author: STEPHENSON, Justice.

text:
    Evelyn M. SEATON and Eugene S. Seaton, Movants, v. Theodore ROSENBERG, Respondent.
    Supreme Court of Kentucky.
    Oct. 31, 1978.
    Rehearing Denied Dec. 19, 1978.

      Charles A. Williams, Williams, Housman & Sparks, Paducah, Eldred, Paxton & Terry, Princeton, for movants.
    Henry 0. Whitlow, Threlkeld, Whitlow & Roberts, Paducah, for respondent.
   STEPHENSON, Justice.

The questions presented on this appeal are the propriety of remarks of the trial court on the testimony of the medical expert testifying for the movant and the ruling on hypothetical questions propounded to the medical expert. The trial court entered judgment on a jury verdict for the respondent, Dr. Theodore Rosenberg, and the Court of Appeals affirmed. We granted discretionary review and reverse for a new trial.

Evelyn Seaton, a 49-year-old registered nurse in normal physical condition, was the patient undergoing a surgical procedure for a gallbladder condition. Dr. Theodore Rosenberg was the anesthesiologist. The surgical procedure commenced about 8 a. m. Two or two and one-half hours afterwards and at a time the procedure was almost completed, the surgical assistant who had her hand against the aorta told the surgeon she did not feel a pulse. At about the same time, Dr. Rosenberg also advised the surgeon that he did not feel a pulse. The surgeon (by discovery deposition) testified he placed his hand on the heart and did not feel a beat. Emergency procedures were then undertaken with Dr. Rosenberg ventilating and administering pure oxygen, drugs, etc. from a cardiac arrest kit to stimulate the heart and restore normal blood pressure. The surgeon massaged the heart internally through the diaphragm, and another doctor massaged the heart externally. According to the surgeon, the heart responded almost immediately and quickly resumed normal beat. From one set of notes he estimated one and one-half to two minutes had elapsed. From notes he made later, he estimated two to three minutes. Understandably he could not fix an exact time. Dr. Rosenberg (by discovery deposition) testified that the time lapse before the heart resumed beating regularly was two minutes. The nurse’s notes showed cardiac arrest at 10:25 a. m., resumption of normal beat at 10:30 a. m. Later it developed that as a result of lack of oxygen going to the brain, Evelyn Seaton suffered permanent brain damage leaving her partially blind, spastic and unable to care for herself. There is no claim the surgeon acted other than in accordance with the proper standard of care throughout the surgical procedure and emergency measures that followed. The surgeon testified that everything was normal from his viewpoint until notified that there was no pulse.

Dr. Rosenberg testified that Evelyn Sea-ton’s brain damage resulted from a lack of oxygen due to the cardiac arrest and that according to medical literature if the brain is deprived of oxygen for a period of four to six minutes brain damage results. The surgeon declined to be unequivocal on this point, testifying that depending on the individual a shorter or longer period of time would be required.

According to the medical testimony there is always the danger of cardiac arrest (the heart stops beating) with the use of anesthetic agents such as were used in this procedure. This always present danger requires careful observation and monitoring of the gases used, pulse, blood pressure and use of a “bag” to ventilate, all of this is the responsibility of the anesthesiologist.

Dr. Rosenberg testified that during the course of the operation he checked the blood pressure at least every five minutes and the pulse at least every two minutes and at the same time kept one hand on the “bag” to assist in breathing.

He further testified that as a part of his regular duties he kept a chart checking blood pressure and pulse as taken and there were no signs that Evelyn Seaton was experiencing any difficulty until he failed to detect a pulse. He testified that he constantly monitored the anesthetic agents, that they were normal and expressed the opinion that the cardiac arrest just happened and could not account for any causative factor.

Some ten months later, Dr. Rosenberg was notified that Evelyn Seaton’s lawyer desired to examine the hospital records of the operation. He then proceeded to the hospital record room and began adding to the chart he kept during the operation until advised by a record room clerk that this was improper. When questioned about the chart as added to and introduced into evidence, Dr. Rosenberg testified in part:

“Some of these marks are accurate and were put on the day of the procedure. I don’t know which ones they were . . .
“Q. How far had you gotten along, Doctor, when the nurse stopped you or the record personnel stopped you?
“A. I don’t know. I was so flustered. I thought maybe Charlie, or Mr. Williams will misunderstand me. I was so, for a better word, shook I didn’t know where I quit and I handed it to them. I have no idea. If I had known, I would have erased them. No, I wouldn’t have done that. I will say this. I would not have erased this because that is immoral.”

This anesthesiologist chart, which, when checked, shows the patient’s blood pressure and pulse as noted during the course of the operation, precipitated the difficulty in the trial of this case.

The Seatons introduced as an expert medical witness Dr. Jan Hasbrouck, a practicing anesthesiologist and Chief of Anesthesiology for the University of Kentucky. Dr. Hasbrouck testified to his qualifications and further testified that prior to trial he had read the depositions of Dr. Rosenberg, the surgeon and the nurses, and that he also had examined the hospital record of the operation including the anesthesiologist chart.

Then in very brief summary, Dr. Has-brouck testified that in his opinion, because of the problem inherent in gallbladder surgery involving the upper abdomen, the patient had not been properly ventilated (assisted in breathing); that in his opinion the heart probably never entirely stopped, but beat weakly with the result that it became an ineffective pump in transmitting blood and oxygen to the brain; that this condition if sustained over a period of time would lead in sequence to cardiovascular collapse, cardiac arrest and death; that instant cardiac arrest is so rare as to not be reportable; that there are signs of this impending condition revealed by dropping blood pressure and pulse, etc., and that these indications should be apparent to the anesthesiologist; further, that the injury to Evelyn Seaton resulted from lack of oxygen to the brain and that a period of one and one-half to two minutes of no circulation would not produce Evelyn Seaton’s condition. He further testified that the anesthesiological chart kept by Dr. Rosenberg was too regular to be believable in that up to the point of the cardiac arrest it showed no change in blood pressure and that by the very nature of the procedures followed there would be changes.

It was this portion of the testimony that triggered what we believe to be reversible error in the trial of this case without regard to other trial errors which will be discussed later.

Movant’s counsel was exploring the signs which Dr. Hasbrouck regarded as indicating the impending emergency in this operation and asked:

“38 And if there was a slowing of the heart or the circulation to the point that it stopped or it ceased beating to such an extent that it ceased to furnish oxygen to the brain, would there, or not, have been some indication of that in the blood pressure and in the pulse?
“A. Yes, I think so.
“MR. WHITLOW: We object, your Hon- or, to this line of questioning. The indications are that the blood pressure did not drop until the cardiac arrest, and he is assuming that they didn’t even have any cardiac arrest.
“MR. WILLIAMS: No, sir. The indications are that the Doctor changed the record and the record is—
“COURT: Well, changing the record may be wrong but it hasn’t been shown what he changed them from, he just changed them to something. I don’t think the — although the procedure Dr. Rosenberg himself admits was unfortunate in that he did change the record but I don’t think changing the record is material in determining the cause of the cardiac heart arrest, if that’s what you are trying to show.
“MR. WILLIAMS: Well, we object to that, and certainly I think it’s very material.
“COURT: I’m talking about the cause of it.
“MR. WILLIAMS: Well, I’m talking about the cause of it, too. I think it’s certainly very material as to what can we believe about what Dr. Rosenberg says.
“COURT: Changing the record is not going to tell you anything, except the record was changed, and they weren’t changed, they were added to. He said he didn’t erase anything. He just didn’t note them at the time. I think perhaps ‘change’ is not the correct word that should be used in regard to the record.
“MR. WILLIAMS: Well, if he added to it, he changed it. It is certainly different from what it was when he left it.
“COURT: He added to it, but he says that he didn’t change anything that was on there at the time.
“MR. WILLIAMS: Well, he says he doesn’t know what was on there at the time.
“COURT: Well, all right, we can argue that point, I guess, for the rest of the afternoon but we are not going to. Now, what is your question?”

Before commenting on these remarks, let us place this trial in the proper perspective.

Evelyn Seaton suffered massive, disabling brain damage. The brain damage was a result of lack of sufficient oxygen to the brain for a period of time sufficient to cause the damage.

The Seatons’ theory of the case as presented by their expert witness is that sudden cardiac arrest does not happen; that probably the heart for a period of time was beating weakly so as to make it an inefficient pump; and that whether at the time lack of pulse was first noticed the heart was still beating very weakly or had stopped, there are indications of this condition prior to a crisis that should be apparent to the anesthesiologist and that the anesthesiologist should recognize these indications, or signs, and take remedial measures which will avert the emergency of cardiac arrest. That the failure to recognize these signs and apply remedial procedures breached his duty to the patient.

Dr. Rosenberg’s theory of the case is that the cardiac arrest was sudden with no advanced warning by signs indicating the impending cardiac arrest and that there was no breach of a duty owed the patient.

Dr. Rosenberg was under a duty to use that degree of care and skill which is expected of a reasonably competent practitioner in the same class to which he belongs (here anesthesiologist) acting in the same or similar circumstances. Blair v. Eblen, Ky., 461 S.W.2d 370 (1970). This is the standard of care placed upon Dr. Rosenberg here, and whether this standard was violated is the ultimate issue presented to the jury.

Here the anesthesiologist chart was in evidence with the circumstances of the additions to the chart by Dr. Rosenberg and his explanation. Dr. Hasbrouck testified that the chart was too regular to be believed, that fluctuations in blood pressure inevitably occurred. Dr. Rosenberg had testified that he would have noted any abnormal blood pressure readings. The Sea-tons were entitled to have this evidence before the jury without any prejudicial comments by the trial court. In our opinion the remarks of the trial court at the least diluted the effect of this evidence and at most effectively removed this evidence from consideration by the jury. The resulting prejudice is, in our view, sufficient to reverse this case.

It is not for us to draw inferences from this unusual conduct. The jury was entitled to place great significance, or no significance at all, or all the gradations in between, on the additions; and it is improper for the trial court to advise the jury, as was done here, that the changes were not material in determining the cause of the cardiac arrest. This misses the point, and, in effect, directs the jury not to consider Dr. Rosenberg’s conduct in this respect at all.

Also during the course of examining this witness there was a frivolous objection to a proper question as to Dr. Hasbrouck’s opinion on maintaining proper vigilance. The trial court again interjected what we consider to be an irrelevant issue and prejudicial comment into this trial. Somehow the trial court conceived the idea that the issue in the case was whether the heart had, in fact, stopped completely. A fair reading of Dr. Hasbrouck’s testimony is that he was of the opinion the heart never stopped completely but was beating so weakly that it would be difficult to ascertain if it had stopped. But in any event whether the heart stopped or was beating weakly, he expressed the same opinion as to indications and vigilance. The trial court remarked that “he [Dr. Hasbrouck] could not speculate on something unless he was there”; “he wasn’t there”; “he can guess.” Excluding this opinion from evidence was erroneous and coupled with comments on the evidence was prejudicial. There were other instances of excluding proper opinion evidence from the jury with remarks of “assumptions.”

We do not propose to unravel all the problems concerning hypothetical questions here except to say that the trial court fell into the error of taking the view that an assumed fact had to be based on the oral testimony of the persons present in the operating room, with prejudicial remarks such as: “Court: I don’t think we can say under these circumstances that there is any testimony to contradict what Dr. Rosenberg testified in his deposition, which you read.” This remark after a statement by Dr. Rosenberg’s counsel that all the proof is that the blood pressure was taken every five minutes or less; then another comment that “obviously you can explain the record by Dr. Rosenberg, but I don’t think you can explain the record by this witness, because he knows nothing at all about it, he wasn’t there when it was prepared.”

Generally we see nothing objectionable to the hypothetical questions posed here; and, for example, on one question we are of the opinion “the assumption of improper ventilation” in a hypothetical question was in evidence as a fact testified to by Dr. Has-brouck as to an opinion based upon the record, and it was proper to state if the result of such caused the damage here.

This case must be tried again, and for the purposes of this retrial we point out that Dr. Hasbrouck, prior to trial, read all the discovery depositions and the hospital records. Thus, Dr. Hasbrouck was in possession of all the requisite facts and may express his opinion and the reasons for his opinion in response to direct interrogation and need not be asked hypothetical questions. See 56 A.L.R.3d 300, Expert Witnesses-Hypothetical Questions, at p. 308. 31 Am.Jur.2d, Expert and Opinion Evidence, § 37, at p. 539 states:

“If an expert witness is acquainted with the facts of the case — that is, if he has personal knowledge or has made personal observation- — he may give his opinion upon the basis of his knowledge and observation in response to direct interrogation and without a hypothetical question, provided he is shown to have sufficient knowledge of the facts to enable him to form an opinion entitled to be given weight by the jury and, as a rule, provided the witness first testifies to the facts in his own knowledge upon which his opinion is based. On the other hand, an expert is not precluded from giving his opinion in answer to a hypothetical question merely because he has personal knowledge of the case and might testify directly. Even though an expert witness has actual knowledge of the facts in controversy, he may give his opinion based on hypothetical facts alone or upon such facts together with facts within his own knowledge. Thus, where the expert has testified to his own observations, he is generally permitted to state his opinion, based partly on facts stated in a hypothetical question and partly on those which he himself has testified to. Whether the expert’s opinion should be based upon facts known and testified to by him, or upon a hypothetical presentation of facts testified to by other witnesses, or upon both forms of data, is determined by examining counsel.”

The necessity of hypothetical questions is to inform the expert of relevant facts in testimony in order to elicit his opinion. The reason for hypothetical questions is not present here and should facilitate retrial.

One last caution, the expert expresses his opinion as a probability or certainty, not a possibility, “could have,” or the like.

The case is reversed with directions that the Seatons be granted a new trial.

All concur.


source: Caselaw Access Project

author: JONES, Justice.

license: Public Domain

text:
    Vick E. JOYCE, Movant, v. Roger DOWNS, Respondent.
    Supreme Court of Kentucky.
    Oct. 31, 1978.

      Thomas B. Russell, Threlkeld, Whitlow & Roberts, Paducah, for movant.
    Albert M. Karnes, Paducah, for respondent.
   JONES, Justice.

This personal injury action was brought in McCracken Circuit Court by Roger Downs against Vick Joyce, following a collision on Lone Oak Road in Paducah, Kentucky. Joyce counterclaimed for damages to his truck. In conformity with a jury verdict finding both parties negligent, a judgment was entered dismissing both claims with prejudice. The Court of Appeals reversed the judgment with instructions to grant Downs a new trial. Joyce’s motion for discretionary review was granted by this court on May 16, 1978.

Downs’ bicycle and Joyce’s pickup truck collided at night on a four-lane highway under disputed circumstances. Downs contended at trial that he was southbound on Lone Oak Road, on the far right portion of the outer lane, when he was sideswiped by Joyce’s truck. Joyce was in the right-hand southbound lane on Lone Oak Road. He testified that as he was passing Downs’ bicycle on the left, Downs turned out from the curb and hit the door of the truck. Two witnesses who were traveling in a car immediately behind Joyce’s truck testified to having first seen Roger Downs to their right in the Hannan Plaza parking lot, which exits onto Lone Oak Road at the site of the accident. Downs was heading toward Lone Oak Road. Neither of the witnesses saw the actual impact. Marilyn Joyce, who was riding on the passenger side of her husband’s truck, did not see Downs prior to the collision and testified only that something hit the door on her side.

The Court of Appeals reversed on the ground that the trial court’s instructions to the jury on the duties of plaintiff Downs in operating his bicycle included the duty of keeping a lookout to the rear for other vehicles using the highway. The Court of Appeals found error in the instruction that Downs was required to keep a lookout to the rear, calling it an inaccurate statement of the law which could have misled the jury. It reasoned that because bicycles are not required by statute to be equipped with mirrors, it would be impossible for bicyclists to comply with the duty imposed by the instruction.

This court is of the opinion that the trial court properly instructed the jury that Downs had a duty to keep a lookout to the rear. A bicyclist has the same duty as the driver of an automobile to be aware of his surroundings. The fact that he is not required to equip his bicycle with a rearview mirror does not limit that duty. On a bicycle, an adequate lookout can be maintained without a mirror, whereas the structure of an automobile tends to obstruct the driver’s vision and mandates a mirror. Furthermore, even an automobile’s mirror does not obviate the necessity of the driver’s turning to check blind spots. A bicyclist can and must keep a lookout, whether or not he is aided by a mirror.

The Court of Appeals found it unnecessary to rule on the other errors asserted by Downs when it reversed on the basis of the trial court’s instruction. This court holds that the instruction, though perhaps susceptible of improvement, was not improper.

The judgment is reversed and this cause remanded to the Court of Appeals for consideration of the other assignments of error.

All concur except CLAYTON, J., who did not sit.


author: LUKOWSKY, Justice. JONES, Justice,

text:
    McLEAN COUNTY, Kentucky, Movant, v. MEUTH CARPET SUPPLY et al., Respondents.
    Supreme Court of Kentucky.
    Oct. 31, 1978.
    W. E. Quisenberry, Quisenberry & Qui-senberry, Calhoun, for movant.
    Gross C. Lindsey, Henderson, Tommy Chandler, Providence, Ronald G. Sheffer, Henderson, John O. Hicks, III, Calhoun, Gary M. Gibbs, William I. Markwell, Henderson, Nathan B. Cooper, Owensboro, for respondents.
   LUKOWSKY, Justice.

This is a discretionary review of a decision of the Court of Appeals which reversed a summary judgment of the McLean Circuit Court which dismissed the mechanics lien claims of Meuth, et al., against McLean County. We reverse the Court of Appeals and affirm the trial court.

In 1973, McLean County, after advertising for bids, contracted with the Phoenix Construction Company to construct a records vault addition to the county clerk’s office for $18,961.00. A performance bond was required for this work and was furnished by the contractor. Thereafter, by executing “change orders” the scope of the work to be performed by the contractor was expanded to include among other things renovation of the circuit courtroom with a total contract price of $146,333.00. No further performance bond was required of the contractor to cover this addition work. During the course of its work, the contractor employed as subcontractors, Meuth, et al., who variously furnished labor and materials for the project.

Sometime in June or July of 1974 the contractor abandoned the project without completing either its work or payment to the subcontractors. At that time the county held $22,402.45 of the total contract price. This amount represented a ten per cent retainage on payments already made to the contractor and the balance was to pay for work not yet performed. The last payment due the contractor had been made the previous March. Between April 17 and July 13, 1974, each of the subcontractors filed statements of lien for their labor and materials with the county clerk as provided by KRS 376.210. In October, 1974, the county contracted with another contractor to finish the project and it used the funds it held to pay for this work.

The subcontractors contend that this money should have been used to pay their claims. The trial court rejected this contention on the basis that there were no funds due the contractor from McLean County on or after the dates the liens were asserted, and, consequently, there was nothing to which the statutory liens could attach. The Court of Appeals reversed on the basis of an equitable gloss formerly applied to make useful the vermiform appendix provided by a broader, less precise predecessor of KRS 376.210. City of Ashland v. Ben Williamson & Co., 294 Ky. 446, 171 S.W.2d 968 (1943); Allen County v. United States Fidelity and Guaranty Co., 122 Ky. 825, 93 S.W. 44 (1906). Under the old statute the lien attached to the public property improved, but the law also prohibited the sale of public property to satisfy mechanics liens. The Court was forced to either supply some method of satisfaction or declare the statute to be a legislative congenital nullity, because no effective source of satisfaction was provided in any case.

KRS 376.210 provides an integrated system by which those who furnish labor, material or supplies on public improvements may obtain a degree of security for and a source of satisfaction of their claims. Subsection (1) provides, “If the property improved is owned ... by any county . the person furnishing the labor, materials or supplies shall have a lien on the funds due the contractor from the owner . . . .” Subsection (2) provides that a supplier may acquire the lien as soon as he has undertaken to furnish labor, materials or supplies by filing in the county clerk’s office a statement of expectation of performance, and that the lien is effective from the date of filing. Subsection (3) provides, “. . . the lien shall attach only to any unpaid balance due the contractor for the improvement from the time a copy of the statement ... is delivered to the owner.”

The language of the statute makes it plain to us that the lien attaches only to funds actually earned by the contractor. Otherwise, they would never be “unpaid” and “due” to him. It is abundantly clear that the lien does not attach to funds that are unearned because they are neither “unpaid” nor “due”. The amount of protection offered by this scheme to a supplier is primarily limited only by the diligence of the supplier in filing and delivering his statement of lien. The scheme of protection provided by the legislature has utility within its specific limitations, and consequently, will not permit expansion by construction.

In this case the contractor was paid for all work it performed at least several weeks before any statements of lien were filed and delivered. At the time of filing and delivery there simply was nothing to which liens could attach. The $22,402.45 was unearned and never due and payable to the contractor. Had the statements been filed and delivered as soon as the subcontractors agreed to participate in the project they would have attached their liens to all funds thereafter due and unpaid the contractor. As it is, they delayed and lost the really substantial protection provided by the statute. They snoozed so they lose.

The decision of the Court of Appeals is reversed and the judgment of the McLean Circuit Court is affirmed.

All concur except CLAYTON, J., who did not sit and JONES, J., who dissents.

JONES, Justice,

dissenting.

In my view the subcontractors’ claims that the $22,402.45 not expended under McLean County’s contract with Phoenix is subject to their “liens for labor, materials or supplies furnished on public improvement.” The subcontractors furnished the labor and supplies in good faith. They had the assurance of the county judge and the architect that their claims would be paid.

I am of the view the opinion of the Court of Appeals correctly limits recovery by the subcontractors to funds held by McLean County under its contract with Phoenix. I am of the opinion the Court of Appeals was also correct in its conclusion that “liens on funds due the contractor” (Phoenix) was placed in KRS 376.210 so that the asserted liens of the subcontractors would reach funds due the contractor and not the property involved.

Here, the subcontractors lose while McLean County is unjustly enriched. The county neglected to require a sufficient performance bond from Phoenix which would have protected the subcontractors. Under the facts in this case I cannot subscribe to the doctrine espoused by the majority that, “They [subcontractors] snoozed so they lose.” McLean County should be required to pay the subcontractors in full. When their labor, materials and supplies were furnished they ought to have been promptly paid.

I would affirm the judgment of the Court of Appeals and let the subcontractors who furnished carpet, doors, labor and other supplies be paid.

It is a heartrending delusion and a cruel snare for the subcontractors not to be paid after the materials were furnished and their work finished.

For the reasons set out above, and with a clear conscience, I respectfully dissent.


text:
    Robert Ray HERRON, Movant, v. Ruby Dixie HERRON, Respondent.
    Supreme Court of Kentucky.
    Oct. 31, 1978.

      A. V. Conway, II, Conway & Hawley, Beaver Dam, for appellant.
    Henry C. Neel, Henderson, for appellee.
   STEPHENSON, Justice.

The question presented on this appeal is whether the division of marital property in this divorce action constituted an abuse of discretion and in the alternative whether the trial court should be directed to decide the case based on the presumption outlined by the Court of Appeals.

We reverse and remand to the Court of Appeals.

Resume of the pertinent facts set out by the Court of Appeals is as follows. The movant and respondent were married in 1950. “They raised two children, both of whom are now over the age of 21 years and are independent. Neither of the parties had any property which was claimed as non-marital property.

“During their marriage the parties accumulated a dwelling house now valued at $35,000 on which there was at the time of separation a mortgage for $13,000. The husband has participated in an investment plan at his place of employment which was valued at $4,053.81. The husband has purchased in his name 28 shares of stock in the Kennecott Copper Company and has a $5,000 life insurance policy with some cash value. The parties also own household furniture, supplies and equipment, and two automobiles, none of which was given a value by the trial court.

“Over the years of the marriage, the husband has been the principal wage earner. His gross earnings at the time of separation were approximately $1,800 per month. The wife has worked for the past five years as a teacher in a headstart program, working about seven or eight months each year with annual earnings of approximately $2,800 per year.

“The trial court determined that the value of the wife’s contribution to the marital property considering her contribution as a homemaker, the duration of the marriage and her economic circumstances was one-third of the net marital property.

“The judgment directed that the house and the shares of stock be sold, the insurance policy cashed or sold, and that the net proceeds be distributed one-third to the wife and two-thirds to the husband. The wife was given all of the household furniture and equipment and a 1973 Oldsmobile automobile free and clear of indebtedness. The husband was awarded a 1975 Pontiac automobile and the equity in the investment plan with Kennecott.

“Although no values were assigned to the household furniture or the automobiles, it is not contended by either party that the marital property was not divided substantially on a one-third/two-thirds basis.” The question of maintenance before the Court of Appeals is now moot, according to counsel for movant, and is not an issue before this court.

We express no opinion on the question of abuse of discretion on the part of the trial court in the division of marital property; we leave this question to be determined by the Court of Appeals on reconsideration of this case.

The question which is of concern to this court is that portion of the Court of Appeals’ opinion which states: “It is the opinion of this court that there should be a presumption of an equal distribution under the circumstances of this case in the absence of evidence to the contrary.”

It is with this resurrection of the concept of presumptions in the division of marital property that we disagree.

The old rule of “one-third to the wife” had its genesis in Thornberry v. Thornberry, 14 Ky. (4 Litt) 251 (1823), holding in substance that where a divorce has been obtained by the wife, and her conduct is blameless, an allowance equal to what the law gives her on the death of her husband is reasonable. Thereafter the “one-third rule” was followed as a presumption of reasonableness although not an inflexible rule, and was not characterized as a presumption. Then Colley v. Colley, Ky., 460 S.W.2d 821 (1970), discarded the “one-third to the wife” rule as a legal fiction. In 1972 the General Assembly enacted KRS 403.190:

“Disposition of property—(1) In a proceeding for dissolution of the marriage or for legal separation, or in a proceeding for disposition of property following dissolution of the marriage by a court which lacked personal jurisdiction over the absent spouse or lacked jurisdiction to dispose of the property, the court shall assign each spouse’s property to him. It also shall divide the marital property without regard to marital misconduct in just proportions considering all relevant factors including:
“(a) Contribution of each spouse to acquisition of the marital property, including contribution of a spouse as homemaker;
“(b) Value of the property set apart to each spouse;
“(c) Duration of the marriage; and
“(d) Economic circumstances of each spouse when the division of property is to become effective, including the desirability of awarding the family home or the right to live therein for reasonable periods to the spouse having custody of any children.”

Thus the courts have a legislative mandate to divide marital property in accordance with the standards set out in the statute. It is significant to us that the statutes do not mention “presumptions”; and in the absence of this, we are of the opinion the legislative mandate is binding upon us and that presumptions in the division of marital property should not be indulged in at all.

As we see the problem, if the presumption adopted by the Court of Appeals in this case is allowed to stand, the inevitable result would be a proliferation of presumptions in other fact situations, and the standards adopted by the General Assembly in KRS 403.190 would become meaningless. It is the duty of the trial court to apply statutory standards to the facts of the case and to make a just division of the marital property. The Court of Appeals then should review an appeal of the case by testing the judgment against these standards to determine if there has been an abuse of discretion.

The case, as it applies to division of marital property, is reversed and remanded to the Court of Appeals with directions to apply statutory standards in determining whether there has been an abuse of discretion.

JONES, LUKOWSKY, REED, STERN-BERG and STEPHENSON, JJ., concur.

PAT,MORE, C. J., and CLAYTON, J., do not concur.


text:
    Nathaniel ARNOLD, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Supreme Court of Kentucky.
    Oct. 31, 1978.

      Terrence R. Fitzgerald, Daniel T. Goy-ette, Jefferson Dist. Public Defender, Louisville, for appellant.
    Robert F. Stephens, Atty. Gen., Carl T. Miller, Jr., Martin Glazer, Asst. Attys. Gen., Frankfort, for appellee.
   JONES, Justice.

The principal question for decision is whether the failure of the trial court to follow mandatory presentencing procedures requires the remand of this case for proper sentencing.

Nathaniel Arnold was convicted of shooting a security guard in the face while committing a robbery. He was convicted of armed robbery and assault. A judgment was entered sentencing him to two concurrent 20-year terms of imprisonment. From that judgment Arnold appeals.

Arnold’s contention is simply that this case must be remanded for resentencing. In support of his argument, he relies on this court’s decision in Brewer v. Commonwealth, Ky., 550 S.W.2d 474 (1977), in which this court held presentence procedures to be prerequisites to the entry of a valid judgment. He contends also that KRS 532.-050(1) requires the trial court to obtain and duly consider a presentence report.

This court has reviewed the entire record. The only reference to sentencing and a pre-sentence report was made by the trial court at the close of the trial when he stated in substance that the case would be passed until November 11,1977, for sentencing and a presentence report. There is not a shred of evidence that the trial court followed the procedures set out in KRS 532.050 or that he complied with the procedures mandated in Brewer, supra. In Brewer, supra, this court held:

“The requirement placed upon a trial court by the statute is mandatory and does not afford a trial judge the privilege or discretion of determining whether the report will be requested, obtained, or considered. It is a ‘must’ and is in fact a prerequisite to the entry of a valid judgment. (Emphasis added). In view of the mandatory character of this requirement, the record of the proceeding should clearly disclose the fact that the trial court has fully complied with KRS 532.050 by requesting a presentence investigation, examining and considering the written report as supplied, and informing defendant or his counsel of the factual contents and conclusions contained in the report and the fact that the defendant either requested or did not request time within which to controvert the factual data contained in the report.”

Noting that sentencing has recently taken on greater significance under state and federal law, Arnold argues that public policy would best be served by a rule of this court requiring creation of an adequate contemporaneous record of sentencing procedures in every case unless a knowing and intelligent waiver appears on the record. He insists that such a rule would protect the rights of defendants and significantly reduce the volume of needless post-conviction litigation.

The Commonwealth concedes that the record fails to show compliance with Brewer, supra, but submits that this case should not be remanded for resentencing. Instead it argues that Brewer should be overruled and that the rule enunciated in Brewer should be replaced by a rule requiring re-sentencing only where the record fails to show that the defendant was represented by counsel at sentencing or that the provisions of KRS 532.050 were complied with. The Commonwealth argues that because Arnold was represented by counsel at sentencing, the proposed new rule would eliminate the need to resentence him. The Commonwealth maintains that resentencing is a waste of time and money since the end result would ordinarily be the same as that in the former proceeding.

The Commonwealth requests this court to declare KRS 532.050 unconstitutional as an invasion by the Legislature of the power of this court to make procedural rules.

KRS 532.050(1) provides that:

“No court shall impose sentence for conviction of a felony, other than a capítol offense, without first ordering a presen-tence investigation and giving due consideration to a written report of such investigation.”

The Commonwealth contends that this court has the inherent power to disregard a statutory enactment relating to judicial procedure. It views KRS 532.050 as an unworkable, unnecessary statute which results in waste of judicial time and taxpayers’ money. Be that as it may, this court has said on numerous occasions that the requirement placed upon a trial court by KRS 532.050 is mandatory, and does not afford a trial judge the privilege or discretion of determining whether the report will be requested, obtained, or considered. As late as April 11, 1978, this court held that strict compliance with KRS 532.050 and Brewer, supra, was necessary. Nickell v. Commonwealth, Ky., 565 S.W.2d 145 (1978). This court is not convinced by the earnest argument of the Commonwealth that Brewer, supra, should be modified. There is no need to decide whether KRS 532.050 violates the doctrine of separation of powers, because this court is willing to follow its provisions as a matter of comity.

It appears to this court that some trial judges consistently fail to comply with the procedures outlined in Brewer, supra, and with the provisions of KRS 532.050. Although the court has said that judges must comply with the principles mandated by Brewer, supra, and KRS 532.050, it is necessary to say it again. This court has no desire to be unduly critical of trial judges who fail to play by the rules. The court however is certain that at some point in time the trial judges who fail to follow KRS 532.050 and Brewer, supra, will understand that this court has said again and again that compliance with KRS 532.050 and Brewer, supra, is absolutely necessary.

The record reflects that the trial court failed to comply with the mandate of KRS 532.050. The Commonwealth concedes that he did not. Therefore, this cause is remanded for resentencing in conformity with Brewer, supra.

All concur.


author: PARK, Judge.

text:
    Ira L. MENDELL, Roger S. Smith and Leonard Yaseen, d/b/a Hopkinsville Associates, a partnership, Appellants, v. GOLDEN-FARLEY OF HOPKINSVILLE, INC., Appellee.
    Court of Appeals of Kentucky.
    Jan. 6, 1978.
    Rehearing Denied Feb. 2, 1978.

      W. Douglas Myers, Keith & Myers, Hop-kinsville, for appellants.
    John M. Dixon, Jr., Turner, Dixon, Kemp & Fletcher, Hopkinsville, William J. Parker, Harlin, Parker & Rudloff, Bowling Green, for appellee.
    Before HOGGE, PARK and WHITE, JJ.
   PARK, Judge.

This is an appeal from a judgment of the Christian Circuit Court granting a permanent injunction against the lessor in a shopping center lease. The plaintiff-appellee, Golden-Farley of Hopkinsville, Inc., is a tenant operating a men’s and boys’ clothing store in the Pennyrile Mall. The Pennyrile Mall is owned and operated by Hopkinsville Associates, a partnership composed of the three defendants-appellants.

FACTS

The primary facts in the case are undisputed. On November 24,1970, Hopkinsville Associates entered into a lease agreement with Golden-Farley for space in the Penny-rile Mall. Section 5.01 of the lease agreement, entitled “use of premises,” provided:

Tenant shall use the lease premises for the purpose of conducting the business hereinafter set forth and for no other purpose to wit: the sale of medium to better Men’s and Boy’s clothing, furnishings and accessories, including the sale of men’s sundries and Men’s and Boy’s shoes as an incidental part thereof.

Simultaneously with the execution of the lease agreement, the parties executed an addendum to the lease. Paragraph 3 of the addendum, entitled “exclusive covenant,” provided:

Notwithstanding anything to the contrary herein contained, provided Tenant is not in default of the terms, conditions, or convenants of this agreement, Landlord agrees not to lease or cause to be occupied, any other space in the shopping center for the purpose of medium to better priced Men’s and Boy’s clothing store. This clause shall not be applicable to;

J. C. Penney Company
Walgreen Drug Company
Montgomery Ward
F. W. Woolworth Company
Malone & Hyde Supermarket
or to any Tenant where the sale of Men’s and Boy’s clothing is incidental to its main line of business.

This provision was added at the insistence of Golden-Farley. The lease was for a primary term of ten years with an option to renew for two five-year extensions.

On July 23, 1976, Hopkinsville Associates entered into a lease agreement with Kinder Corporation for other space in the Pennyrile Mall. Under the terms of the Kinder lease, the leased premises could be used only for the purposes of conducting the business of “retail sale of Men’s and Boy’s clothing, furnishings, apparel, accessories, and footwear of all types.” The Kinder Corporation operates a number of men’s and boys’ clothing stores under the name of “Marshall’s.”

When it became aware that a Marshall’s store would be opened in the Pennyrile Mall, Golden-Farley commenced the present action in the circuit court on September 24, 1976. A restraining order was obtained on the same day prohibiting Hopkinsville Associates from “leasing or causing to be occupied” any space within the Pennyrile Mall to any person “which primarily sells medium to better priced Men’s and Boy’s clothing” other than the five stores named in the exception to the exclusive covenant contained in the addendum to the original lease agreement. Despite the restraining order, the Marshall’s store was opened in mid-November 1976. The Marshall’s store sells many of the same lines of clothing that are sold at the Golden-Farley store, and Marshall’s and Golden-Farley are in direct competition with each other.

VALIDITY OF RESTRICTIVE COVENANT

Hopkinsville Associates recognizes that the restrictive covenant is valid at common law. When a restrictive covenant in a lease is limited as to territory and duration, the Kentucky courts have consistently upheld the enforceability of the covenant. Vanover v. Justice, 180 Ky. 632, 203 S.W. 321, 1918E L.R.A. 662 (1918); Vaughan v. General Outdoor Advertising Co., Ky., 352 S.W.2d 562 (1961); W. T. Grant Co. v. Indian Trail Trading Post, Ky., 423 S.W.2d 251 (1967). Hopkinsville Associates contends that the common law rule has been modified by legislation enacted by the Kentucky Legislature in 1976.

ICRS 367.175 (1976 Ky. Acts, ch. 330, § 1) provides:

(1) Every contract, combination in the form of trust and otherwise, or conspiracy, in restraint of trade or commerce in this commonwealth shall be unlawful.
(2) It shall be unlawful for any person or persons to monopolize, or attempt to monopolize or combine or conspire with any other person or persons to monopolize any part of the trade or commerce in this commonwealth.

Hopkinsville Associates points out that KRS 367.175 is based upon sections 1 and 2 of the Sherman Anti-Trust Act. Because of the similarity of the language used in the two acts, Hopkinsville Associates urges this court to give the same construction to KRS 367.175 as has been given to sections 1 and 2 of the Sherman Anti-Trust Act by the federal courts. Although not bound by the federal decisions, we shall examine the restrictive covenant in this case in light of the cases construing sections 1 and 2 of the Sherman Anti-Trust Act.

The Sherman Anti-Trust Act is based in large part upon the common law principle that only unreasonable restraints of trade are illegal. However, some trade practices are considered to be per se unreasonable under the Sherman Anti-Trust Act. In Klor’s v. Broadway-Hale Stores, 359 U.S. 207, 210-11, 79 S.Ct. 705, 708, 3 L.Ed.2d 741 (1959), the Court stated:

Section 1 of the Sherman Act makes illegal any contract, combination or conspiracy in restraint of trade, and § 2 forbids any person or combination from monopolizing or attempting to monopolize any part of interstate commerce. In the landmark case of Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619, this Court read § 1 to prohibit those classes of contracts or acts which the common law had deemed to be undue restraints of trade and those which new times and economic conditions would make unreasonable. Id., at pages 59-60, 31 S.Ct. at pages 515-516. The Court construed § 2 as making “the prohibitions of the act all the more complete and perfect by embracing all attempts to reach the end prohibited by the 1st section, that is, restraints of trade, by any attempt to monopolize, or monopolization thereof * * * Id., at page 61, 31 S.Ct. at page 516. The effect of both sections, the Court said, was to adopt the common-law proscription of all “contracts or acts which it was considered had a monopolistic tendency * * * ” and which interfered with the “natural flow” of an appreciable amount of interstate commerce. Id., at pages 57, 61, 31 S.Ct. at page 514; Eastern States Retail Lumber Dealers’ Ass’n v. United States, 234 U.S. 600, 609, 34 S.Ct. 951, 953, 58 L.Ed. 1490. The Court recognized that there were some agreements whose validity depended on the surrounding circumstances. It emphasized, however, that there were classes of restraints which from their “nature or character” were unduly restrictive, and hence forbidden by both the common law and the statute.

Applying these standards we conclude that the enactment of KRS 367.175 did not effect a material change in the common law of Kentucky respecting the validity of restrictive covenants in leases.

In Savon Gas Stations Number Six v. Shell Oil Company, 309 F.2d 306 (4th Cir. 1962), cert. den. 372 U.S. 911, 83 S.Ct. 725, 9 L.Ed.2d 719, the owners of the Middlesex Shopping Center leased a service station to the Shell Oil Company. The lease provided that the owners would not permit any other property in the Middlesex Shopping Center to be used for the purpose of a service station which would compete with the business being conducted by Shell on the premises leased by it. In upholding the validity of this restrictive covenant, the court stated:

The plaintiffs’ case is pitched upon the theory that both the Federal Anti-Trust Statutes and the common law of Maryland are violated when the owner of a modern shopping center enters into a restrictive agreement with a lessee giving him the exclusive right to sell his wares in the area. It is well known that the success of a shopping center depends upon the gathering together in one area of a variety of enterprises which are able to serve the needs of the general public and that this end can often be best accomplished by offering to the individual merchant the exclusive right to sell in the center the kind of merchandise he handles. .
We agree with the conclusion of the District judge that the restrictive covenant did not involve the violation of the Federal Statutes. It has been established from the beginning that the condemnation of the Sherman Anti-Trust Act is directed only at such agreements or conspiracies as impose unreasonable or undue restraint upon interstate commerce. Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619; United States v. Trenton Potteries, 273 U.S. 392, 395-396, 47 S.Ct. 377, 378-379, 71 L.Ed. 700; Klor’s v. Broadway-Hale Stores, 359 U.S. 207, 211, 79 S.Ct. 705, 708-709, 3 L.Ed.2d 741. In the instant case the restraint cannot be so characterized.

309 F.2d at 309. This decision clearly supports the prior Kentucky cases upholding the validity of such provisions of common law.

Hopkinsville Associates asserts that the restrictive covenant in the Golden-Farley lease is per se unreasonable. In support of this argument, they cite two cases before the Federal Trade Commission, Tysons Corner Regional Shopping Center, [1973-1976 Transfer Binder] Trade Reg.Rep. (CCH) ¶20,933 (F.T.C. Dkt.No. 8886, June 10,1975), and Strawbridge & Clothier, [1973-1976 Transfer Binder] Trade Reg.Rep. (CCH) ¶21,082 (F.T.C. Dkt.No. C-2812, March 22, 1976). The practices condemned by the Federal Trade Commission in these cases involved the power of major or anchor tenants in shopping centers to approve or disapprove all new shopping center tenants. In those cases, large department stores were in a position to control space allocations and retail prices under broad veto powers granted the anchor tenants by the owners of the shopping centers. No such situation is involved in this case. Golden-Farley is not a major or anchor tenant. Instead, it is a medium sized store which must compete with the large anchor tenants such as J. C. Penney and Montgomery Ward. Furthermore, the restrictive covenant applies to only one line of business, men’s and boys’ clothing, and it does not extend to every kind of business which might be conducted within the Pennyrile Mall. The Federal Trade Commission decisions have no application to the facts of this case.

In support of their contention that the Golden-Farley restrictive covenant is unreasonable per se, Hopkinsville Associates relies upon a trial court opinion construing Ohio’s anti-trust statute in State ex rel. Brown v. Palzes, 39 Ohio Misc. 155, 317 N.E.2d 262, 68 Ohio Op.2d 386 (1973). In a shopping center lease, the owner agreed that the lessee would be the only women’s wear store in the shopping center engaged in the sale of “high priced, quality women’s wear.” As a condition of later admission into the shopping center, a younger women’s store was required to agree that all items of clothing would be sold at less than $25.00 per individual garment except for suits and coats which would be sold for less than $40.00 per item. In an action brought by the state Attorney General, the trial court held that the agreements were illegal because of their price-fixing characteristics. We do not follow the decision in the Palzes case. The Ohio act is much broader in its language than the provisions of KRS 367.-175. The original lease agreement in Palzes contained a provision against any competition. In the present case, Golden-Farley is in direct competition with such anchor tenants as J. C. Penney and Montgomery Ward. There is no possible way for Golden-Farley to affect the prices of men’s and boys’ wear sold by J. C. Penney or Montgomery Ward in the manner done in the Palzes case.

For the foregoing reasons, we conclude that the Golden-Farley restrictive covenant is not an unreasonable restraint of trade. It does not violate the terms of KRS 367.-175 or any federal statute which might be applicable to the Pennyrile Mall.

Hopkinsville Associates also asserts that the restrictive covenant in the Golden-Farley lease is so ambiguous that its meaning cannot be reasonably ascertained. Under its lease with Hopkinsville Associates, Golden-Farley was prohibited from using the leased premises for any purpose other than the “sale of medium to better men’s and boy’s clothing, furnishings and accessories.” The restrictive covenant contained in the addendum is no more ambiguous than the provision in the main lease defining the permitted uses. We conclude that neither provision is so ambiguous that its meaning cannot be ascertained. The record indicates that Marshall’s is selling the same lines of clothing in direct competition with Golden-Farley. The trial court did not err in holding that the restrictive covenant would be violated by leasing premises within the Pen-nyrile Mall to Marshall’s.

VALIDITY OF INJUNCTION

In the judgment entered by the circuit court, Hopkinsville Associates were enjoined from leasing any space in the Penny-rile Mall in violation of the restrictive covenant to any person selling medium to better priced men’s and boys’ clothing. In addition, the judgment provided that Hopkins-ville Associates was “permanently ENJOINED and DIRECTED to cause the space presently occupied under Lease Agreement by Kinder Corporation with the assumed store name of Marshall’s . to be vacated.” Because the Kinder Corporation was not a party to the action, Hop-kinsville Associates asserts that the permanent injunction is too broad. We agree. The Kinder Corporation clearly claimed an interest relating to the subject matter of the action. The restrictive covenant in the Golden-Farley lease could be enforced against the Kinder Corporation by injunction only if the Kinder Corporation had knowledge of the terms of the Golden-Farley lease. Vaughan v. General Outdoor Advertising Co., supra at 565-66. Without Kinder Corporation as a party to the action, there was a substantial risk that Hopkins-ville Associates would incur inconsistent obligations to Golden-Farley and Kinder Corporation. Under CR 19.01, it was mandatory that Kinder Corporation be made a party to the action. Kentucky High School Athletic Association v. Hopkins County Board of Education, Ky.App., 552 S.W.2d 685, 689 (1977).

However, Hopkinsville Associates never raised the question in the circuit court concerning the failure to join the Kinder Corporation as a party. Generally, a party should not be permitted to raise the question of non-joinder for the first time on appeal. Nevertheless an injunction should not interfere with rights acquired in good faith by third persons who are not parties to the proceedings. Roberts v. Davidson, 83 Ky. 279, 7 Ky.L.Rptr. 262 (1885). Consequently, we conclude that the circuit court erred in directing Hopkinsville Associates to evict a tenant who was not a party to the action and whose rights had not been adjudicated.

RULING

The judgment of the circuit court is affirmed except for the portion of the judgment requiring Hopkinsville Associates to cause Kinder Corporation to vacate the premises leased for the Marshall’s Store. That portion of the judgment is reversed without prejudice to the right of Golden-Farley to join Kinder Corporation as a party-

All concur.

      . Section 1 of the Sherman Anti-Trust Act (15 U.S.C. § 1) provides:
      Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal .
      Section 2 of the Sherman Anti-Trust Act (15 U.S.C. § 2) provides:
      Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony .


author: HOGGE, Judge.

text:
    Gerald BELL, Appellant, v. LOUISVILLE MOTORS, INC., Appellee.
    Court of Appeals of Kentucky.
    Aug. 4, 1978.
    Rehearing Denied Nov. 10, 1978.

      Harry B. Diamond, Richard A. Dolin, Lohman & Diamond, Louisville, for appellant.
    Patrick E. Morgan, John T. McGarvey, Louisville, for appellee.
    Before GANT, HOGGE and WILHOIT, JJ.
   HOGGE, Judge.

This is an appeal from a summary judgment of the Jefferson Circuit Court in favor of defendant-appellee, Louisville Motors, Inc. Gerald A. Bell, the appellant in this case, sued Louisville Motors, Inc. after purchasing a Ford truck, represented to be a new 1975 model truck. Bell’s complaint alleged that the truck was not new. He sought rescission of the contract and damages for breach of express and implied warranties. Bell asserted that the misrepresentation was made with the intent of deceiving him, and that the acts of the appellee’s agent were unlawful under KRS 367.170, as they constituted a “false, misleading, or deceptive act or practice.” Louisville Motors, Inc., filed a third-party complaint against Ford Motors Company. Summary judgment was granted in favor of Ford; however, only the summary judgment in favor of Louisville Motors is involved in this appeal.

The briefs of both parties to this appeal indicate that the truck’s problems arose when its engine overheated during a test drive by another potential customer. As the case was decided on motion for summary judgment, evidence in regard to this alleged occurrence was not introduced.

On motion for summary judgment, it is the duty of the trial court to determine whether there is a genuine issue as to any material fact, and whether the moving party is entitled to a judgment as a matter of law. CR 56.03. If a genuine issue of material fact exists, summary judgment is precluded.

Appellant alleges that there is such an issue in this case; that is, whether the truck was new. The complaint asserted that it was not new; the answer alleged that it was. The only evidence in the record is Bell’s deposition. Bell began noticing problems with his Ford truck after purchase. It did not have a lot of power, and did not change gears well. His engine was not painted like the engines of other new trucks he examined. There was a ticking which friends said was an indication of a burnt valve. He became convinced his engine was rebuilt, and made this assertion to personnel at Louisville Motors. Work sheets, which he was allowed to see on request, showed that Louisville Motors had replaced five pistons and a short block in the vehicle. Bell also noted that there had been a “hole in block to water pump omitted.”

Appellee contends that the facts of this case are undisputed and that those facts are that appellant is claiming his vehicle is not new because defective parts were replaced by new parts, and that, as a matter of law, this does not make a vehicle “used.” We do not construe appellant’s claim so narrowly; we feel that the deposition suggests that this case also involves the effect of damage to an engine on the issue of newness.

Although this appears to be a case of first impression in Kentucky, we have found numerous out-of-state authorities which address the question of the circumstances under which a vehicle or piece of machinery should be considered “new”, and a number of these indicate that extensive damage may prevent an item from being classified as “new.”

In 66 C.J.S. New, the term is defined as “not yet used or worn; now first used for some purpose; recently made; still unimpaired by use.” (Emphasis added). In Rawlins v. McIntyre, 330 S.W.2d 524, 526 (Tex.Civ.App.1959), the Texas Court of Civil Appeals stated, “The judge as the trier of the facts did not abuse the discretion vested in him in finding from the evidence disclosed by the record and the legitimate inferences to be drawn from it that a house trailer that was damaged to such an extent that a component part had to be replaced and major repairs made was not a new trailer in the sense that “new” was used in the representation . . . .”

In Maxcy v. Frontier Ford, Inc., 29 Ill.App.3d 867, 331 N.E.2d 858, 861 (1975), the Appellate Court of Illinois stated that “[Wjhen a car is sold as ‘new’, the purchaser is entitled to receive a car which does not show age and wear from whatever cause to a greater degree than reasonably may be expected in a car of the kind and price involved.” The court held that whether a car is “new” is an issue to be decided by the trier of facts.

It has been said that the purpose of a summary judgment is to terminate litigation when, as a matter of law, it appears that it would be impossible for respondent to produce evidence at trial warranting judgment in his favor against movant. Harlow v. Harlow, Ky., 551 S.W.2d 230 (1977); Stewart v. Lawson, Ky., 437 S.W.2d 733 (1969). We do not believe that to be the case in the proceeding before us. We hold that there was a genuine issue of material fact as to the newness of the vehicle, in view of Bell’s testimony regarding its lack of power, failure to change gears well, ticking indicating a burnt valve, and other matters. We hold that the trial court erred in granting summary judgment.

Appellee’s second argument that summary judgment was properly granted involves the fact that there existed no warranties beyond the description on the face of the buyer’s order, except for the manufacturer’s written warranty. Appellee contends that the manufacturer’s written warranty merely provided that defective parts would be replaced free, and since appellant has not taken advantage of this warranty, he has no remedy. The manufacturer’s written warranty had not been introduced into evidence as of the time motion for summary judgment was granted. Appellant contends that the manufacturer’s warranty is for the sale of a new car, and that appellee has thus extended a warranty of newness. KRS 355.2-313(l)(b) provides that, “[a]ny description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.” We hold that this issue could not properly be decided upon motion for summary judgment on the basis of the record before us.

Appellee further argues that it is entitled to a finding as a matter of law that Bell accepted the truck and did not revoke his acceptance within a reasonable time as required by KRS 355.2-608. It asserts that Bell was therefore without a remedy and thus summary judgment was properly granted.

Appellee’s contention is based on the assumption that Bell did not attempt to revoke acceptance until he had driven the truck three months and 3,500 miles. KRS 355.2-608 and KRS 355.2-607 state that revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the grounds for it. In this case, there is some indication that Bell did not become aware of the facts which led him to believe that his truck was not new until some time after purchase, after he began to experience problems with the truck, and obtained company work sheets. Upon obtaining the work sheets, Bell complained that he had a rebuilt engine, and asked what the company intended to do about it.

Under our prior statute with regard to revocation of acceptance, KRS 361.690, there was also a requirement that revocation be made within a reasonable time. In Chaplin v. Bessire and Company, Ky., 361 S.W.2d 293, 297 (1962), the court made the following statements with regard to what is a reasonable time:

It has been said that while the seller is engaged in an effort to remedy the defects the “reasonable time” within which the buyer must rescind does not run. Heibel v. United States Air Conditioning Corp., 1939, 206 Minn. 288, 288 N.W. 393, 394. And if the buyer promptly calls upon the seller to make his warranty good the time should not begin to run against the buyer until it is no longer reasonable for him to expect that the seller can and will do so.
. On the whole case we conclude that reasonable men may well differ on whether Chaplin acted in due season, and that the question therefore was in the province of the jury.

See also Annotation, 65 A.L.R.3d 354 at § 2(b) and § 11 (1975).

We hold that there was an issue of fact as to whether revocation of acceptance of the truck was made within a reasonable time, and Bell was entitled to the opportunity to introduce evidence on this question and have it submitted to a jury.

The judgment is reversed.

All concur.


author: HOWERTON, Judge.

text:
    Alice Jean HALEY, Appellant, v. Michael L. HALEY, Appellee.
    Court of Appeals of Kentucky.
    Oct. 6, 1978.

      Anthony L. Warth, Louisville, for appellant.
    G. Phillip Deeb, Sr., Louisville, for appel-lee.
    Before GANT, HOGGE and HOWER-TON, JJ.
   HOWERTON, Judge.

This is an appeal from an order of the Circuit Court denying appellant’s motion to modify the child support provisions of a settlement agreement. The agreement was entered into on September 8, 1974, and it was later incorporated into the decree dissolving the marriage of the parties.

This controversy began in December, 1977, when appellant moved the court for a rule ordering appellee to show cause why he should not be required to maintain medical insurance on the child; to pay all medical and dental bills not covered by his insurance; to pay for the child’s therapy with a psychologist; to maintain sufficient life insurance to cover future support payments; to pay the child’s expenses at a private school; and to increase the support payments from $35.00 to $60.00 per week.

The matter was referred to a commissioner, and a report was filed recommending that appellee be required to pay one-half of the child’s medical bills not covered by the insurance he already carried and that the amount of child support be raised from $35.00 to $45.00 per week. Both parties filed exceptions to this report pursuant to CR 53.06(2). The trial judge issued an order modifying the recommendations and ruling that so long as appellee continues to provide medical insurance, his liability is limited to the coverage, but if the insurance is discontinued appellee would then be responsible for one-half of the child's medical bills. The order also stated that there was no basis for increasing the amount of child support.

Appellant advances several arguments in support of her contention that the trial court’s order is erroneous and should be reversed. First, she argues that the trial judge erred in finding that appellee had no duty to provide the child’s medical insurance because that issue was not before the court. Appellant suggests that the issue became moot when the commissioner entered his finding that appellee already carried insurance on the child and the trial court was therefore without authority to rule upon it. As it was appellant’s petition that brought this issue before the trial court in the first place, we have little difficulty in rejecting her complaint that the judge decided the question of insurance sua spon te.

Appellant’s second allegation of error centers on the failure of the trial court to accept the commissioner’s recommendation that appellee pay one-half of the child’s medical expenses not covered by his insurance. She contends that the trial court may not disturb the commissioner’s findings of fact and conclusions of law unless they are clearly erroneous. This is not the law in Kentucky, CR 53.06(2) provides in part, “The court after hearing may adopt the report or may modify it or may reject it in whole or in part or may receive further evidence or may recommit it with instructions.” Thus, the clear language of the rule allows the trial judge complete discretion as to the use of a commissioner’s report. We, therefore, see no error in the trial court’s decision not to adopt all of the commissioner’s recommendations.

Appellant further contends that the language of CR 53.06(2) requires the court to provide a hearing on the exceptions to the commissioner’s report before modifying or rejecting it, and thus the failure of the trial court to hold such a hearing constitutes reversible error. We are of the opinion that the reference to a “hearing” in CR 53.06(2) merely intends that the parties be afforded an opportunity for oral argument. A full-blown evidentiary hearing is not contemplated by the rule.

Although the parties disagree as to whether the trial court heard oral arguments on the exceptions, we believe that appellant has waived any complaint on that issue by her failure to object. The record is devoid of evidence showing any objection to the submission of the case without oral argument, and this court is bound by what appears in the record. Garrison v. Garrison, Ky., 253 S.W.2d 626 (1952). Thus, appellant may not predicate error on the court’s failure to hold a hearing on the exceptions.

Appellant’s final contention is that the trial court abused its discretion in setting aside the commissioner’s recommendation that the amount of child support be increased from $35.00 to $45.00 per week. We do not agree. In order to warrant a modification of the terms of the support agreement, the moving party has the burden of showing changed conditions so substantial and continuing as to make the terms of the original agreement unconscionable.” KRS 403.250(1). The term “unconscionable” has been construed to mean “manifestly unfair or inequitable.” Wilhoit v. Wilhoit, Ky., 506 S.W.2d 511, 513 (1974). The trial judge in this case determined that appellant failed to meet this test, and we are not willing to say his decision is clearly erroneous or constitutes an abuse of discretion. The monetary provisions of the settlement agreement were modified in part by the requirement that the appellee either continue to provide medical insurance or pay one-half of any medical expenses.

Appellant asserts that the court’s failure to reject the commissioner’s findings of fact as clearly erroneous, or to enter contrary findings, necessarily leads to the conclusion that the trial court’s order is unsupported by the evidence. Although the trial judge modified the commissioner’s suggested order, he did not alter the attached findings of fact. It therefore appears that the court intended to adopt those findings. CR 52.01. Furthermore, the record indicates that neither party requested additional findings from the judge. CR 52.04.

On this record, we cannot say that any abuse of discretion has been demonstrated. Therefore, the judgment of the trial court is affirmed.

All concur.


author: HOWARD, Judge.

text:
    Leon WAHBA, Appellant, v. DON CORLETT MOTORS, INC., Appellee.
    Court of Appeals of Kentucky.
    Oct. 6, 1978.

      Franklin S. Yudkin, Louisville, for appellant.
    Stuart A. Handmaker, Henry S. Johnson, Handmaker, Weber & Meyer, Louisville, for appellee.
    Before HOWARD, HOWERTON and PARK, JJ.
   HOWARD, Judge.

This is an appeal from a judgment entered in the Jefferson Circuit Court wherein the trial court directed a verdict on the issue of liability for breach of contract in favor of plaintiff-appellant, Leon Wahba (hereinafter referred to as Wahba), against defendant-appellee, Don Corlett Motors, Inc. (hereinafter referred to as Corlett Motors), and submitted only the issue of damages for breach of contract to the jury. The jury returned a verdict in the amount of $875.00, that sum being the difference between the market price of a certain Audi and the price for a reasonably similar replacement vehicle. Wahba appeals, contending that the trial court erred in refusing to allow proof on the issue of Corlett Motors’ alleged fraudulent actions and in refusing to submit instructions on punitive damages and consequential damages to the jury.

Wahba desired to purchase an Audi and on Saturday, August 6, 1977, went to Cor-lett Motors, an Audi dealer. Wahba looked at a used 1976 Audi Fox Station Wagon, took a test drive in it, and decided he wanted to purchase it.

Tom Whitehair, a salesman for Corlett Motors, and Wahba then discussed the purchase price of the station wagon. White-hair stated that the list price of the car was $4,995.00. Wahba then made an offer of $4,225.00, a price which he thought was fair and reasonable. The purchase proposal was filled out by Whitehair, listing the price of the car at $4,225.00; Wahba then signed the proposal. All deals made by Whitehair had to be approved by the sales manager, Mack McKinney. Whitehair brought the purchase proposal into McKinney’s office and McKinney initialed it.

Whitehair returned with the purchase proposal and stated to Wahba that he now owned the car. Whitehair explained that the purchase order also had to be filled out, and this form was completed, listing the exact same figures as those listed on the purchase proposal. Wahba signed the purchase order and gave Whitehair a check for $100.00 as down payment on the car.

Whitehair took the purchase order and Wahba’s check into McKinney’s office. It was then that McKinney came out to Wah-ba and said that the station wagon could not be sold for the price of $4;225.00. He stated that Whitehair had filled out the purchase proposal incorrectly which had misled him (McKinney) when he read the purchase proposal and initialed it. Wahba objected and said that a deal had been made. McKinney then returned Wahba’s check for the down payment. Wahba subsequently filed suit.

Wahba sought a writ of possession for the station wagon and also claimed consequential and punitive damages for fraud, under both the common law and the Consumer Protection Act. A restraining order was issued by Judge Charles Leibson, as hearing officer under KRW Chapter 425, forbidding Corlett Motors to move the car.

The purchase proposal stated that the terms of purchase were not binding until the purchase order was accepted by the dealer. After a hearing on the matter, Judge Leibson determined that the purchase proposal was a contract and issued an order directing Corlett Motors to specifically perform the contract by delivering the station wagon to Wahba. A temporary injunction was issued although the writ of possession was not signed at that time in order to avoid extra court costs. For some reason, unclear from the record, the car was not delivered. The writ of temporary possession was subsequently signed and the Sheriff took custody of the car. Corlett Motors then posted a bond and regained possession of the car pursuant to KRS 425.-116. The temporary injunction was later dissolved by Judge Paul Keith and Corlett Motors was allowed to sell the car to someone other than Wahba.

The case then came to trial before Judge Ryan. The trial court directed a verdict on the issue of liability on the part of Corlett Motors, holding that there was a binding contract and that Corlett Motors had breached same. The instruction given to the jury was for breach of contract damages only. The trial court decided, on the basis of Wahba’s deposition, that no fraudulent action by Corlett Motors had been shown. No proof was allowed on that point at trial and no instruction on punitive damages was given. No instruction on consequential damages was given since it was not pled by Wahba until the day of trial by way of an amended complaint.

Wahba states that Corlett Motors acted fraudulently by attempting to “bait and switch” him to a second contract for the same station wagon at a higher price. He interpreted McKinney’s action, in stating that a mistake had been made on the purchase proposal, as a “very thinly veiled form of pressure” in order to get him (Wah-ba) to offer more money for the ear. Wah-ba also states that he has shown injury by pursuing his legal remedy, not getting the car, and having to purchase a substitute automobile at a higher price. He also states that he was denied his rights under KRS 367.170 and KRS 367.220 of the Consumer Protection Act to prove and collect punitive damages and attorney’s fees.

The general rule is that an action for fraud and deceit cannot be maintained unless the “six elements” of fraud are shown, being: (a) a material representation, (b) which is false, (e) known to be false or made recklessly, (d) made with inducement to be acted upon, (e) acted in reliance thereon, and (f) causing injury. Cresent Grocery Co. v. Vick, 194 Ky. 727, 240 S.W. 388 (1922). The burden is on the party asserting fraud to establish it by clear and convincing evidence. Sanford Construction Company v. S & H Contractors, Inc., Ky., 443 S.W.2d 227 (1969).

The entire deposition of Wahba has not been filed before this Court. However, from what we are quoted from Wahba’s deposition, he was not pressured by White-hair, initially, into buying that particular Audi. Neither was he pressured by either Whitehair or McKinney into buying another car after the discussion about the erroneous purchase proposal. In Wahba’s own words: “I was not defrauded to enter the contract, I was denied the proper execution of the terms of the contract, which stated that in return for my paying a said amount, I was to get a particular car.” It also seems clear from portions of Whitehair’s deposition that he was not one of the more astute used car salesmen.

It must also be remembered that Corlett Motors’ defense, before liability was found, was that the purchase proposal was not a binding contract between the parties. Cor-lett Motors did not deprive Wahba of his legal remedy either by asserting a defense to his complaint or by following the provisions of KRS 367.110 et seq. concerning repossession of the car.

We agree with the trial court that no fraudulent action was shown on the part of Corlett Motors by its agents, Whitehair and McKinney. Although a mistake was made by Whitehair, to the detriment of Wahba, in that he was not able to purchase a car listed at $4,995.00 for a price of $4,225.00, Wahba was allowed his damages for breach of contract. The fraud supposedly practiced on Mr. Wahba exists only in his mind.

KRS 367.170 provides that unfair or unconscionable, false, misleading or deceptive acts are to be considered unlawful. The meaning of those words are “generally well understood by those who want to understand them.” Fare To Be Great, Inc. v. Commonwealth ex rel. Hancock, Ky., 511 S.W.2d 224, 227 (1974). KRS 367.220(1) allows for recovery of punitive damages where appropriate. (Emphasis ours). KRS 367.220(3) provides that attorney’s fees may be awarded to the prevailing party.

We do not believe that unfair or unconscionable acts were shown on the part of Corlett Motors. There being no violation of the Consumer Protection Act, Wahba was not wrongly denied his right to collect either punitive damages or attorney’s fees under the provisions of the act.

Punitive damages are ordinarily not recoverable in a breach of contract action. General Accident Fire & Life Assurance Corp. v. Judd, Ky., 400 S.W.2d 685 (1966). And an instruction on punitive damages is warranted, in any case, only where “ ‘the defendant has acted wantonly, or recklessly, or oppressively, or with malice as implies a spirit of mischief or criminal indifference to civil obligations.’ ” Louisville & Nashville Railroad Co. v. Jones Adm’r, 297 Ky. 528, 180 S.W.2d 555 (1944); Bisset v. Goss, Ky., 481 S.W.2d 71 (1972).

We believe that this is simply a breach of contract case. The allegations made by Wahba as to Corlett Motors’ alleged outrageous conduct are refuted by Wahba himself. He was denied the execution of the terms of a contract he thought existed. He filed suit; Corlett Motors defended and lost. Wahba was then compensated for breach of that contract.

A buyer is entitled to recover consequential damages when a breach occurs by the seller and the buyer secures substitute goods. KRS 355.2-712. KRS 355.2-715(2) states that consequential damages include “any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise.” (Emphasis ours). KRS 355.1-201(25)(c) states that “[a] person ‘knows’ or has ‘knowledge’ of a fact when he has actual knowledge of it.”

Besides not being properly pled, we do not believe that the items of consequential damages claimed are those which Corlett Motors had reason to know at the time the contract was entered into.

The judgment of the trial court is affirmed.

All concur.


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    Earl McGUIRE, Jr., Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    Oct. 6, 1978.

      David A. Lambertus, Louisville, for appellant.
    Robert F. Stephens, Atty. Gen., Robert W. Hensley, Asst. Atty. Gen., Frankfort, for appellee.
    Before HOWARD, HOWERTON and PARK, JJ.
   HOWARD, Judge.

Appellant, Earl McGuire, Jr., was convicted of first degree burglary, after a trial by jury, and sentenced to ten years confinement in the penitentiary. Appellant was charged with first degree robbery and first degree burglary. He was acquitted of the robbery charge.

Michael Mosher, the victim, stated that he was accosted by a man in his apartment about nine o’clock p. m. on September 16, 1976. He testified that he struggled with the assailant and that the assailant fled after his (the assailant’s) mask fell off. Nothing was taken from the apartment. Mosher gave a description of the assailant to the police and also described the car he fled in as a late model brown Ford or Mercury. Appellant’s car is a dark brown over light brown 1971 Ford.

Detective Chester Shaffner showed Mosh-er a “photo-pak” on December 12, 1976. Mosher did not make a positive identification at that time. However, Mosher requested to see the pictures again and on December 18, 1976, Mosher made a positive identification of appellant as the assailant. Mosher also identified appellant at a lineup on February 28, 1977, and at the trial. Appellant testified at trial and stated that he did not commit the crime.

Other trial testimony will be discussed as it relates to the errors raised by appellant on this appeal.

Appellant raises as his first error the statements made by the Commonwealth Attorney concerning the threatening phone calls Mosher received. The Commonwealth Attorney mentioned these threatening phone calls during his opening statement, asked Mosher on direct examination whether he had received any threatening phone calls, and referred to the calls in his closing statement. Mosher could not say who these calls were from. Counsel for the appellant strongly objected to the mention of the phone calls during the opening statement and the questioning of Mosher, but did not object during the closing argument.

In support of its contention that these comments and testimony about the threatening phone calls were proper, the Commonwealth states that it was only trying to strengthen Mosher’s ultimate identification of appellant. The remarks about the phone calls were made to show the jury that Mosher was afraid because of receiving them and that was why he did not positively identify the appellant on December 12, 1976. The Commonwealth states that it was made clear to the jury that it was not alleging the appellant had made the calls, but merely that the victim received them. These contentions made by the Commonwealth hold about as much water as a sieve. This Court questions who, other than the appellant, could the jury possibly assume made the phone calls. Moreover, the Commonwealth attempted to bolster Mosher’s testimony before it was impeached.

In Campbell v. Commonwealth, Ky., 564 S.W.2d 528, 531 (1978), the court reiterates the rule that “evidence that a witness has been threatened or otherwise influenced in an attempt to suppress his testimony is admissible in a criminal prosecution only where the threat was made by, or on behalf of, the accused.”

The admission into evidence that Mosher received threatening phone calls was error. Objections were made, no admonitions were given, and the jury heard about these calls at three different points in the trial. This error was clearly prejudicial to the rights of appellant and he is entitled to a new trial.

Since the appellant is to receive a new trial, we will briefly discuss the remaining errors raised by him since they may be relevant upon retrial.

The Commonwealth Attorney made two comments in his closing argument, being that the appellant said “something about being out there in that house” and that appellant had “a lot of time to do some drinking” before the incident occurred. There was no proof as to either of these statements in the record and these comments were improper.

Appellant’s counsel made two pretrial motions requesting the Commonwealth to produce any statements made by the appellant, including oral statements. The Commonwealth replied that there were no written statements made by appellant and that it was not required to produce oral statements. Detective Shaffner testified as to an oral statement made by appellant.

RCr 7.24 applies, by its wording, only to written or recorded statements. Although it may be unfair to exclude oral statements allegedly made by a defendant from this rule, this Court is without authority to hold that such oral statements are discoverable.

The next error relates to Detective Shaffner’s testimony about Mosher’s reaction to the appellant’s picture in the photo-pak. Shaffner testified that “Mosher’s eyes got larger” when he came to appellant’s picture. Based on this reaction, Shaffner testified that he could tell Mosher either recognized appellant’s picture or was shocked by it. Shaffner stated that when he feels strongly that one of the pictures is a suspect, he watches the victim’s face to see if there is recognition on the part of the victim.

The Commonwealth argues, in effect, that Shaffner is an expert concerning the reaction of victims in identifying alleged assailants and should be entitled to give his opinion on what certain physical reactions of victims mean. The Commonwealth likens this expertise to that of a drug user who testifies that a drug is what it purports to be.

Inasmuch as Shaffner’s testimony is intricately connected to the threatening phone calls and the attempt to bolster Mosher’s ultimate identification of appellant on December 18, we do not believe that Shaff-ner’s testimony of his “impression” as to why Mosher’s eyes got larger is admissible. We do not wish to establish a broad rule that police officers are competent to testify as to the meaning of a victim’s physiogenic reactions to pictures in a photo-pak.

The judgment of the trial court is reversed and the appellant is granted a new trial in accordance with this opinion.

All concur.


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    BLUE CROSS AND BLUE SHIELD OF KENTUCKY, INC., Appellant, v. Maude S. SMITHER, Appellee.
    Court of Appeals of Kentucky.
    Oct. 6, 1978.
    Joseph M. Day, Ronald L. Gaffney, Charles D. Barnett, Barnett & Alagia, Louisville, for appellant.
    Charles E. Carter, Owenton, for appellee.
    Before HOWARD, HOWERTON and PARK, JJ.
   HOWARD, Judge.

This is an appeal from a summary judgment entered in the Owen Circuit Court in favor of plaintiff-appellee, Maude S. Smith-er (hereinafter referred to as Smither), entitling her to recover certain benefits under the medical benefits plan of defendant-appellant, Blue Cross and Blue Shield of Kentucky, Inc. (hereinafter referred to as Blue Cross and Blue Shield). Blue Cross and Blue Shield argue that there was a genuine issue as to whether the entire period of Smither’s hospitalization was “medically necessary” and therefore properly payable under the medical benefits plan.

Smither, being a 63-year-old retired postal worker, was a subscriber to the Blue Cross and Blue Shield medical plan through the Federal Employee Program, Contract No. CS 1039. On August 13, 1975, Smither was admitted to the Owen County Memorial Hospital pursuant to the orders of her physician, Dr. Maurice Bowling. The admitting diagnosis was injury to the anterior chest wall and thoracic spine occurring as a result of a fall in her bathtub. Shortly after her admission to the hospital, she suffered a cerebral vascular incident with residual weakness of the right upper and lower extremities. On October 29,1975, Smith-er was discharged after 77 days of continuous confinement in the hospital, with the final diagnosis being sprain of the right anterior chest and thoracic spine, hypertension and cerebral thrombosis.

Smither thereafter filed a claim for benefits for the entire hospital stay of 77 days, which claim was submitted to the medical services review board of Blue Cross and Blue Shield. Subsequently, the claim was submitted to the Kentucky Medical Association Seventh Trustee Peer Review Committee (hereinafter referred to as the Peer Review Committee). Said Committee is an independent review board composed of physicians of various medical disciplines, who are not employees of Blue Cross and Blue Shield.

A review hearing was held by the Peer Review Committee, and the treating physician, Dr. Bowling, discussed Smither’s case with the Committee. The Peer Review Committee recommended that benefits be paid to Smither for hospitalization only for the period from August 13, 1975 through September 6, 1975. The Committee also recommended that the remaining period of hospitalization from September 7, 1975 through October 29,1975, was not medically necessary and benefits therefor should be denied.

The benefits for hospitalization were paid to Smither in accordance with the recommendations of the Peer Review Committee. She subsequently filed suit against Blue Cross and Blue Shield for payment of the remaining hospitalization period from September 7, 1975 through October 29, 1975.

The provisions of Contract No. CS 1039 provide that hospital services are covered only when “medically necessary” and that “[t]he fact that a physician may prescribe, order, recommend, or approve a service or supply does not, of itself, make it medically necessary or make the charge an allowable expense. . . .” Another provision of the policy specifically excludes hospitalization and physician services for convalescent, domiciliary and custodial care, rest cures, physical therapy and rehabilitation.

Both parties moved for summary judgment and submitted affidavits in support thereof. Blue Cross and Blue Shield submitted the affidavits of Branham B. Baugh-man, M.D., Chairman of the Peer Review Committee, and B. Frank Radmacher, M.D., Chief of the Medical Services Section of Blue Cross and Blue Shield. Both physicians stated in their affidavits that it was their opinion that Smither’s confinement in an acute hospital facility from September 7, 1975, through October 29, 1975, was not a medical necessity. Smither filed the affidavit of Dr. Bowling, the treating physician, who stated that it was his opinion that Smither’s hospitalization during the contested period was a medical necessity.

Blue Cross and Blue Shield contend that the affidavits submitted by both parties show there is a genuine issue of material fact, namely whether a portion of Smither’s hospitalization was medically necessary.

Smither contends that neither Dr. Baugh-man nor Dr. Radmacher should be competent to testify concerning the medical necessity of the contested hospitalization period since their only knowledge of same consists of having read her medical records at some period of time after the hospitalization. She states that the treating physician should decide the question of the medical necessity of hospitalization at the time the question arises and that his decision should always be controlling. Smither therefore concludes that the opinions of the non-treating physicians should be inadmissible and since there would then be no genuine issue as to any material fact, the summary judgment was properly granted.

CR 56 provides for the summary judgment procedure and CR 56.05 reads as follows:

Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. .

In Hill v. Fiscal Court of Warren County, Ky., 429 S.W.2d 419, 423 (1968), the court held that affidavits of experts were properly considered in support of a motion for summary judgment since their opinions expressed in the affidavits “would be admissible in evidence” within the meaning of CR 56.05.

And in Buckler v. Commonwealth, Ky., 541 S.W.2d 935, 940 (1976), the court adopted, as an exception to the hearsay rule, the rule that an expert may express an opinion based upon information supplied by third parties, which is not in evidence, but upon which experts customarily rely on in the practice of their professions. In Buckler, supra, the refusal by the trial court to allow an expert to express an opinion as to the appellant’s mental condition, based on appellant’s medical records and consultations, was held to be error.

In the instant case, Drs. Baughman and Radmacher based their opinions on the lack of medical necessity of the hospitalization period after reading Smither’s medical records. Their opinions would be admissible under Buckler, supra, and were properly submitted, under CR 56.05, by Blue Cross and Blue Shield in support of its motion for summary judgment.

Smither’s argument is, in essence, that the only medical advice the patient has concerning his hospital stay is that provided by the treating physician, and therefore his opinion should be treated as correct and not be subject to contradiction. We do not believe a treating physician should be placed in this unassailable position. One need only look to the Medicare and Medicaid System for alleged evidence of fraud which may occur on the part of doctors and other persons in the medical care professions, if their decisions are always assumed correct.

Since a large part of today’s rising medical costs are borne by organizations which offer medical benefits plans, such as Blue Cross and Blue Shield, we believe these organizations should be entitled to some measure of protection and should be allowed to challenge decisions made by doctors.

We do not, of course, decide whether Smither’s hospitalization during the contested period was or was not a medical necessity, but rather that a real issue does exist between the parties on that point. CR 56.03.

See Pennsylvania Life Insurance Co. v. Mattingly, Ky., 464 S.W.2d 632 (1971), where in an action by an insured against the insurer, the court held that a jury issue was created as to whether the insured, who saw a doctor two days after an accident, had shown his injury required “regular and personal attendance by a physician within 20 days” as stated in the insurance policy as a prerequisite to recovery. See also 81 A.L. R.2d 967 Anno.: Blue Cross-Blue Shield-Coverage, § 5, conditions covered and services provided, generally.

The summary judgment entered by the trial court is reversed and the trial court is directed to give the appellant a trial on the merits.

All concur.