TEST (JOHN), ET AL. VS. EXPRESSBILL, LLC
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RENDERED: OCTOBER 16, 2009; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2008-CA-000088-MR
AND
NO. 2008-CA-000210-MR
JOHN TEST; AND PROFESSIONAL
ACCOUNTING SYSTEMS, INC.
v.
APPELLANTS
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE MITCH PERRY, JUDGE
ACTION NO. 02-CI-002493
EXPRESSBILL, LLC, A
WHOLLY-OWNED
SUBSIDIARY OF EMDEON
CORPORATION D/B/A
EXPRESSBILL
APPELLEE
OPINION
AFFIRMING APPEAL NO. NO. 2008-CA-000088-MR
AND AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
WITH DIRECTIONS APPEAL NO. 2008-CA-000210-MR
** ** ** ** **
BEFORE: COMBS, CHIEF JUDGE; NICKELL AND TAYLOR, JUDGES.
TAYLOR, JUDGE: John Test and Professional Accountings Systems, Inc., bring
Appeal No. 2008-CA-000088-MR from a December 12, 2007, judgment of the
Jefferson Circuit Court and bring Appeal No. 2008-CA-000210-MR from a
January 23, 2008, order of the Jefferson Circuit Court. We affirm Appeal No.
2008-CA-000088-MR, and we affirm in part, reverse in part, and remand with
directions Appeal No. 2008-CA-000210-MR.
These appeals stem from a breach of contract action filed by John Test
and Professional Accounting Systems, Inc. (collectively referred to as appellants)
against ExpressBill. John Test is the owner of a business called Professional
Accounting Systems Company (PASCO), which provides billing services to
healthcare providers. ExpressBill is a medical billing service provider.
Appellants claimed that ExpressBill breached an exclusive territory
agreement wherein PASCO was the exclusive provider of medical billing services
supplied by ExpressBill. Appellants alleged that ExpressBill was supplying its
medical billing services to other providers within the exclusive geographical area.
Appellants sought damages against ExpressBill for breach of the exclusive
territory agreement.
ExpressBill, however, denied the existence of a current exclusive
territory agreement with PASCO. Instead, ExpressBill acknowledged a 1982
exclusive territory agreement with PASCO concerning its microfilm billing
service. Upon the development of advanced technologies, ExpressBill pointed out
that its microfilm billing service was eventually discontinued and replaced in toto
with its ExpressBill electronic data transfer service (electronic transfer service).
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ExpressBill maintained that its exclusive territory agreement with PASCO only
involved its microfilm billing service and not its electronic transfer service.
Consequently, ExpressBill claimed that it breached no exclusivity contract with
appellants by supplying its electronic transfer service to others within the disputed
geographical area.
A jury trial was held, and the jury returned a verdict in favor of
ExpressBill. The jury found that an exclusive territory agreement existed only as
to the microfilm billing service and that no exclusive territory agreement existed as
to the electronic transfer service. By a December 12, 2007, judgment, the circuit
court dismissed appellants’ action against ExpressBill. Appellants then filed a
notice of appeal from the December 12, 2007, judgment (Appeal No. 2008-CA000088-MR). Later, by order entered January 23, 2008, the circuit court awarded
ExpressBill costs in the amount of $11,741.01. Appellants also filed a notice of
appeal from the January 23, 2008, order (Appeal No. 2008-CA-000210-MR). We
shall review these appeals seriatim.
APPEAL NO. 2008-CA-000088-MR
Appellants initially argue that the instructions submitted to the jury
were erroneous. Specifically, appellants contend that the jury instructions “were
overly detailed, contained an excessive number of special interrogatories to the
jury, and significantly complicated the jury’s deliberations.” Appellants’ Brief at
11. Appellants complain that the jury instructions “went far beyond the ‘bare
bones’ instructions consistent with Kentucky law.” Appellants’ Brief at 12.
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Jury instructions should only be based upon the evidence introduced
at trial and should properly set forth the law. Howard v. Com., 618 S.W.2d 177
(Ky. 1981). In so doing, the instructions should reflect the “bare bones” approach
as established in this Commonwealth. Cox v. Cooper, 510 S.W.2d 530 (Ky. 1974).
This approach requires that jury instructions simply inform the jury of the evidence
necessary to decide the dispositive factual issues and to provide enough
information to inform the jury of the parties’ respective legal duties. Harp v.
Com., 266 S.W.3d 813 (Ky. 2008)(citing Olfice, Inc. v. Wilkey, 173 S.W.3d 226
(Ky. 2005)). As errors involving jury instructions present questions of law, our
review proceeds de novo. Reece v. Dixie Warehouse and Cartage Co., 188 S.W.3d
440 (Ky. App. 2006).
In this case, appellants do not claim that the jury instructions failed to
conform to the law or that the jury instructions failed to conform to the evidence.
Instead, appellants simply allege that the jury instructions were overly detailed and
did not conform with the “bare bones” approach.
Upon review of the jury instructions submitted by the trial court, we
are unable to conclude that these instructions were so overly detailed or
complicated as to constitute error. Rather, the jury instructions properly stated the
law and accurately reflected the evidence submitted at trial. In fact, the jury
instructions were readily intelligible and presented understandable questions to the
jury. While Kentucky has adopted the “bare bones” approach, jury instructions
“must not be so bare bones as to be misleading or misstate the law.” Harp, 266
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S.W.3d at 819 (citing Olfice, Inc. v. Wilkey, 173 S.W.3d 226 (Ky. 2005)).
Considering the legal and factual issues presented, we simply cannot say that the
instructions were improper as being too detailed or complicated. As such, we
perceive no error. See Bartlett v. Vanover, 260 Ky. 839, 86 S.W.2d 1020 (Ky.
1935).
Appellants next assert that the trial court erroneously excluded the
testimony of Russell Scott. Scott was a provider of ExpressBill services in Ohio
and would have testified as to an exclusive territory agreement with ExpressBill.
Appellants maintain that the trial court erroneously excluded Scott’s testimony as
irrelevant. We disagree.
As an appellate court, we review the exclusion of evidence under the
abuse of discretion standard. Clephas v. Garlock, Inc., 168 S.W.3d 389 (Ky. App.
2004). An abuse of discretion occurs when the trial court’s ruling is “arbitrary,
unreasonable, unfair, or unsupported by sound legal principles.” Goodyear Tire
and Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky. 2000). If the trial court
abused its discretion, we then determine whether such abuse amounted to
prejudicial or reversible error. To constitute prejudicial or reversible error, it must
be demonstrated that absent the exclusion of the evidence, there exists a reasonable
possibility the jury verdict would have been different. Kentucky Rules of Civil
Procedure (CR) 61.01; Kentucky Rules of Evidence (KRE) 103; Crane v. Com.,
726 S.W.2d 302 (Ky. 1987).
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In this case, appellants neither argue nor prove that exclusion of
Scott’s testimony was prejudicial. CR 61.01; KRE 103. Instead, appellants merely
argue that the exclusion of such testimony amounted to an abuse of discretion by
the trial court. It is axiomatic that a trial court’s improper exclusion of evidence
will only require reversal if the error is shown to be prejudicial. Appellants’ failure
to even argue such prejudicial effect necessarily precludes an adjudication of
reversible error.
Nevertheless, from our review of the record in this case, there does
not exist a reasonable possibility the verdict would have been different absent the
exclusion of such testimony. See Crane v. Com., 726 S.W.2d 302. The jury heard
ample evidence from both appellants and ExpressBill concerning the existence and
alleged breach of the exclusive territory agreement. The jury simply chose to
believe ExpressBill. Upon the whole, we are unable to conclude that the trial court
committed reversible error by excluding Scott’s testimony.
Appellants also argue that the trial court “committed reversible error
in sending out [the] jury to begin its deliberations late in the day.” Appellants’
Brief at 14. Appellants maintain that the trial court “placed undue pressure on the
jury by having it begin . . . deliberations late in the day.” Appellants’ Brief at 16.
Additionally, appellants believe that the trial court erroneously “told the jury to
either decide the case in under two hours or . . . return the next day for additional
deliberations.” Appellants’ Brief at 17.
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In the case sub judice, the record reveals that the jury began
deliberations at 5:10 p.m. Shortly before, the trial court made the following
statement to the jury:
We have had a long effort today to resolve certain
matters of law and now I am about to instruct you on
what it is that I am going to ask the jury to decide. We
may or may not finish today, but I want to hear the
closing and ask you to deliberate for a while. We won’t
go very late into the evening. We will take that up later.
Sometime thereafter, the jury submitted a question to the trial court. After bringing
the jury back into the courtroom, the trial court informed the jury that the question
could not be answered. Also, the trial court stated that the jury could continue to
deliberate or retire for the evening. The court also informed the jury that dinner
could be delivered but it usually took forty-five minutes. This occurred at 6:45
p.m. At 7:21 p.m., the jury returned a verdict.
To begin, appellants fail to cite this Court to any Kentucky authority
to support this argument. We were, however, pointed to a Pennsylvania case,
albeit with an erroneous legal citation. Having reviewed the entire record
including the trial proceedings, we cannot conclude that the trial court abused its
discretion regarding the jury’s deliberations. See Goodyear Tire, 11 S.W.3d 575.
The jury neither deliberated an extraordinarily long period of time nor deliberated
until an unreasonably late hour. Likewise, we cannot conclude that the trial court
improperly coerced the jury to return a verdict. See Boggs, v. Com., 424 S.W.2d
806 (Ky. 1966). We, thus, view this contention to be without merit.
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Appellant finally asserts that the trial court “applied an incomplete
and inaccurate measure of damages.” Considering our resolution heretofore of this
appeal and given that the jury never reached the damage issue, we view this
argument as moot.
APPEAL NO. 2008-CA-000210-MR
Appellants argue that the trial court erred by ordering them to pay
ExpressBill costs in the amount of $11,741.01. In the bill of costs, ExpressBill
specifically claimed $4,450.70 in deposition costs, $3,944.73 in trial witness costs,
$816.90 in trial exhibit costs, $2,225.35 in copy costs, and $303.33 in mediation
fees.
In this case, we recognize that an award of costs is controlled by both
Civil Rule and statute – CR 54.04, KRS 453.040, and KRS 453.050. CR54.04
provides:
(1) Costs shall be allowed as of course to the prevailing
party unless the court otherwise directs; but costs against
the Commonwealth, its officers and agencies shall be
imposed only to the extent permitted by law. In the event
of a partial judgment or a judgment in which neither
party prevails entirely against the other, costs shall be
borne as directed by the trial court.
(2) A party entitled to recover costs shall prepare and
serve upon the party liable therefor a bill itemizing the
costs incurred by him in the action, including filing fees,
fees incident to service of process and summoning of
witnesses, jury fees, warning order attorney, and
guardian ad litem fees, costs of the originals of any
depositions (whether taken stenographically or by other
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than stenographic means), fees for extraordinary services
ordered to be paid by the court, and such other costs as
are ordinarily recoverable by the successful party. If
within five days after such service no exceptions to the
bill are served on the prevailing party, the clerk shall
endorse on the face of the judgment the total amount of
costs recoverable as a part of the judgment. Exceptions
shall be heard and resolved by the trial court in the form
of a supplemental judgment.
KRS 453.040(1)(a) reads:
The successful party in any action shall recover his costs,
unless otherwise provided by law. If the plaintiff
succeeds against part of the defendants, and not against
others, he shall recover his costs from the former, and the
latter shall recover their costs from the plaintiff.
And, KRS 453.050 states:
Clerks shall tax one (1) attorney's fee only in the bill of
costs of the successful party at the termination of the
action, but no attorney's fee shall be taxed in any court if
the amount in controversy, exclusive of interest and
costs, does not exceed fifty dollars ($50), and no
garnishee shall be allowed an attorney's fee. The bill of
costs of the successful party shall include, in addition to
other costs taxed, the tax on law process and official
seals, all fees of officers with which the party is
chargeable in the case, postage on depositions, the cost of
copy of any pleading or exhibit obtained, the cost of any
copies made exhibits and the allowance to witnesses,
which the court may by order confine to not more than
two (2) witnesses to any one (1) point.
Ordinarily, the prevailing party in a civil action is entitled to an award
of costs. In this Commonwealth, allowable costs are generally more circumscribed
than that allowed in other jurisdictions. 7 Kurt A. Philipps, Jr. & David V.
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Kramer, Kentucky Practice – Rules of Civil Procedure Annotated § 54.04 (6th ed.
2005).
Upon review of ExpressBill’s bill of costs, we think it was error to
award ExpressBill all costs claimed therein. In particular, ExpressBill was entitled
to recover “costs of the originals of any depositions” but was not entitled to
recover any costs associated with procuring copies of the original depositions. CR
54.04. We believe this rule is mandated by the unambiguous language of CR
54.04. Accordingly, ExpressBill is entitled to recover the costs of the original
depositions only.
Additionally, ExpressBill claimed $2,225.35 in copying costs. The
itemization of these copying costs submitted by ExpressBill is wholly deficient. It
fails to specify what these copying costs were for and fails to afford any basis for
such determination by the trial court. We, thus, conclude it was error to award
ExpressBill $2,225.35 in copying costs.
As to ExpressBill’s claimed costs related to mediation fees, we do not
think such are properly taxed as costs. Rather, it seems the better policy and matter
of local practice to equally divide such mediation fees between the parties.1
ExpressBill also claimed $3,944.73 as trial witness costs. It appears
from the record that these costs consisted of hotel, meal, taxi, and airfare expenses
for the witnesses. While KRS 453.050 specifically authorizes an “allowance to
witnesses” to be taxed as costs, we do not believe such an allowance properly
1
We refer to the local rules of the Thirteenth Judicial Circuit, specifically Jefferson Rules of
Practice 1306.
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consisted of the claimed witnesses’ expenses submitted by ExpressBill. These
witnesses’ expenses incurred in conjunction with their testimony in this action
should be wholly ExpressBill’s responsibility.
In sum, we reverse the trial court’s award of costs as particularly set
forth herein and affirm in all other respects. Upon remand, we direct the trial court
to recalculate its award of costs in conformity with this opinion.
For the foregoing reasons, the December 12, 2007, judgment of the
Jefferson Circuit Court in Appeal No. 2008-CA-000088-MR is affirmed and the
January 23, 2008, order of the Jefferson Circuit Court in Appeal No. 2008-CA000210-MR is affirmed in part, reversed in part, and remanded with directions to
render an award of costs in conformity with this opinion.
ALL CONCUR.
BRIEFS FOR APPELLANTS:
BRIEFS FOR APPELLEE:
Peter L. Ostermiller
Louisville, Kentucky
Charles J. Cronan IV
Margaret R. Grant
Louisville, Kentucky
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