2006, Cahill moved to amend his
complaint by seeking to establish Howard Weiss’ individual negligence along with
Although Coast Converters, Inc. has been served with the complaint, it had not, at the
time the appeal was filed, become involved in the action.
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clarifying the name of the company. That motion was opposed by Weiss as
untimely and prejudicial.
On October 20, 2006, the trial court entered an order granting the
Earlywines’ motion for summary judgment. On November 30, 2006, Lemans filed
a motion for summary judgment. On December 11, 2006, the trial court entered an
order disposing of the multiple motions before it. In that order, the court denied
Cahill’s motion to amend his complaint for a second time, dismissed Howard
Weiss and Ava Weiss as party defendants, and granted summary judgment to
Lemans, Howard Weiss and Pioneer Packaging and Paper on the grounds of the
Kentucky Middleman Statute.3 The order also denied the motions of Howard
Weiss and Pioneer Packaging and Paper for summary judgment based upon lack of
personal jurisdiction and the release signed by Cahill. The order further denied the
motion for summary judgment filed by Lemans based upon the release signed by
Cahill. The order of December 11, 2006, was made final in an order entered on
December 22, 2006.
On December 28, 2006, Cahill filed his notice of appeal to the orders
entered October 20, 2006, December 11, 2206, and December 22, 2006. Crossappeals were then filed on January 19, 2007, and January 23, 2007, by Lemans and
Howard Weiss and Pioneer Packaging and Paper, respectively.
Cahill argues the following trial court errors: granting Earlywines’
motion for summary judgment on the purported release; denying Cahill’s motion to
3
See KRS (Kentucky Revised Statutes) 411.340.
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amend his complaint for a second time to conform to the testimony and evidence
produced through discovery; dismissing Howard Weiss as a party defendant; and
granting summary judgment in favor of Lemans, Pioneer Packaging and Paper and
Howard Weiss pursuant to the Kentucky Middleman Statute.
We first note that Cahill has failed to comply with CR4 76.12(4)(c)(v),
which requires that a brief shall contain:
an “ARGUMENT” conforming to the statement of Points
and Authorities, with ample supportive references to the
record and citations of authority pertinent to each issue of
law and which shall contain at the beginning of the
argument a statement with reference to the record
showing whether the issue was properly preserved for
review and, if so, in what manner.
Cahill has failed to cite to the trial court record where his alleged errors were
preserved and instead only makes a general statement that he appeals upon
“adverse rulings.” See Elwell v. Stone, 799 S.W.2d 46 (Ky.App. 1990). However,
“dismissal based upon a failure to comply with CR 76.12 is not automatic.” Baker
v. Campbell County Board of Education, 180 S.W.3d 479, 482 (Ky.App. 2005).
Because a review of the modest record reveals responses filed by Cahill to the
motions for summary judgment filed by Lemans, the Earlywines, Howard and Ava
Weiss and Pioneer Packaging and Paper, we are satisfied that the failure to comply
with the rule is not fatal.
The standard of review of a trial court's grant of summary judgment is
“whether the trial court correctly found that there were no genuine issues as to any
4
Kentucky Rules of Civil Procedure.
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material fact and that the moving party was entitled to judgment as a matter of
law.” Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky.App.1996). Summary judgment is
proper when it appears that it would be impossible for the adverse party to produce
evidence at trial supporting a judgment in his favor. James Graham Brown
Foundation, Inc. v. St. Paul Fire Marine Ins. Co., 814 S.W.2d 273, 276 (Ky.1991).
An appellate court must review the record in a light most favorable to the party
opposing the motion and must resolve all doubts in his favor. Steelvest, Inc. v.
Scansteel Service Center , Inc., 807 S.W.2d 476, 480 (Ky.1991).
Cahill’s first argument is that the trial court erred by granting the
Earlywines’ motion for summary judgment based upon the release.
As a general rule, agreements which attempt to release a
person from the consequences of his own negligence are
invalid. The general rule has not been applied, however,
in situations involving release agreements signed by
participants in racing events. . . . Although there are no
Kentucky cases dealing with a release agreement in a
racing event or similar situation, [there is] overwhelming
authority for finding that such agreements do not violate
public policy and, therefore, are valid and enforceable.
Dunn v. Paducah Intern. Raceway, 599 F.Supp. 612, 613 (D.C.Ky. 1984) (internal
citations omitted). The Sixth Circuit has held that, under Kentucky law, an
agreement releasing a race track owner from liability only bars claims for ordinary
or gross negligence, and not for wanton or willful negligence. Donegan v. Beech
Bend Raceway Park, Inc., 894 F.2d 205, 208 (6th Cir. 1990)(applying Kentucky
Law). Because Cahill has not set out an argument for willful or wanton
negligence, the liability release is valid and enforceable. Cahill, citing to Hargis v.
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Baize, 169 S.W.3d 36 (Ky. 1995), argues that the release is invalid because it fails
to specifically identify the risk involved with the hay bale cover. We agree that the
requirement of clear identification of potential dangers may be a requirement to
uphold a standard release form. We believe that covered hay bales, which are
traditionally used to outline such race tracks, are within the scope of possible
dangers accompanying racing. This practice, combined with the holding of
Donegan, precludes us from extending Hargis to require specific identification of
dangers in a release agreement pertaining to racing. Accordingly, the October 20,
2006 order of the trial court which grants summary judgment in favor of Chris and
Frances N. Earlywine and Earlywine Racing, Inc. is affirmed.
Cahill next argues that the trial court erred by granting summary
judgment in favor of Lemans, Pioneer Packaging and Paper and Howard Weiss
pursuant to the Kentucky Middleman Statute. KRS 411.340 states:
In any product liability action, if the manufacturer is
identified and subject to the jurisdiction of the court, a
wholesaler, distributor, or retailer who distributes or sells
a product, upon his showing by a preponderance of the
evidence that said product was sold by him in its original
manufactured condition or package, or in the same
condition such product was in when received by said
wholesaler, distributor or retailer, shall not be liable to
the plaintiff for damages arising solely from the
distribution or sale of such product, unless such
wholesaler, distributor or retailer, breached an express
warranty or knew or should have known at the time of
distribution or sale of such product that the product was
in a defective condition, unreasonably dangerous to the
user or consumer.
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Cahill argues that the requirements of the statute were not fulfilled
because Coast Converters, Inc. was not properly before the court. We disagree.
Lemans’ motion to file a third party complaint was granted and that complaint was
filed and served on August 31, 2006, making Coast Converters, Inc. subject to the
jurisdiction of the trial court, as required by the statute.
Cahill also argues that a party who assists in providing specifications
for the finished product is excluded from claiming immunity under the Kentucky
Middleman Statute. In support of this argument, Cahill cites Worldwide
Equipment v. Mullins, 11 S.W.3d 50 (Ky.App. 1999). The facts of Worldwide are
distinguishable from the case sub judice in that Worldwide involved a party that
ordered a product from one manufacturer and then subsequently had that product
modified by a third party. Id. at 52-53. We do not believe that placing an order for
a product to be on par with modifying a product post-production. As such, we do
not believe that the parties at hand are exempt from the protection of the statute.
The record further supports the following facts: 1) the manufacturer, Coast
Converters, Inc., was identified and subject to the jurisdiction of the court; 2) the
product was sold by the distributor in its original manufactured condition or
package or in the same condition as when it was received; 3) the distributor did not
breach an express warranty; and 4) the distributor did not, and should not have
known, that the product was in a defective condition unreasonably dangerous to the
consumer. Lemans, Pioneer Paper and Packaging, and Howard Weiss were
middlemen, as contemplated by the statute, and therefore cannot be held liable to
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Cahill. Cahill has failed to show this court otherwise, and therefore the trial
court’s grant of summary judgment in favor of Lemans, Pioneer Packaging and
Paper and Howard Weiss, pursuant to the Kentucky Middleman Statute is
affirmed.
Cahill next argues that the trial court erred by denying his motion to
amend his complaint for a second time to conform to the testimony and evidence
produced through discovery. Specifically, Cahill sought to add new claims to
establish Howard Weiss’ individual negligence along with clarifying the name of
the company with which Howard Weiss was associated. CR 15.01 allows a party
to amend his complaint, after service of a responsive pleading, “only by leave of
court or by written consent of the adverse party; and leave shall be freely given
when justice so requires.”
Whether a party may amend his complaint is discretionary with the
circuit court, and we will not disturb its ruling unless it has abused its discretion.
Lambert v. Franklin Real Estate Co., 37 S.W.3d 770, 779 (Ky.App.2000). “An
abuse of discretion occurs when a trial judge's decision is arbitrary, unreasonable,
unfair, or unsupported by sound legal principles.” Baptist Healthcare Systems,
Inc. v. Miller, 177 S.W.3d 676, 684 (Ky. 2005) (quotation omitted).
First, the motion to amend the complaint for a second time was not
timely. The record confirms that Cahill had already amended his complaint once,
as a matter of right, and the action had proceeded for a year before Cahill made his
motion to amend his complaint for a second time. During this time, several
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motions for summary judgment had been filed and responded to and various
depositions had already taken place.
Second, an amendment should not be allowed if it unfairly prejudices
the opposing party. CR 15.02; Kroger Co. v. Jones, 125 S.W.3d 241 (Ky. 2004).
The new claims raised in the second amended complaint were unrelated to issues
being litigated at the time of the dispositive motions. Howard Weiss was not put
on notice that Cahill intended to seek recovery for alleged personal negligence.
Rather, in his original complaint, Cahill was only asserting “personal liability” for
business torts through a partnership.
Third, CR 15.03 allows relation back to an original complaint only if
very specific requirements are met. What CR 15.03 does require is that:
within the period provided by law for commencing the
action against him, the party to be brought in by
amendment (a) has received such notice of the institution
of the action that he will not be prejudiced in maintaining
his defense on the merits, and (b) knew or should have
known that, but for a mistake concerning the identity of
the proper party, the action would have been brought
against him.
CR 15.03(2) (emphasis added). It was Cahill’s obligation to make this showing
through his motion to amend in order to gain the benefit of relation back with
regard to a new defendant and avoid being time barred. The subject accident
occurred on or about October 16, 2004. Therefore, the limitations period expired
on October 16, 2005. KRS 411.140(1)(a). Cahill’s complaint was filed October
13, 2005, three days before the limitations period expired. It is not enough to
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merely file the initial complaint within the statutorily allowed period to enjoy the
benefit of the relation back rule. Rather, the rule states “within the period provided
by law for commencing the action against him, the party to be brought in by
amendment has received such notice.” CR 15.03(2). This means that in order to
add a new party and relate back, the new party must have received notice prior to
the statute of limitations running. Howard Weiss did not receive notice of claims
against him for personal tort liability, but rather only in his business capacity,
within the one-year limitations period. The allegations pled in the original
complaint make no reference to Howard Weiss in any capacity other than as a
partner in an alleged unincorporated business. Furthermore, the complaint failed to
place Howard Weiss on notice that recovery would be sought against him as a
separate individual. The Sixth Circuit has long held that it is very important that a
defendant be given notice of the capacity in which he is being sued. Lovelace v.
O'Hara, 985 F.2d 847,850 (6th Cir. 1993)(applying Kentucky law). Howard
Weiss first received notice of the potential claims against him personally when
Cahill moved for and tendered his second amended complaint, eleven months after
the limitations expired. It is clear that where a potential defendant is not aware of
an action against him within the limitations period, then the relation back rule is
not met. Nolph v. Scott, 725 S.W.2d 860, 862 (Ky. 1987); Lovelace, supra 985
F.2d at 850.
Fourth, appellant failed to meet the requirements of CR 15.03(2)(b).
There is no evidence that Weiss “knew or should have known” of these claims
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against him prior to October 16, 2005. CR 15.03(2)(b). Cahill has failed to show
that, but for his mistake in the identity of the proper defendants, Howard Weiss
would have known he would have been named as an allegedly personally negligent
individual. Accordingly, Cahill has failed to show that the trial court abused its
discretion and therefore that portion of the order denying Cahill’s motion to amend
his complaint for a second time is affirmed.
Cahill’s next argument is that the trial court erred by dismissing
Howard Weiss as a party defendant. Howard Weiss is an officer and shareholder
of a California corporation. The first amended complaint improperly pled Howard
Weiss as personally responsible for the negligence of a partnership. The first
amended complaint did not allege personal negligence on the part of Howard
Weiss. The record does not establish that Howard Weiss’ shareholder status in the
corporation creates any personal liability. We thus conclude that the trial court
properly dismissed Howard Weiss as a party defendant.
Lemans, on cross-appeal, argues that the release and waiver of
liability and indemnity agreement also insulates Lemans and therefore the trial
court erred in denying summary judgment in its favor on this issue. Furthermore,
Pioneer Packaging and Paper and Howard Weiss, on cross-appeal, argue that the
trial court erred in denying summary judgment on the grounds of personal
jurisdiction and based upon Cahill’s release and waiver. The release which Cahill
signed held harmless all: “promoters, sponsors [and] advertisers . . . and each of
them, their officers and employees,” collectively known as “releasees . . . from all
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liability to [Cahill] . . . whether caused by the negligence of the releasees or
otherwise.” Lemans, as a sponsor of the event, was therefore covered under the
agreement and should have been insulated. Additionally, Pioneer Packaging and
Paper and Howard Weiss, acting as agents of the sponsor Lemans, would also be
covered and insulated. Our analysis pertaining to the release of the Earlywines
applies here as well. Accordingly, we reverse the trial court’s denial of summary
judgment to Lemans, Pioneer Packaging and Paper, and Howard Weiss on the
basis of the executed release.
Finally, the issue of personal jurisdiction over Howard Weiss and
Pioneer Packaging and Paper is rendered moot and we thus decline to address this
issue.
For the foregoing reasons, the October 20, 2006, December 11, 2006,
and December 22, 2006, orders of the Mason Circuit Court are affirmed in part and
reversed in part.
ACREE, JUDGE, CONCURS WITH SEPARATE OPINION.
CAPERTON, JUDGE, CONCURS AND JOINS ACREE, JUDGE,
IN HIS SEPARATE OPINION.
ACREE, JUDGE, CONCURRING: I concur but write separately
only as to a narrow issue regarding the amendment of pleadings.
I believe Howard Weiss did receive sufficient notice to deprive him of
the defense of the limitations statute. As the majority stated, “Howard Weiss did
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not receive notice of claims against him for personal tort liability, but rather only in
his business capacity.”
Can a plaintiff who has brought a timely action against a
defendant amend his complaint, after the statute of
limitations has run, to assert a claim against the same
defendant in a different capacity? When presented with
this question in Smiley v. Hart County Board of
Education[, 518 S.W.2d 785 (Ky. 1974)], a divided Court
of Appeals [now Supreme Court] held that such
amendment was proper.
H. L’Enfant, “Kentucky Law Survey: Civil Procedure,” 64 Ky.L.J. 357, 364-66
(1975); see Smiley at 786; see also Cook v. Holland, 575 S.W.2d 468, 477
(Ky.App. 1978). The purpose of CR 15.03 is to defeat a defense based on the
statute of limitations when the court is satisfied that the defendant was given
adequate notice of the claim through the original complaint. Tiller v. Atlantic
Coast Line R. Co., 323 U.S. 574, 581, 65 S.Ct. 421, 424 (1945)(interpreting Fed.
R. Civ. P. 15(c) upon which CR 15.03 is based); see also, Miller v. American
Heavy Lift Shipping, 231 F.3d 242, 251 (6th Cir. 2000). Weiss clearly had notice of
the claim through the original complaint.
However, because I agree that Cahill’s motion to amend the pleadings
was not timely and unfairly prejudiced Weiss, I concur in the remainder of the
opinion.
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BRIEFS FOR APPELLANT:
Jerry M. Miniard
Florence, Kentucky
BRIEF FOR APPELLEES,
EARLYWINE RACING, CHRIS
EARLYWINE AND FRANCES N.
EARLYWINE:
Mark T. Hayden
Cincinnati, Ohio
BRIEF FOR APPELLEES/CROSSAPPELLANTS, PIONEER
PACKAGING AND HOWARD
WEISS:
John G. McNeill
Elizabeth A. Deener
Lexington, Kentucky
BRIEF FOR APPELLEE/CROSSAPPELLANT, LEMANS CORP.:
William P. Swain
Patricia L. Gregg
Louisville, Kentucky
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