PINSON (STEVE) VS. THACKER (BOBBY), ET AL.Annotate this Case
RENDERED: NOVEMBER 26, 2008; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
APPEAL FROM PIKE CIRCUIT COURT
HONORABLE STEVEN D. COMBS, JUDGE
ACTION NO. 04-CI-01216
BOBBY THACKER; AND
THACKER AUTO PARTS, INC.
THACKER AUTO PARTS, INC.;
AND BOBBY THACKER
APPEAL FROM PIKE CIRCUIT COURT
HONORABLE STEVEN D. COMBS, JUDGE
ACTION NO. 04-CI-01216
STEVE PINSON; SHERRY
PINSON; JAMES L. HAMILTON;
LARRY D. BROWN; AND LARRY D.
** ** ** ** **
BEFORE: ACREE AND VANMETER, JUDGES; HENRY,1 SENIOR JUDGE.
VANMETER, JUDGE: The parties filed two related appeals from a judgment
entered by the Pike Circuit Court after a jury found Steve Pinson (Pinson) and
Sherry Pinson jointly and severally liable to Bobby Thacker (Thacker) and Thacker
Auto Parts, Inc. (Thacker Auto). For the reasons stated hereafter, we affirm.
In March 1993, the Pinsons purchased an auto parts business from
Thacker Auto for $300,000, secured by a promissory note and mortgage. Pinson
leased the business premises from Thacker and continued to operate the business
as Nationwide Auto Parts. Eleven years later, in July 2004, the Pike District Court
found Pinson guilty of forcible detainer and directed him to vacate the business
premises. In August 2004 Thacker Auto filed a mortgage foreclosure action
against Pinson. Meanwhile, Pinson and his wife filed several bankruptcy
In November 2004, before Pinson finished moving inventory from the
premises, which he had been ordered to vacate, the leased building and its contents
were destroyed by fire. Thacker then intervened in the foreclosure action,
asserting that Pinson had defaulted in his rent payments, and that he had
“negligently or otherwise” caused the fire. Further, Thacker Auto amended its
Senior Judge Michael L. Henry sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes
complaint to name Pinson’s casualty insurance provider, Kentucky Farm Bureau
(Farm Bureau), as a defendant in the action. That claim was eventually resolved
by Farm Bureau’s tender to the Pike Circuit Court Clerk of a total of $50,000 for
structural loss and $160,000 for inventory loss. In April 2006 the court entered a
partial summary judgment awarding Thacker the $50,000 tendered by Farm
Bureau for the structural loss.
The civil action went to trial in November 2006, and the jury found
that Pinson intentionally started the fire. In accordance with the jury’s verdict, the
court entered a judgment finding the Pinsons jointly and severally liable to pay (1)
Thacker a total of $109,600 plus prejudgment and postjudgment interest relating to
unpaid rent and structural damage, (2) Thacker Auto $45,900 plus prejudgment
and postjudgment interest relating to the unpaid promissory note, (3) Thacker Auto
$19,000 in attorney’s fees, and (4) costs to both Thacker and Thacker Auto. The
court subsequently amended its judgment to prioritize the various liens, and to
reflect that Steve Pinson individually, but not Sherry Pinson, was liable for
payment. The court also found that $50,000 of the judgment in favor of Thacker
for the destruction of the premises already had been satisfied by the April 2006
partial summary judgment in his favor. The parties’ appeals, later designated by
this court as an appeal and cross-appeal, followed.
Pinson2 asserts in Appeal No. 2007-CA-000262-MR that the evidence
was insufficient to support the jury’s finding that he intentionally set the fire.
Sherry Pinson, who is not a party to Appeal No. 2007-CA-000262-MR but is named as an
appellee in Appeal No. 2007-CA-000282-MR, has not filed a brief on appeal.
Further, he contends that the trial court erred by awarding prejudgment interest on
the fire loss, by awarding attorney’s fees to appellees, by admitting evidence
regarding his purchase of an insurance policy, and by admitting evidence regarding
his prior bankruptcy.
First, we disagree with Pinson’s argument that the evidence did not
support the jury’s verdict that he intentionally set the fire, and that the court
therefore erred by failing to grant a directed verdict or judgment n.o.v. in his favor.
As recently reaffirmed by the Kentucky Supreme Court,
[a]ppellate review of a trial court’s denial of a
motion for directed verdict is limited to a determination
of whether the jury’s verdict was palpably or flagrantly
contrary to the evidence presented at trial:
Upon review of the evidence supporting a
judgment entered upon a jury verdict, the role of
an appellate court is limited to determining
whether the trial court erred in failing to grant the
motion for directed verdict. All evidence which
favors the prevailing party must be taken as true
and the reviewing court is not at liberty to
determine credibility or the weight which should
be given to the evidence, these being functions
reserved to the trier of fact. The prevailing party is
entitled to all reasonable inferences which may be
drawn from the evidence. Upon completion of
such an evidentiary review, the appellate court
must determine whether the verdict rendered is
“‘palpably or flagrantly’ against the evidence so
as ‘to indicate that it was reached as a result of
passion or prejudice.’” If the reviewing court
concludes that such is the case, it is at liberty to
reverse the judgment on the grounds that the trial
court erred in failing to [grant] the motion for
directed verdict. Otherwise, the judgment must be
Stringer v. Wal-Mart Stores, Inc., 151 S.W.3d 781, 787 (Ky. 2004) (quoting Lewis
v. Bledsoe Surface Min. Co., 798 S.W.2d 459, 461-62 (Ky. 1990) (citations
omitted and emphasis added)). See also Denzik v. Denzik, 197 S.W.3d 108, 110
(Ky. 2006). Similarly, an appellate court must affirm a trial court’s denial of a
motion for a judgment n.o.v. “‘unless there is a complete absence of proof on a
material issue in the action, or if no disputed issue of fact exists upon which
reasonable men could differ.’” Disabled Am. Veterans v. Crabb, 182 S.W.3d 541,
547 (Ky.App. 2005) (quoting Fister v. Commonwealth, 133 S.W.3d 480, 487
Here, the fire investigators indicated at trial that they were unable to
conclusively establish the cause of the fire or whether it was intentionally set.
However, markings found under a chair and desk were consistent with the use of
an accelerant, and testimony addressed whether motor oil found throughout the
premises might have been used as an accelerant. Moreover, a Kentucky State
Police fire investigator testified regarding the existence of “red flags” which may
be indicators of arson. Possible red flags below included evidence that the fire
occurred late at night, that the premises bore no signs of forcible entry, that Pinson
was involved in protracted bankruptcy proceedings, that Pinson indicated during
the bankruptcy proceedings that the store inventory was valued at $48,600 but
shortly thereafter he insured the inventory for $250,000, and that during the June
2004 forcible detainer trial Pinson insured the building for an additional $50,000.
We cannot say that the evidence was insufficient to support the jury’s finding that
“on or about November 5, 2004, Steve Pinson intentionally burned the building
owned by Bobby Thacker containing Nationwide Auto Parts[,]” or that the trial
court erred by denying Pinson’s motions for a directed verdict or judgment n.o.v.
Next, Pinson asserts that the trial court erred by admitting evidence of
his purchase of insurance coverage of the building’s contents. We disagree.
“Relevant evidence” is defined by KRE3 401 as meaning “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.” Relevant evidence generally is admissible, KRE 402,
although it “may be excluded if its probative value is substantially outweighed by
the danger of undue prejudice, confusion of the issues, or misleading the jury[.]”
KRE 403. KRE 411 in turn provides for the exclusion of evidence regarding
liability insurance coverage as follows:
Evidence that a person was or was not insured
against liability is not admissible upon the issue whether
the person acted negligently or otherwise wrongfully.
This rule does not require the exclusion of evidence of
insurance against liability when offered for another
purpose, such as proof of agency, ownership, or control,
or bias or prejudice of a witness.
Here, over Pinson’s objections the trial court admitted evidence of his
purchase of casualty insurance covering the contents of the building which later
burned. Clearly, such did not constitute evidence of “liability insurance” subject to
Kentucky Rules of Evidence.
exclusion under KRE 411. Instead, the evidence related to the existence of any
possible motivation for Pinson to destroy the business by fire in order to collect
casualty insurance proceeds which exceeded the actual value of the destroyed
property. We cannot say that the trial court erred by admitting such evidence.
Pinson also asserts that the trial court erred by admitting evidence
regarding a prior bankruptcy proceeding and the repossession of his truck. We
The videotape record shows that counsel for Thacker and Thacker
Auto (Thacker’s counsel) called Pinson as a witness and examined him regarding
the bankruptcy proceeding which he filed in December 2000, nearly four years
before the fire. Pinson’s counsel objected to the relevancy and prejudicial impact
of the line of questioning, but the court was persuaded that the inquiry was relevant
to demonstrate Pinson’s pattern of behavior and delays, including his failure to
satisfy his promissory note obligations despite claiming that he made $100,000 per
month through a trucking business. In response, Pinson described his efforts to
extricate himself from business with a partner, including the filing of a Chapter 13
Subsequently, Thacker’s counsel called to the stand a bank CEO who
testified regarding a foreclosure action which had been pending against Pinson for
some five years. Although Pinson’s counsel objected to the testimony’s relevancy,
the court agreed with Thacker’s counsel that Pinson earlier opened the door to the
questioning by initiating testimony about his ability to “use the system” to avoid a
Clearly, both lines of questioning were relevant to the jury’s
consideration of whether Pinson met his outstanding financial obligations. More
specifically, given Thacker’s denial of Pinson’s claim that he satisfied his lease and
promissory note obligations by improving the rental property and making a cash
payment, evidence regarding Pinson’s failure to satisfy other obligations during the
same time periods was relevant to the jury’s determination of his claimed ability to
satisfy the named obligations. The court did not err by admitting the evidence in
question. See Baker v. Kammerer, 187 S.W.3d 292, 295-96 (Ky. 2006).
Next, Pinson asserts that the trial court erred by awarding Thacker
prejudgment interest on the jury’s award of damages for the building’s destruction.
As recently stated in Univ. of Louisville v. RAM Eng’g & Constr., Inc., 199 S.W.3d
746, 748 (Ky.App. 2005),
[i]nterest can be both prejudgment and postjudgment.
When damages are “liquidated,” prejudgment interest
follows as a matter of course. When the amount is
“unliquidated,” the amount of prejudgment interest, if
any, is a matter for the trial court weighing the equitable
considerations. “[E]quity and justice demand that one
who uses money or property of another . . . should at
least pay interest for its use in the absence of some
agreement to the contrary.” “This principle applies
whether or not the amount owed to another is liquidated
(Internal citations omitted.) Here, the jury concluded that Pinson intentionally
burned Thacker’s building, and the record supports Thacker’s assertion that Pinson
intentionally delayed the trial. Under such circumstances, the trial court did not
abuse its discretion by awarding prejudgment interest on the damages awarded to
Thacker for the destruction of the building.
Finally, Pinson contends that the trial court erred in its award of
attorney’s fees to Thacker Auto. We disagree.
Pinson executed a promissory note and security agreement in favor of
Thacker Auto when he purchased the business’s collateral. According to the
terms, Pinson was obligated to pay attorney’s fees arising from any collection or
enforcement proceedings. As an award of attorney’s fees therefore became
payable as damages, see Cummings v. Covey, 229 S.W.3d 59, 61 (Ky.App. 2007),
it was proper for the trial court to award interest on such fees. See KRS 360.010;
Borden v. Martin, 765 S.W.2d 34, 35 (Ky.App. 1989).
Here, the trial court’s amended final judgment awarded Thacker Auto
$45,900 due on the promissory note, plus attorney’s fees, as follows:
[P]lus pre-Judgment [sic] interest compounded at the rate
of 8% per year from November 2003 until today’s date
[January 4, 2007], and then interest on that amount
($45,900.00 plus accrued interest) compounded at 12%
per year until that amount is paid in full. Thacker Auto
Parts, Inc., shall also recover from Steve Pinson attorney
fees pursuant to the note and security agreement in the
amount of $19,000.00.
Although Pinson does not specifically challenge Thacker Auto’s request for
attorney’s fees amounting to $15,300 or one-third of the $45,900 judgment, he
asserts that the court’s award of $19,000 exceeded the requested fee by $3,700.
However, as the award of attorney’s fees was payable as damages, Cummings, 229
S.W.3d at 61, and the addition of 8% annual interest to the base fee of $15,300
results in a figure in excess of $19,000, the court’s award of attorney’s fees and
interest is not excessive and shall not be set aside.
Next, in Cross-Appeal No. 2007-CA-000282-MR, Thacker contends
that the trial court erroneously reduced the jury’s award in his favor. We disagree.
The record shows that Farm Bureau was permitted to deposit into the
court the casualty insurance proceeds paid as a result of the damage to Thacker’s
building. In April 2006 the court determined that Thacker was entitled to the entire
$50,000 “paid for the destruction of the insured structure[.]” Subsequently, the
jury found that Thacker was entitled to damages of $100,000, representing the
difference in the property’s fair market value immediately before and after the fire.
The court’s initial award of $100,000 was amended to $50,000 since Thacker
already had received $50,000.
Thacker now argues that Pinson wrongfully benefited from the
insurance proceeds because his obligation to compensate Thacker was reduced by
half even though Pinson possessed no insurable interest in the property. However,
regardless of whether Pinson misrepresented his interest in the property when
purchasing the insurance and subsequently received the benefit of a reduction of
the judgment against him, that benefit was merely a consequence of the courtordered payment to Thacker of the actual insurance proceeds. In fact, the
insurance proceeds were treated as if Pinson had purchased coverage on behalf of
Thacker as a condition of the lease agreement. Given that the insurance coverage
was purchased by tortfeasor Pinson rather than by Thacker, and the record contains
no evidence that Thacker received benefits from collateral sources, we are not
persuaded by Thacker’s argument that the collateral source rule and principles of
subrogation as discussed in Schwartz v. Hasty, 175 S.W.3d 621, 626-27 (Ky.App.
2005), compel a different result.
Next, Thacker and Thacker Auto contend that the trial court erred by
awarding a share of the insurance proceeds as attorneys’ fees to Pinson’s attorneys,
James L. Hamilton and Larry D. Brown. We disagree.
KRS 376.460 provides:
Each attorney shall have a lien upon all claims, except
those of the state, put into his hands for suit or collection
or upon which suit has been instituted, for the amount of
any fee agreed upon by the parties or, in the absence of
such agreement, for a reasonable fee. If the action is
prosecuted to a recovery of money or property, the
attorney shall have a lien upon the judgment recovered,
legal costs excepted, for his fee. If the records show the
name of the attorney, the defendant shall be deemed to
have notice of the lien. If the parties in good faith and
before judgment compromise or settle their controversy
without the payment of money or other thing of value,
the attorney for the plaintiff shall have no claim against
the defendant for any part of his fee.
Here, the record shows that Hamilton and Brown were involved in the proceedings
which led to Farm Bureau’s tender of the insurance proceeds to the Pike County
Circuit Clerk. Although the proceeds were tendered prior to any court order to do
so, and Pinson never had access to them, the fact remains that Pinson benefitted
from Farm Bureau’s payment because the distributed proceeds ultimately satisfied
a portion of his obligations to creditors. Thus, we are not persuaded by Thacker
and Thacker Auto’s argument that Pinson recovered no judgment, and that his
attorneys therefore were not entitled to attorneys’ fees pursuant to KRS 376.460.
Moreover, we cannot say that the trial court abused its discretion by awarding
attorneys’ fees in accordance with a one-third contingency arrangement.
Next, Thacker and Thacker Auto contend that the trial court erred by
permitting attorney Brown to collect, on an agreed judgment, from the insurance
proceeds on deposit with the circuit court clerk. We disagree.
The record shows that Pinson, both individually and in his business
capacity, entered into an agreed judgment to pay Brown $20,000, plus costs and
prejudgment and postjudgment interest, for past-due attorney’s fees. The judgment
was entered by the Floyd Circuit Court4 in November 2005, and Brown
immediately issued a nonwage garnishment on the insurance proceeds held by the
Pike Circuit Court Clerk.
Despite Thacker and Thacker Auto’s allegations regarding the
legitimacy of Pinson’s claimed debt to Brown, the fact remains that the debt and
agreement were the subject of a judgment of the Floyd Circuit Court, and issues
regarding the legitimacy of the underlying claims were not properly before the
Pike Circuit Court in this proceeding. Further, although Thacker and Thacker
The cover page of Brown’s appellate brief indicates that his office is located in Prestonsburg,
which is in Floyd County. See KRS 81.010(4).
Auto assert that their judgment against Pinson should be afforded a higher payment
priority than Brown’s agreed judgment lien,
Kentucky’s rule [is] that an attorney’s lien relates
back to the time of the commencement of services, and
that an attorney’s lien takes precedence . . . . Further, . . .
the trial court’s right to set off one judgment against
another is equitable in nature, and thus, the trial court has
the power to determine the amount and manner of set-off.
Exch. Bank of Ky. v. Wells, 860 S.W.2d 785, 787 (Ky.App. 1993). Hence, the
court’s judgment shall not be disturbed.
Finally, attorneys Brown and Hamilton assert that the trial court erred
in several respects, including as to the determination of priorities for payment
among competing creditors, the award of attorney’s fees to Thacker’s counsel, the
jury instructions, and the exclusion of certain evidence. As neither Brown nor
Hamilton raised these issues by direct or cross-appeal, the issues are not properly
before this court and will not be considered in this appeal.
The Pike Circuit Court’s amended final judgment is affirmed.
BRIEFS FOR APPELLANT STEVE
Gordon B. Long
BRIEFS FOR APPELLEES
THACKER AUTO PARTS AND
Joseph W. Justice
BRIEF FOR APPELLEE JAMES L.
James L. Hamilton
BRIEF FOR APPELLEE LARRY D.
Larry D. Brown