THE INDEPENDENT ORDER OF FORESTERS V. HON. MCKAY CHAUVIN, JUDGE, JEFFERSON CIRCUIT COURT, ET AL
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THE INDEPENDENT ORDER OF FORESTERS
APPELLANT
APPEAL FROM COURT OF APPEALS
2004-CA-002682
JEFFERSON CIRCUIT COURT
NO . 01-CI-06761
V.
HON. MCKAY CHAUVIN, JUDGE,
JEFFERSON CIRCUIT COURT
APPELLEE
AND
FOREST RICHARD POPE
REAL PARTY IN INTEREST
OPINION OF THE COURT BY JUSTICE ROACH
AFFIRMING
In an original action in the Court of Appeals, Appellant, the Independent Order of
Foresters ("Foresters"), sought a writ of prohibition against the circuit court on the
grounds that Forest Richard Pope's claims were barred by res iudicata . The Court of
Appeals denied the petition, finding that Foresters had failed to carry its burden of proof.
On appeal, Foresters repeats its claim that Pope's cause of action is barred by res
judicata . Because Foresters has failed to show that its claim is such that the
extraordinary remedy of writ is even available, we affirm the Court of Appeals.
I. FACTUAL BACKGROUND
Foresters is a fraternal benefit society that sells life and health insurance to its
members . In 1989, Forest Richard Pope purchased a universal life insurance policy
from Foresters . The insurance policy included a child term rider that would pay the
policyholder $10,000 upon the death of the covered child. Pope's daughter was the
covered child under his policy. She died in 2000 at the age of 26 . Pope filed a claim
under the child term rider later that year, and Foresters denied it as not being in effect at
the time of the daughter's death .
In 2001, Forest Richard Pope sued Foresters in the Jefferson Circuit Court over
the child term rider of his insurance policy. Specifically, Pope alleged that he had
purchased the child term rider and paid its annual premiums with the understanding that
it would be effective until he turned 65.' This belief was based on the fact that the
annual billing statements Pope received from Foresters listed February 2, 2009 (when
Pope will be 65) as the termination date of the child term rider.
Foresters, however, claimed that coverage under the child term rider terminated
at the earlier of the policyholder turning 65 or the policyholder's child turning 25 .
Foresters's interpretation was based on the following language in the rider: "[A] child will
cease to be an Insured Child on the earlier of the child's 25th birthday or the
anniversary of the date of issue of the certificate nearest the member's 65th birthday ."
Foresters claims that coverage lapsed when Pope's daughter turned 25 on July 3, 1998 .
However, Foresters continued to bill Pope and he continued to pay for the child term
rider after his daughter turned 25 .
Pope discovered the difference between his interpretation and Foresters's only
when Foresters refused to pay the claim he filed in 2000. Foresters also refused to
The allegations are taken from Pope's Second Amended Complaint. Because
the litigation leading to the filing of the Second Amended Complaint was lengthy and
complex, we will discuss it only when necessary to understand the current issues .
repay the premiums that Pope had paid after his daughter turned 25 . Based on these
facts, Pope alleged in his complaint that Foresters had engaged in the practice of
charging premiums when it knew or should have known that no benefit would inure to
policyholders because their insured children had reached the age of 25. His complaint
specifically claimed breach of contract, rescission, unjust enrichment, and negligent
misrepresentation. He also sought to have the case certified as a class action, claiming
that thousands of other people were similarly situated.
The insurance policy on which Pope based his lawsuit had previously been the
subject of a nationwide class action lawsuit. That suit, which focused on Foresters's
sales practices, was settled, and the Federal District Court for the District of New Jersey
entered a Final Order and Judgment. See Roy v. Independent Order of Foresters , No.
97-CV-6225 (JCL), Final Order and Judgment (D.N.J. Aug. 3, 1999) [hereinafter Final
Order and Judgment] .
Foresters moved the trial court to dismiss Pope's claim as barred by res judicata
because issues related to the child term rider, as part of the insurance policy in Roy,
had already been decided by the Roy settlement. Foresters cited specifically to
language in the Final Order and Judgment that gives it preclusive, res 'tudicata effect
over future claims based on the conduct involved in the Roy lawsuit . The trial court
denied Foresters's motion, refusing to give the Roy Final Judgment and Order res
'udicata effect on Pope's claims . Specifically, the trial court held that Pope's current
claims were distinct from those covered by the Final Order and Judgment because the
Roy litigation "involved a point-of-sale fraud," whereas Pope's claims were based on
allegations of "fraud . . . after the purchase of the policy."
Rather than proceeding with discovery regarding Pope's claims, Foresters
initiated an original action in the Court of Appeals by filing a petition for a writ of
prohibition against the trial court on the alternative grounds that the circuit court was
proceeding without jurisdiction or that Foresters would suffer great injustice and
irreparable injury. Both grounds were based on Foresters's assertion that Pope's
underlying cause of action was barred by res judicata. The Court of Appeals denied the
petition, noting simply the following :
The argument that Foresters makes in this original
action fails to satisfy this Court that the respondent trial court
is proceeding without jurisdiction . Further, in order to show
entitlement to a review of the merits of its alternate
argument, Foresters was required to demonstrate the . . .
prerequisites of lack of an adequate remedy by appeal or
otherwise and great injustice and irreparable injury . It is
clear to the Court that Foresters did not carry that burden.
Foresters now appeals to this Court as a matter of right. See Ky. Const. § 115 ("In all
cases, civil and criminal, there shall be allowed as a matter of right at least one appeal
to another court."); CR 76.36(7)(a) ("An appeal may be taken to the Supreme Court as a
matter of right from a judgment or final order in any proceeding originating in the Court
of Appeals.") .
II. ANALYSIS
The writ of prohibition is such an "extraordinary remedy"that Kentucky courts
"have always been cautious and conservative both in entertaining petitions for and in
granting such relief." Bender v. Eaton, 343 S .W .2d 799, 800 (Ky. 1961) . We have
divided writ cases into "two classes," which are distinguished by "whether the inferior
court allegedly is (1) acting without jurisdiction (which includes `beyond its jurisdiction'),
or (2) acting erroneously within its jurisdiction ." We have also delineated a third "class"
of writ cases (in essence, a subclass of the "acting erroneously" class) : the so-called
"certain special cases ." Id. at 801 . Foresters claims it is entitled to a writ of prohibition
under all three of the writ categories we have identified . Because the requirements for a
writ under each class are different, we discuss Foresters's claim under each separately .
A . Acting Without Jurisdiction
We recently announced the following standard as to the granting of writs when
the lower court is allegedly acting without jurisdiction : "A writ of prohibition may be
granted upon a showing that . . . the lower court is proceeding or is about to proceed
outside of its jurisdiction and there is no remedy through an application to an
intermediate court . . . ." Hoskins v. Maricle, 150 S .W.3d 1, 10 (Ky. 2004) .
Foresters claims that the trial court is proceeding outside its jurisdiction because Pope's
action is barred by res iudicata. Foresters cites three cases-Slone v. R & S Mining,
Inc. , 74 S .W .3d 259 (Ky. 2002); Potter v. Eli Lilly and Co. , 926 S.W.2d 449 (Ky. 1996) ;
and Stephens v. Goodenough, 560 S .W .2d 556 (Ky. 1977)-in support of its contention .
Foresters has mischaracterized these cases . In Slone, we held that a dismissed
workers' compensation claim cannot be reopened based solely on "evidence of a
change of medical condition ." 74 S.W.3d at 262. While Slone was based in part on res
'udI
icata , it does not stand for the blanket proposition that res iudicata removes
jurisdiction over a later, other claim . Even assuming that Slone is applicable outside the
limited context of the workers' compensation statutory scheme, it only prohibits the
reopening of the specific denial of an award .
Foresters's citation to Potter and Stephens is even less compelling . While
Foresters correctly notes that Potter involved the appeal of a writ issued because the
Court of Appeals felt that the circuit court had "lost jurisdiction to reopen the judgment,"
926 S.W .2d at 452, it fails to note that we reversed the Court of Appeals and dissolved
the writ in that case. But even if the Court of Appeals had been correct, its writ was
premised on the claim that the circuit court had lost jurisdiction because the judgment
had become final, not because of the res judicata effect of the judgment. More
importantly, Potter contains no discussion of res iudicata . Stephens stands merely for
the proposition that a ruling on a petition for a writ of prohibition can have res judicata
effect on a subsequent petition, not that it strips the court of jurisdiction to consider the
subsequent petition .
As we have repeatedly recognized, "the rule of res judicata is an affirmative
defense . . . ." Yeoman v. Commonwealth, Health Policy Bd . , 983 S .W.2d 459 (Ky.
1998); see also CR 8.03 ("In pleading to a preceding pleading, a party shall set forth
affirmatively . . . res judicata . . . and any other matter constituting an avoidance or
affirmative defense ."). And as an affirmative defense, res judicata can be waived . See,
e .g ., Old Line Life Ins . Co . of America v. Garcia, 418 F.3d 546, 550 (6th Cir. 2005) ("As
a general rule, failure to plead an affirmative defense results in a waiver of that
defense."). This alone indicates that res*udicata has no jurisdictional dimension.
As applied to petitions for writs, the Ohio Supreme Court has articulated the
controlling principle succintly: "[R]es judicata is an affirmative defense which does not
divest the jurisdiction of the second tribunal to decide the validity of that defense."
Whitehall ex rel . Wolfe v . Ohio Civ. Rights Comm. , 656 N .E.2d 684, 687 (Ohio 1995) ;
see also 63C Am. Jur. 2d, Prohibition § 65 (1997) ("The fact that the defense of res
judicata based on a decision in a former action is available in a second action involving
the same issues does not deprive the court in which the second action is brought of
jurisdiction to try the case again, so as to warrant the issuance of a writ of prohibition ;
the aggrieved party's remedy is to set up the res judicata plea as a defense in that suit
and to appeal from an adverse decision ."). As such, Foresters's claim that the Roy
Final Judgment and Order has res iudicata effect on Pope's current cause of action is
insufficient to warrant the remedy of a writ of prohibition under the jurisdictional
category.
B . Acting Erroneously
We recently announced the following standard as to the granting of writs in cases
where the trial court is alleged merely to be acting erroneously :
A writ of prohibition may be granted upon a showing
. . . that the lower court is acting or is about to act
erroneously, although within its jurisdiction, and there exists
no adequate remedy by appeal or otherwise and great
injustice and irreparable injury will result if the petition is not
granted .
Hoskins v. Maricle , 150 S .W .3d 1, 10 (Ky. 2004); see also Bender, 343 S.W.2d at 801
("In the second class of cases relief ordinarily has not been granted unless the petitioner
established, as conditions precedent, that he (a) had no adequate remedy by appeal or
otherwise, and (b) would suffer great and irreparable injury (if error has been committed
and relief denied ." (first emphasis added)) .
"No adequate remedy by appeal" means that any injury to Appellants "could not
thereafter be rectified in subsequent proceedings in the case." Bender , 343 S .W .2d at
802. Lack of an adequate remedy by appeal is an absolute prerequisite to the issuance
of a writ under this second category . Id. at 801 . ("Our cases involving controversies in
this second class, where it is alleged the lower court is acting or proceeding erroneously
within its jurisdiction, have consistently (apparently without exception ) required the
petitioner to pass the first test ; i.e., he must show he has no adequate remedy by
appeal or otherwise ." (emphasis added)) .
Foresters asserts that it has no adequate remedy by appeal because "[a]ny right
to appeal . . . after full trial on the merits is necessarily an inadequate remedy." That
Foresters faces the costs of litigation absent our ordering the Court of Appeals to grant
the writ simply is not enough to show inadequate remedy by appeal : "The alleged
irreparable injury is the expense to be incurred in defending in the circuit court.
Petitioners are in no different position from any other defendant who is put to the
expense of contesting a claim . We do not find the aspect of injustice here which is
necessary for prohibition . The remedy of appeal appears to us to be adequate." Brown
v. Knuckles, 413 S .W .2d 899, 901 (Ky. 1967) (citations omitted, emphasis added) ; see
also Fritsch v. Caudill , 146 S.W.3d 926 (Ky. 2004) (holding that the possibility of trying
case in the wrong venue did not present inadequate remedy by appeal because "[i]f
appellants are correct that the Floyd Circuit Court is an improper venue for appellee's
civil action, in due course, the trial court or an appellate court will so recognize and relief
in the nature of dismissal for improper venue will be granted"); Garrard County Bd. of
Educ . v. Jackson , 12 S .W .3d 686, 689 (Ky. 2000) (holding "the appellants have not
demonstrated that an erroneous class certification . . . would prejudice them in a
manner which the courts cannot address on appeal") .
Foresters attempts to avoid the effect of these cases by arguing that because of
the large cost involved in defending a nationwide class action a second time, its remedy
by appeal in this case, as opposed to the other less complex litigation we have
previously addressed, is inadequate . We have previously rejected just such an
argument:
In effect, we are invited to apply a different standard to big
cases than we would apply to more modest cases. The
unfairness and unworkability of such a practice is evident
and needs no further comment.
. . Our case law is sufficient to permit relief in truly
extraordinary situations . We are unwilling to undermine the
.
authority of trial courts by opening the appellate door via
extraordinary writs to every party claiming error during pretrial proceedings and trial .
National Gypsum Co. v. Corns, 736 S .W .2d 325, 327 (Ky. 1987) (emphasis added); see
also Fayette County Farm Bureau Fed'n v. Martin , 758 S .W.2d 713, 714 (Ky.App . 1988)
("That a party will be exposed to the inconvenience and cost of litigation does not alone
justify immediate review of an otherwise nonfinal order.").
In making this argument, Foresters fails to acknowledge one of the fundamental
aspects of writs as remedies: they are truly extraordinary in nature and are reserved
exclusively for those situations where litigants will be subjected to substantial injustice if
they are required to proceed. This is why the bar is set so high-in the form of the
"conditions precedent" for the mere availability of a writ as a possible remedy-for an
appellate court even to reach the question of whether the lower court has committed
error. Ultimately, however, we conclude that the remedy of a writ of prohibition is not
available to Foresters because its remedy by appeal is adequate.
Finally, we note that though our cases have attempted to treat the adequacy of
the remedy by appeal and the existence of great and irreparable harm as separate
issues, see Bender, 343 S.W.2d at 801 ("so far as possible tests (a) and (b) should be
considered separately"), the focus of the latter on irreparability has led to some
inevitable overlap in some of our cases . But on this issue, we have expressly held that
being forced to bear the cost of defending a lawsuit simply does not rise to the level of
great and irreparable injury :
By this proceeding, petitioners are attempting a
premature appeal and seeking a precipitate decision of this
Court on an interlocutory order. It takes a minimum of
imagination to envision the utter confusion and chaos in the
trial of cases if this Court should entertain original
proceedings in cases of this character. The basis urged for
so doing is the financial distress of litigants. This is not an
uncommon status, however unwanted it may be, and is not
confined to litigants . Thus, the delay incident to litigation and
appeal by litigants who may be financially distressed cannot
be considered as unjust, does not constitute irreparable
inLurys and is not a miscarriage_ ofjustice .
Ison v. Bradley, 333 S.W.2d 784, 786 (Ky. 1960) (emphasis added) ; see also Fritsch ,
146 S.W.3d at 930 ("As to great and irreparable injury, we see none. Inconvenience,
expense, annoyance, and other undesirable aspects of litigation may be present, but
great and irreparable injury is not."); Schaetzley v. Wright, 271 S .W.2d 885, 886-87 (Ky.
1954) ("We are inclined to think that a misunderstanding of the law may have arisen as
a result of the frequent reference, in opinions of this Court, to `great and irreparable
injury' as being one of the prerequisites to the issuance of an order of prohibition . An
impression has arisen that the mere loss of valuable rights or property through an error
of the court constitutes great and irreparable injury entitling the loser automatically to
relief from the error. However, a careful analysis of the cases dealing with the
supervisory power of the Court of Appeals under Section 110 of the Kentucky
Constitution will disclose that in addition to the element of great and irreparable injury
there must be some aspect of injustice . There must be something in the nature of
usurpation or abuse of power by the lower court, such as to demand that the Court of
Appeals step in to maintain a proper control over the lower court. The object of the
supervisory power of the Court of Appeals is to prevent miscarriage of justice ." (citations
omitted)). Thus, Foresters has also failed to show great and irreparable injury.
C. Certain Special Cases
The usual requirement that a petitioner show great and irreparable injury,
however, "is not an absolute prerequisite" to the issuance of a writ. Bender, 343 S .W.2d
-10-
at 801 . As noted above, we have carved out a limited exception to this requirement for
"certain special cases." But the exception is very limited :
[I]n certain special cases this Court will entertain a petition
for prohibition in the absence of a showing of specific great
and irreparable injury to the petitioner, provided a substantial
miscarriage of justice will result if the lower court is
proceeding erroneously, and correction of the error is
necessary and appropriate in the interest of orderly judicial
administration.
Bender , 343 S .W .2d at 801 . We have tended to apply this exception only in those
limited situations where the action for which the writ is sought would blatantly violate the
law, for example, by breaching a tightly guarded privilege or by contradicting the clear
requirements of a civil rule . See Wal-Mart Stores, Inc . v. Dickinson , 29 S.W .3d 796, 803
(Ky. 2000) (noting that deposing an attorney or paralegal involved in the case would
normally fall under the "certain special cases" exception because of the attorney-client
privilege); id . at 801-02 (noting that a judge's failure to include findings of fact as
required by CR 34 .01 in a premises inspection order met the exception); Bender, 343
S .W.2d at 803 (holding that a judge's order for production of a doctor's report was a
violation of the then recently enacted Civil Rules and thus fell under the exception).
Fortunately, we need not wade into the quagmire of determining whether
Foresters's claim meets the unique requirements of the "certain special cases" .
exception . This is because the exception allows a petitioner to avoid only the
requirement of great and irreparable injury, not the requirement of lack of an adequate
remedy by appeal . Bender, 343 S.W.2d at 801 . As discussed above, Foresters has an
adequate remedy by appeal, thus it cannot claim the protection of the "certain special
cases" exception .
III. CONCLUSION
We need not reach the merits of Foresters's res judicata claim because it has
failed even to establish that the remedy of a writ of prohibition is available, much less
that the Court of Appeals abused its discretion in denying the petition. Therefore, we
affirm the Court of Appeals.
All concur.
COUNSEL FOR APPELLANT :
Joseph L . Hamilton
Stites & Harbison
400 West Market Street
Suite 1800
Louisville, Kentucky 40202-3352
Marjorie Farris
Stites & Harbison
400 West Market Street
Suite 1800
Louisville, Kentucky 40202-3352
Allison E. Jones
Stites & Harbison
400 West Market Street
Suite 1800
Louisville, Kentucky 40202-3352
APPELLEE :
Hon. McKay Chauvin
Judge, Jefferson Circuit Court
9th Floor, Judicial Center
700 West Jefferson Street
Louisville, Kentucky 40202
COUNSEL FOR REAL PARTY IN INTEREST :
Kenneth H. Baker
1500 Kentucky Home Life Building
239 South Fifth Street
Louisville, Kentucky 40202
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