author: HOWERTON, Judge.

text:
    EVERGREEN LAND COMPANY, Appellant, v. Lawrence GATTI, Appellee.
    No. 74-229.
    Court of Appeals of Kentucky.
    Opinion of March 11, 1977 Withdrawn.
    Opinion Reissued As Modified On Denial of Rehearing Aug. 12, 1977.

      William W. Lawrence, Lawrence & Lawrence, Louisville, for appellant.
    Bernard B. Davis, Handmaker, Weber & Meyer, Louisville, for appellee.
    Before HOWERTON, GANT and REYNOLDS, JJ.
   HOWERTON, Judge.

By written contract of July 18, 1972, Appellant agreed to sell and Appellee agreed to purchase a 3.01 acre tract of land for $165,000.00. By its terms, the contract stated, “Seller represents the site is presently zoned C — 1, Commercial.” In fact, 2.86 acres was zoned C-2, and .15 acre or approximately 5% of the tract was zoned R-4. Little significance is placed on the C-2 zoning. From the record it appears that the C-2 classification incorporated all allowable uses under C — 1. The controversy in this case, and the basis for Appellee’s rescission of the agreement, was the fact that a portion of the property was zoned R — 4 which imposed more restrictions on the property than C — 1.

The property in question was located on Shelbyville Road, and the price for the tract was based upon the front footage of the property on that road. The tract was rectangular in shape, except for a spur which extended into an adjoining parcel of land. The 2.86 acre rectangular-portion of the tract in question was zoned C-2, and the .15 spur had no frontage on Shelbyville Road, and it was otherwise land-locked.

On August 17, 1972, the Appellee made known to Mr. Thomas Fisher, president of Appellant’s corporation, that he would not accept title by reason of the discrepancy in the zoning. The Appellee testified that his only reason for not closing the transaction was the zoning discrepancy. He affirmed that there was no other condition in the contract which was not complied with by the Appellant. The Appellee also stated that he did now know the “spur” was a part of the land, and that he decided not to comply with the contract when he was informed by his attorney that there was a “wedge” in the property which was zoned R-4, rather than C-l. He did not know how much of the property was not zoned for commercial purposes, but he testified that he envisioned there was a “pie-shaped kind of formation . . .” that was zoned R-4 and that this formed a “pie-shaped kind of deal going right through the piece of property.” It was not until after he had tendered his cancellation of the contract that he discovered that it was only the “spur” that was zoned R-4.

All parties were aware of the fact that the property was the subject of a foreclosure action, and the property was subsequently sold at public auction on September 11, 1972.

Appellant brought suit to recover damages, namely the difference between the contract price and the price the land brought at the public auction. The only proof presented was that the property sold for $121,000.00 and that there was an additional $3,000.00 of court costs incurred because of the sale giving a total net loss to the Appellant of $47,000.00.

Conflicting evidence was presented as to whether or not the Appellee had knowledge of the R-4 zoning regulation prior to signing the contract. The Appellee had learned about the property through an advertisement and was otherwise represented by a real estate broker. The trial court, however, found that after the contract was signed “matters took their normal course until a point in time that it was discovered by the defendant, through his lawyers, that a small portion of the three acres, more precisely .15 acre, was zoned R-4, Residential.” The Appellant argues that the Ap-pellee’s allegations of misrepresentation had no basis because there existed substantial evidence that the Appellee was fully aware of the facts before he executed the subject’s sales contract. We must, however, take the finding by the court that the Appellee was not made aware of the R-4 zoning prior to executing the contract. Such a finding was not manifestly against the weight of the evidence.

The Appellant presents several arguments, but only one is decisive in this case. The Appellant argues that even if there was a misrepresentation within the written contract, such misrepresentation was not material. The trial court made no specific determination as to the materiality of the misrepresentation except to provide,

The written contract will stand as is, and the court will not tamper with its meaning. The contract speaks for itself .
By not accepting the various contentions of either side, the court will strictly rely on the contract itself.

This court will not attempt to decide in this case whether or not the misrepresentation regarding zoning was material or not. We do conclude, however, that the misrepresentation in this situation was not material per se. Generally, a misrepresentation regarding zoning will not be material per se unless the variance is such that the buyer will obviously be unable to use the property for its intended purposes. For a court to determine that a zoning discrepancy in a land contract is a material misrepresentation, it must make specific findings based upon evidence presented by an offended party seeking to rescind the contract or recover damages.

On several occasions the Kentucky Supreme Court has been faced with land purchase contracts in which the amount of land actually conveyed proved to be less than that, specified in the contract. The case of Wallace v. Cummins, 334 S.W.2d 904 (Ky.1960) is an example of the court’s adoption of a standard whereby the court has refused to allow relief for misrepresentation, unless the deficiency in the land described in the contract is more than 10% of the total land being conveyed. Both rescission and damages have been denied. See also, Parsons v. Lunsford, 21 Ky.Law Rep. 1536, 55 S.W. 885 (1900); Burkholder v. Farmers’ Bank of Kentucky, 23 Ky.Law Rep. 2499, 67 S.W. 832 (1902); and Page v. Hogan, 150 Ky. 726, 150 S.W. 801 (1912). The 10% rule, however, is based on the idea that in cases where sales are by the tract or where quantity is mentioned merely as descriptive the parties intended to take some risk on quantity. In other cases where the circumstances have made it plain that no risk was intended or could not be tolerated, or where sales were found to be truly by the acre, rescission or damages have been allowed. See, Anthony v. Hudson, 131 Ky. 185, 114 S.W. 782 (1908). An example of a situation where size could be vital and a variance material would be where a minimum size lot would be required for installing a septic tank. If a person purchased a lot to establish a dwelling where sanitation would require the installation of a septic tank, the purchaser should not be bound to the purchase contract, if the agreement called for conveyance of an amount of land equal to or greater than the minimum required and the area was deficient.

The Appellant argued that since the portion zoned R — 4 represented only 5% of the total area, rescission should not be allowed, because it would not have been allowed if the spur had not existed. Even though zoning may relate to quality, whereas size relates to quantity, there is merit in the Appellant’s argument. The evidence indicates that the Appellee based his price on the front footage facing Shelbyville Road. The Appellee did not even know the spur existed, and immediately prior to rescinding the contract, Appellee had a mistaken idea regarding the location of the R-4 area within the tract of land he was purchasing. The Appellee failed to investigate the facts for himself and relied primarily upon his agent and his attorney. Even the broker representing the Appellee testified as follows:

This spur is immaterial. This spur neither enhances nor detracts from the use that the gentlemen was going to put this property to. Now, you go by primeage and by depth, and you have a fluke here of a spur. That didn’t affect the way he was going to use it, not one bit.

It is elementary that a contract may not be rescinded unless the non-performance, misrepresentation or breach is substantial or material. The court does not look lightly at rescission, and rescission will not be permitted for a slight or inconsequential breach.

We will not speculate on whether or not a zoning change would ever have been granted, as was argued by the Appellant. Certainly, it could not have been accomplished before a transfer to the Appellee in light of the pending scheduled judicial sale. But, even assuming the zone could not have been changed, was the zoning discrepancy so material as to defeat the intended purposes for which the Appellee was buying the property? If the misrepresentation or mistake was not such as to defeat the object of the Appellee in making the agreement, then he should have purchased the property and sought damages for any provable diminution in value. The Appellee is now in the position where he must prove the materiality of the misrepresentation, and if he cannot prove such a fact by additional convincing evidence, the Appellee must be responsible for the reasonably foreseeable damages caused by his arbitrary rescission of the contract. We will leave the issue of materiality to be decided by the trial court on remand on the basis of all of the evidence.

As to the issue of damages, the Appellant claims $47,000.00. This was determined by deducting the foreclosure selling price of $121,000.00 from the contract price of $165,-000.00 and adding the selling cost of $3,000.00 to the difference. As authority for this method of computation, Appellant cites Davis v. Lacy, 121 F.Supp. 246 (E.D.Ky.1954). Regarding the subject of damages for breach of a real estate purchase contract, the Appellant cites that portion of the opinion which reads:

The damages recoverable under the defendant’s choice of remedy are measured by the difference between the purchase price which plaintiff agreed to pay and the amount received for the property at the second sale, and in addition “the cost and expense of the second sale.” (Citing cases)

The citation is a general statement of law, but in this case the mere difference between the contract price and the net selling price is not totally applicable.

The general test for measuring such damages is the difference between the contract price and the actual or market value at the time of the breach, provided actual value is less than the contract price, and plus any actual and related costs. See Graves v. Winer, Ky., 351 S.W.2d 193 (1961), and Furlow v. Sturgeon, Ky., 436 S.W.2d 485 (1968). If a resale is made under conditions comparable to the conditions under which the contract was made, and within a reasonable time after the breach, the resale price would certainly be evidence of actual value, and the difference would be a proper measure and element of damages.

The resale of this property was within a reasonable time after the breach. The breach occurred on August 17,1972 and the resale occurred on September 11, 1972. However, without supporting evidence to the contrary, a foreclosure sale is not comparable to a private sale nor is the selling price alone considered as competent evidence of actual or market value. The Appellant would need to prove the comparability. If this cannot be done, the question remains whether or not the Appellant may nevertheless recover all or substantially all of a loss such as in this case?

Where a large loss results from a rescission, the question of whether or not the misrepresentation prompting the rescission was material may still be in issue. But, the real question becomes whether or not the sizeable loss was caused by the zoning discrepancy or by some other reason, such as a resale by foreclosure? If the large loss was in fact caused by a misrepresentation relating to a 5% spur of land which was zoned R-4 rather than C-l, as advertised, then the misrepresentation was material enough to justify a rescission. On the other hand, if the proof regarding damages indicates little or no difference in value between the contract price and the actual value of the land due to a zoning variance, then the misrepresentation was immaterial, the rescission constituted a breach, and the Appellee should have completed the contract and sought damages rather than to arbitrarily rescind the contract and become liable to the Appellant for damages. For the foregoing reasons, the evidence regarding damages will be relevant and material to the trial court in determining the question of materiality of the misrepresentation.

The object of compensatory damages is to place the injured party in the same condition, so far as money can do so, in which he would have been if the contract had been duly performed. The injured party is entitled to all such damages as arise naturally from the breach of the rights which the contract was contemplated to assure. Graves v. Winer, supra. See also: Oleck, Damages to Persons and Property, §§ 80, 229, 237; pp. 59, 439, 448, and 77 Am.Jur.2d, pp. 614-617 (Vendor and Purchaser, §§ 489 and 491). Contracting parties do have rights, duties and liabilities between each other once they have entered into a contractual relationship. If, therefore, it is proven that the Appellee’s rescission of the contract was an unjustifiable breach, the measure of the Appellant’s damages may be all of the natural and foreseeable damages resulting from the breach up to a maximum of $47,000.00.

If the foregoing measure of damages is applied in this case, the Appellee may offset the damages by any amount proven to be a difference in the value of the property contracted for as zoned C-l and the value of the property as it existed as zoned C-2 and R-4, if the latter zoning produced a lesser value for the property than as advertised and contracted for. If the measure of damages is to be the difference in the contract price and the actual or market value, as stated above, the Appellee would not be entitled to any offset, as the basis for the offset, the zoning differences, would be considered in determining the contract and actual values.

We have held in this action that the zoning discrepancy was not material per se. The appellee, therefore, had the burden of proving that his breach was justified because of facts not in the record which would have proven that the discrepancy was material to him. Civil Rule 52.04 was added after the appeal was taken in this case. The new rule would bar this court from remanding this action to the trial court for a finding of fact regarding the issue of materiality, since such finding was not requested by the appellee during the previous proceedings. We do not believe this court is bound by the new rule in this particular appeal, and rather than merely reverse the action and remand it for a finding of damages, we feel that in fairness to the appellee he should be given an opportunity to prove in what way the zoning discrepancy in this contractual agreement was material enough to justify his breach.

The judgment is reversed and remanded for further proceedings consistent with this opinion.

All concur.


source: Caselaw Access Project

author: HOGGE, Judge.

license: Public Domain

text:
    Charles M. GREY and Leroy B. Moore, Appellants, v. Paul E. WILSON et al., Appellees.
    Court of Appeals of Kentucky.
    April 8, 1977.
    Discretionary Review Granted Sept. 13, 1977.

      Charles T. Walters, Winchester, for appellants.
    Thomas W. Miller, Miller, Griffin & Marks, Lexington, for appellees.
    Before HOGGE, COOPER and REYNOLDS, JJ.
   HOGGE, Judge.

This case arises from an action filed by the appellants seeking specific performance under a provision in a lease agreement entered into between the appellants and the appellees’ predecessor in interest which provided that, “Should lessor ever desire to sell the leased premises, lessees are given the right to purchase the same at the price which the lessor has been offered . .”. Appellees came to own their respective interests in the disputed property by will of Minnie Wilson, mother of Paul and Phillip Wilson, wherein she devised an undivided one-fourth interest to Phillip Wilson; an undivided one-fourth interest to Iness Wilson; and an undivided one-half interest to Paul Wilson. Phillip Wilson subsequently conveyed his interest in the property to Paul Wilson for $15,000.00. Appellant claims this transaction was in violation of his first refusal rights under the lease agreement.

Pursuant to a motion for summary judgment, the trial court ruled, as a matter of law, that the sale by appellee, Phillip Wilson, of his one-fourth interest in the leased premises to his brother, Paul Wilson, was not a “sale” within appellant’s first refusal rights under the lease. This appeal is from an accompanying order dismissing plaintiffs’ complaint.

This case presents two issues for resolution. First, was the lease agreement enforceable upon appellees? Second, was the transaction a “sale” within the meaning of paragraph 9 of the lease agreement?

It is well settled that the lessor of land has only a reversionary interest in the land. The successor in interest of the lessor can, of course, receive no greater interest in the land than that of the lessor. Anderson v. Island Creek Coal Company, 297 F.Supp. 283 (W.D.Ky.1969).

Furthermore, paragraph 13 of the lease agreement contains the following provision:

All terms, conditions or obligations contained in this lease shall inure to the benefit of the estate, heirs, grantees or assigns of any party herein.

It is, therefore, clear that the lease agreement was enforceable upon the appellees.

The next issue raised by this appeal is whether the transaction between Paul Wilson and Phillip Wilson was a “sale” so as to inure to appellants their first refusal rights?

Both appellants and appellees state that this case presents a question of first impression for this court, and urge that we adopt a rule of law to be applied to disputes of this sort. This court, however, is of the opinion that no new rule of law need be adopted. This dispute can be resolved by the application of well accepted rules of construction of contracts.

The “cardinal rule” of construction is, in the absence of ambiguity, a written instrument will be strictly enforced according to its terms. The words of a contract will be given their plain and usual meaning in the absence of evidence indicating the parties intended to assign a different meaning to the term in question. O’Bryan v. Massey-Ferguson, Inc., Ky., 413 S.W.2d 891 (1967); Cook United, Inc. v. Waits, Ky., 512 S.W.2d 493 (1974); Taylor v. Rosenthal, 308 Ky. 4, 213 S.W.2d 435 (1948).

The Circuit Court concluded the transaction, whereby Phillip Wilson conveyed his undivided one-fourth interest in the property to his brother, Paul Wilson, “was not a ‘sale’ in its normal meaning and . was not a ‘sale’ within the meaning of paragraph 9 of the lease agreement .” It is undisputed that consideration in the amount of $15,000.00 was paid by Paul Wilson to Phillip Wilson for the property and that a deed was duly executed and recorded to reflect the sale. According to Webster’s Dictionary, “sell” means “to give up (property) to another for money or other valuable consideration.” The transaction we are here concerned with certainly falls squarely within that definition.

We find no merit in appellees’ contention that “sell” was intended to mean a conveyance of an interest in the property to a person outside the lessors’ family. There can certainly be “sales” among members of a family. Furthermore, there is nothing in the instrument or in the record to indicate that the parties intended such meaning be attached to that term.

By this transaction, Phillip Wilson divested himself of all his interest in all the property; Paul Wilson acquired title to all of Phillip Wilson’s interest in all the property and a substantial, not nominal, consideration was paid. These are factors indicating the parties were dealing at arm’s length and thereby consummated a sale of an interest in real property. Additionally, we find no authority for, and no merit to, the appellees' contention that a transfer of less than all of the property is not a sale. To hold otherwise would allow the joint owners of this property, or any other owners so situated, to prolong and delay a sale ad infinitum.

This opinion does not address the questions of whether the lessees thereby attained the right to purchase an interest in the entire tract or whether their rights were limited to the leased premises; or, if lessees’ interest is limited to the leased premises, how to fairly apportion the total purchase price between that property which the lessees could attain no interest in, and the leased property, which the lessees may now seek to purchase.

These difficult questions, however, have not yet been decided by the lower court and, properly, were not raised in this appeal. This court, therefore, is constrained not to address those issues.

Accordingly, we hereby reverse the judgment of the Clark Circuit Court and remand the case to that court for further proceedings consistent with this opinion.

All concur.


author: WINTERSHEIMER, Judge.

text:
    H. J. WHITFIELD and Carrie Mae Whitfield, his wife, Appellants, v. H. R. CORNELIUS, Jr., Executor of the Estate of H. R. Cornelius, Sr., Deceased, Appellee.
    Court of Appeals of Kentucky.
    April 15, 1977.
    Discretionary Review Granted Sept. 13, 1977.

      William G. Deatherage, Jr., Hopkinsville, for appellants.
    W. E. Rogers, III, Hopkinsville, for appel-lee.
    Before MARTIN, C. J., and WILHOIT and WINTERSHEIMER, JJ.
   WINTERSHEIMER, Judge.

Appellee, H. R. Cornelius, Jr., Executor of the Estate of H. R. Cornelius, Sr., deceased, instituted this action to recover on a promissory note allegedly executed by the Appellants, H. J. and Carrie Whitfield. Appellants answered and denied execution of the note, counterclaimed against Appellee for money allegedly wrongfully taken by the deceased while in the employ of the Appellants, and demanded a jury trial. After discovery depositions, Appellants renewed their jury demand. The trial court denied the Appellants’ request and ordered that this case be tried by the court on depositions.

The crucial issue in this case is whether the trial court erred in refusing to allow a trial by jury.

This Court reverses the judgment of the trial court denying the jury trial and therefore does not decide the other issues raised on appeal.

The fundamental right to a trial by jury, when a proper demand is made, is recognized by the Kentucky Constitution in Section 7, and. incorporated into the Kentucky Rules of Civil Procedure, Rule 38.01. Civil Rule 39.01 gives the trial judge a limited discretion to remove a case from a jury in certain special instances only. CR 39.01(3) permits the trial court on its own motion to deny a jury trial where because of the peculiar questions involved, or because the action involves complicated accounts, or a great detail of facts, it is impracticable for a jury intelligently to try the case. The trial judge does not have broad and unlimited discretion to deny a proper jury demand. Such discretion must be exercised in strict conformity to the Civil Rules. The trial court’s findings must be supported by the evidence and must give substantial reasons for the exercise of such discretion. In this case the trial court’s findings are not supported by the evidence and the record. The simple statement that it is “impractical for a jury intelligently to try the case” is not sufficient. The pleadings and depositions in this matter indicate that the issues presented were simple and that the testimony did not prevent an intelligent jury review.

A suit based on a debt is clearly a “legal” action and triable by a jury, upon proper demand, as a matter of right. Brock v. Farmer, Ky., 291 S.W.2d 531 (1956). Brandenburg v. Burns, Ky., 451 S.W.2d 413 (1970). The Appellants also have a constitutional right to trial by jury on their counterclaim since it alleges conversion of money and is therefore considered to be a “legal” action. Shatz v. American Surety Co. of N. Y., Ky., 295 S.W.2d 809 (1956). Kentucky further recognizes that where legal and equitable issues are raised in the pleadings, the ease must be tried by a jury. B.F.M. Building, Inc. v. Trice, Ky., 464 S.W.2d 617 (1971).

Nowhere in the record does it appear that the trial court had a sufficient basis to determine that there were any peculiar questions, complicated accounts or involved facts which made it impractical for a jury to intelligently try this case.

Therefore, the judgment of the trial court is reversed and the case remanded for a new trial by jury on all the issues raised by the parties.

ALL CONCUR.


author: GANT, Judge.

text:
    Paul LITTLEFIELD, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    April 15, 1977.
    Discretionary Review Denied Sept. 13, 1977.
    Jack Emory Farley, Public Defender, Com. of Ky., Larry H. Marshall, Asst. Public Defender, Frankfort, for appellant. •
    Robert F. Stephens, Atty. Gen., George M. Geoghegan, III, Asst. Atty. Gen., Frankfort, Patrick H. Molloy, Com. Atty., 22nd Judicial Dist., Lexington, for appellee.
    Before MARTIN, C. J., and GANT and LESTER, JJ.
   GANT, Judge.

Appellant, Paul Littlefield, entered a plea of guilty in the Fayette Circuit Court to the charge of attempt to commit a felony, a misdemeanor, and was sentenced to twelve months imprisonment. This sentence was probated for a period of three years on Appellant’s motion.

Prior to entering the plea of guilty, Appellant had requested and obtained psychiatric testing to determine competency to stand trial. At a competency hearing held on July 5, 1973, Appellant was adjudged to be “competent to stand trial.”

Subsequent to entering the plea of guilty, Appellant filed a motion to set aside the judgment pursuant to Civil Rule 60.02, alleging that his guilty plea had been coerced and was involuntary. Thereafter, Appellant amended the motion to set aside judgment, adding the allegation that Appellant had been incompetent to enter a plea of guilty. The trial court set a hearing on Appellant’s CR 60.02 allegations to be held on May 13, 1976.

On May 13, 1976, Appellant failed to appear at the hearing. Appellant’s counsel appeared and attempted to convert Appellant’s failure to appear into a voluntary dismissal without prejudice, pursuant to CR 41.01(1). The Commonwealth was prepared to defend against Appellant’s allegations with subpoenaed witnesses present and objected to any dismissal without prejudice.

The trial court postponed decision on Appellant’s allegations and allowed Appellant ten days in which to state reasons for his failure to appear at the hearing. Appellant filed affidavits explaining his absence. However, the trial court determined that the affidavits did not sufficiently justify Appellant’s failure to appear.

On June 23, 1976, the trial court denied Appellant’s CR 60.02 motions to set aside the judgment. Also, the trial court ruled that a CR 41.01(1) dismissal without prejudice would not be appropriate. In its memorandum opinion, the trial court reasoned that,

when a motion under CR 60.02 is filed and comes on for a hearing, it cannot be withdrawn by the movant over the objection of the opposing party, but must either be sustained or overruled. .
In the absence of the defendant, the attorney for the defendant had no proof to offer to support the motion and the Court indicated that in absence of any proof that it would appear that the motion would have to be overruled. [Transcript of Record, p. 130.]

On this appeal, Appellant raises two issues. Appellant urges that, “The court below erred to Appellant’s substantial prejudice by overruling Appellant’s motion to set aside judgment brought under CR 60.02 since Appellant’s plea of guilty was involuntary due to his lack of the requisite mental competence.” Appellant’s second issue urges that, “The court below erred to Appellant’s substantial prejudice by refusing to dismiss Appellant’s CR 60.02 motion without prejudice.”

The thrust of Appellant’s first contention is that there is a higher standard of competence to plead guilty than to stand trial and that this higher standard was not met below. In the present case, Appellant’s competency to stand trial had previously been placed in issue, and Appellant had been found competent to stand trial. Appellant contends, however, that the subsequent guilty plea proceeding failed to adequately demonstrate a higher competency to plead guilty.

Appellant refers this Court to Sieling v. Eyman, 478 F.2d 211 (9th Cir. 1973), which contains language tending to support the proposition that competency to plead guilty involves a higher standard of competency than competency to stand trial. Sieling, supra, 478 F.2d at 214.

However, Sieling hardly stands alone or unopposed as the only authority on this issue. In fact, the Third Circuit specifically has held that no higher standard of competence is required to enter a guilty plea than to stand trial.

We do not think that a mental standard, different from that for trial competence, is required for a guilty plea. United States ex rel. McGough v. Hewitt, 528 F.2d 339, 342 (3rd Cir. 1976).

Kentucky has adopted the latter view, holding that competence to plead guilty and competence to stand trial are subject to the same strict standard. Short v. Commonwealth, Ky., 519 S.W.2d 828, 833 (1975). The Kentucky Rules of Criminal Procedure articulate this strict standard specifically in regard to competence to plead guilty.

The court . . . shall not accept the plea without first determining that the plea is made voluntarily with understanding of the nature of the charge. RCr 8.08.

See Lewis v. Commonwealth, Ky., 472 S.W.2d 65, 66-67 (1971), cert. denied 405 U.S. 1018, 92 S.Ct. 1299, 31 L.Ed.2d 481 (1972).

The record on this appeal discloses in detail the circumstances of Appellant’s guilty plea. The trial court thoroughly examined the voluntariness of Appellant’s plea and Appellant’s understanding of the charge with Appellant’s counsel. The trial court then examined these same considerations at length with Appellant. The trial court engaged in these examinations in recognition of the prior determination of Appellant’s competence to stand trial. At the same time, Appellant and Appellant’s counsel executed in writing a formal Waiver of Further Proceedings with Petition to Enter Plea of Guilty.

During these extensive guilty plea proceedings, the trial court had ample opportunity to observe Appellant to determine if there was any reluctance, misunderstanding, involuntariness, or incompetence to plead guilty. The record amply discloses that Appellant’s plea was entered voluntarily and with an understanding of the nature of the charge. Appellant’s guilty plea was properly accepted.

The second issue raised on this appeal is that the trial court erred in refusing to dismiss without prejudice Appellant’s CR 60.02 motion to set aside the judgment. The thrust of this issue is that, when Appellant failed to appear for the scheduled hearing on his CR 60.02 motion, Appellant was nevertheless entitled to have his motion dismissed without prejudice, pursuant to CR 41.01(1).

Civil Rule 41.01(1) provides a procedure for dismissing without prejudice “an action, or any claim therein.” Appellant’s CR 60.-02 motion for relief was not “an action, or any claim therein” within the meaning of CR 41.01(1), as clarified in Civil Rules 7.01 and 7.02 distinguishing between pleadings and motions.

In addition, the unavailability of the CR 41.01(1) procedure should have been especially evident where opposing counsel was present at the scheduled and noticed hearing fully prepared to defend against the movant’s motion, as actually occurred below.

The trial court properly denied Appellant’s motion for relief, and the trial court properly refused to grant the requested dismissal without prejudice.

The judgment is affirmed.

All concur.


author: HAYES, Judge.

text:
    REDKEN LABORATORIES, INC., Appellant, v. Louise M. WILSON, Appellee.
    Court of Appeals of Kentucky.
    April 29, 1977.
    Discretionary Review Granted Sept. 13, 1977.

      E. André Busald, Busald, Funk & Zevely, P.S.C., Florence, for appellant.
    William E. Johnson, Johnson, Judy & Gaines, Frankfort, for appellee.
    Before HAYES, HOWERTON and REYNOLDS, JJ.
   HAYES, Judge.

This is an appeal of a judgment entered in Gallatin Circuit Court awarding appellee, Louise Wilson, $30,245.00 in damages for the negligent treatment of her hair.

On November 7, 1973, appellee went to a beauty shop in Warsaw, Kentucky, operated by Della Johnson. She wanted to have her hair frosted. Frosting requires an application of peroxide and bleach which lightens the hair. As a result of leaks in the protective cap used in this process, appellee’s hair became spotted with areas of orange. Realizing that something was wrong, Della Johnson called her former employer, Marvin Stewart, for assistance. When Marvin arrived, he and Della decided to place a tint on appellee’s hair to restore the color. This process also involved placing peroxide on the hair. The tinting process, however, caused appellee’s hair to be darker than before. Since this problem had arisen, Marvin and Della felt that it would be best to call the manufacturer, Redken Laboratories, for assistance.

Upon request by its distributor, appellant Redken Laboratories, set up an appointment with Della Johnson for December 10, 1973. During the time between November 7th and December 10th, Della Johnson placed four protein treatments upon appel-lee’s hair. This process dries out the hair according to appellant’s expert. The person sent by appellant to Della Johnson’s shop was Nancy Scobee. Nancy Scobee understood that she was to perform a color show at Della’s. When she arrived on December 10,1973, she was surprised to find that she was requested to correct certain problems; among those was appellee’s hair. Thereafter, Nancy Scobee proceeded to again frost appellee’s hair. She placed a solution upon the hair which remained there for some forty-five minutes. This solution contained peroxide.

According to Della Johnson, after this treatment was finished, appellee’s hair began to break. This testimony was refuted by Nancy Scobee, who stated that the hair was normal. Nevertheless, during the three days following this treatment appel-lee experienced extensive breaking. Appel-lee’s doctor stated that this breaking possibly was the result of a chemical process. Eventually the breaking affected most of appellee’s hair and she was left with hair which was one-quarter to one-half inch long. Since her hair was so short appellee began wearing wigs constantly.

This condition was only temporary and eventually appellee’s hair grew back. Ap-pellee filed suit originally against Della Johnson and Redken Laboratories. Prior to trial, however, appellee dismissed her claim against Della Johnson and proceeded against appellant only. After hearing the evidence, the jury returned a verdict awarding appellee $245.00 in special damages and $30,000.00 for mental anguish.

Appellant contends that the negligence of Nancy Scobee cannot be imputed to appellant since the facts do not disclose an employer-employee relationship. As authority appellant cites the case of Sam Horne Motor and Implement Company v. Gregg, Ky., 279 S.W.2d 755 (1955). That case set forth the nine most important factors to be considered in determining if one is an employee or an independent contractor. In light of these factors, appellant argues that the relationship between Sco-bee and Redken Laboratories was that of an independent contractor. There are, however, certain factors among the nine listed which are controlling, Turner Construction Company v. Garrett, Ky., 310 S.W.2d 786 (1958). This court is of the opinion that these controlling factors listed in that case are present here. As a part of the evidence below, appellant introduced the Membership Agreement between Sco-bee and the appellant. This agreement reveals that Scobee wa3 required to go and perform her services wherever and whenever Redken Laboratories desired. In addition, Scobee was subject to termination at any time. This court, therefore, affirms the holding of the lower court denying appellant’s motion for a directed verdict based on this issue.

If Scobee is an employee, appellant then argues that she acted outside the scope of her employment when she worked on appel-lee’s hair. Again appellant points to the agreement and states that it does not authorize her to perform this type of activity. Section 4(c) of the Membership Agreement sets out the following: “Member shall be available in person or by phone to accurately answer questions from and generally advise jobbers, cosmetologists and/or barbers and others on Redken’s products and procedures, . . . .” Della Johnson and Marvin Stewart made a request for such advice. Nancy Scobee was required to go to Warsaw to assist them with their problem, although she was unaware of the true nature of her visit. As a logical extension of advising customers, Nancy Scobee undertook the procedure herself. Clearly, this activity was within the scope of her employment.

Appellant’s next argument is that there was insufficient evidence to sustain a finding that the activities of December 10,1973, were the cause of appellee’s problem. Appellant contends that appellee’s doctor was unable to state that the treatment on December 10th was related to appellee’s problem and absent such testimony there is no evidence of causation. This court is of the opinion that there was sufficient evidence of causation. Della Johnson testified that the frosting substance was applied to appel-lee’s hair for a very lengthy time. Appellant’s expert had testified as to the effect of chemicals on the hair and Nancy Scobee stated that the hair was not in good shape prior to her actions. With this evidence in mind, it is apparent that the judge was correct in denying appellant’s motion for a directed verdict based on causation.

Appellant’s final contention concerns the excessiveness of the verdict. The Court of Appeals has set forth the test for excessive damages in L & N Railroad v. Mattingly, Ky., 339 S.W.2d 155 (1960) and other excessive damages cases. In framing the issue presented, this court paraphrases the test stated in Mattingly — whether a verdict of $30,000.00 for mental anguish strikes the mind at first blush as having been given under the influence of passion or prejudice. (Emphasis added). This verdict does so strike this court. There was no evidence of lost wages, pain or diminished earning capacity. There was little permanent damage, according to appellee’s doctor, and all of the evidence indicates that through proper care appellee’s hair will once again be normal.

Appellant has requested a change of venue upon return of this case to the lower court. This is not the proper court for such a request, KRS 452.010. In addition, it appears that such a request has not been timely made, Miller v. Watts, Ky., 436 S.W.2d 515 (1969) and Pierce v. Crisp, 267 Ky. 420, 102 S.W.2d 386 (1937). This decision does not preclude appellant from making the necessary motion upon remand.

This case is reversed in part and remanded for a new trial on the issue of damages only.

All concur.


author: HOWARD, Judge.

text:
    Rebecca Ann MILAM, An Infant, By Her Next Friend, Leslie D. Aberson, Appellant, v. SEARS, ROEBUCK & COMPANY and Otis Elevator Company, Appellees.
    Court of Appeals of Kentucky.
    May 20, 1977.
    Discretionary Review Granted Sept. 13, 1977.
    William A. Miller and Leslie D. Aberson, Louisville, for appellant.
    C. Alex Rose and Charles E. Theiler, II, Louisville, for Otis Elevator Co.
    John P. Sandige, Woodward, Hobson & Fulton> Louisville, for Sears, Roebuck & Co.
    Before HOWARD, LESTER, and WIL-HOIT, JJ.
   HOWARD, Judge.

The sole question presented by this appeal is whether a plaintiff-appellee whose appeal has been affirmed can collect the penalty of 10% from each of two appellant-defendants.

The plaintiff-appellant, hereinafter called “Milam” received a joint and several judgment against Sears, Roebuck and Company, hereinafter called “Sears”, and Otis Elevator Company, hereinafter called “Otis”. The judgment was in the amount of $10,-551.75 and same was superseded by both Sears and Otis by the means of separate bonds as each filed separate appeals. The judgment was affirmed by the Supreme Court of Kentucky and after the mandates issued Otis paid the judgment in full including interest and the 10% penalty.

Milam sought to collect the 10% penalty on the Sears bond but the trial court found against Milam. The reason for this decision seemed to be based upon the proposition that since this is a penalty statute it should be narrowly construed so as to limit Milam’s recovery to only one penalty.

Unfortunately, there is no persuasive authority one way or another on this point. The pertinent statutes are as follows:

1. KRS 446.020 Singular includes plural — Masculine includes feminine.
(1) A word importing the singular number only may extend and be applied to several persons or things, as well as to one person or thing, and a word importing the plural number only may extend and be applied to one person or thing as well as to several persons or things.
(2) A word importing the masculine gender only may extend and be applied to females as well as males. (457)
2. KRS 21.130. Damages upon affirmance.
Upon the affirmance of an appeal, or the dismissal of an appeal after it has been docketed in the Court of Appeals, where the appeal is from a judgment for the payment of money, the collection of which, in whole or in part, has been superseded, as provided in the Rules of Civil Procedure, ten per cent damages on the amount superseded shall be awarded against the appellant. (C.C. 764: amend. & trans. Acts 1952, ch. 84, § 35.)

It would appear that the proper statutory construction would be that the penalty statute means appellants rather than just one appellant. Therefore, there could be only one recovery in a case of joint and several liability. Of course, a different result may be required where there is a judgment against multiple defendants that resulted from separate and not necessarily related claims. However, we do not decide this point here.

The judgment of the trial court is affirmed.

All concur.


text:
    HIGHBAUGH ENTERPRISES INCORPORATED, Appellant, v. DEATRICK AND JAMES CONSTRUCTION COMPANY, Terry L. Davis and Betty M. Davis, Appellees.
    Court of Appeals of Kentucky.
    May 20, 1977.
    Discretionary Review Denied Sept. 13, 1977.

      Harold W. Thomas and M. Larry Miller, Miller & Thomas, Louisville, for appellant.
    Harry L. Hargadon, Jr., Hargadon, Leni-han & Harbolt, Louisville, for appellees Terry L. and Betty M. Davis.
    Deatrick & James Const. Co. not represented by counsel.
    Before HOWARD, LESTER and WIL-HOIT, JJ.
   HOWARD, Judge.

This is a case involving a restrictive covenant contained in a deed from plaintiff-appellant Highbaugh Enterprises Incorporated, hereinafter referred to as “Highbaugh” to defendants-appellees Terry L. Davis and Betty M. Davis, hereinafter referred to as the “Davises”. Deatrick and James Construction Company was the contractor for the Davises.

The pertinent provisions of the restrictive covenant are as follows:

Page 1
WHEREAS, it is desirable to protect said subdivision by appropriate restrictions as to the use and improvement of the property therein and to make said subdivisions more desirable for residential purposes,
1. All lots shall be known and described as residential lots and shall be used only for residential purposes.
2. No structure shall be erected, altered, placed or permitted to remain on any lot in the subdivisions except a single private dwelling or residence designed for the occupancy of one family .
Pages 8-4, par. 4, Sentences 4-5
In addition to these specific requirements all (a) construction plans; (b) building specifications, including the materials used; (c) a plan showing the grade elevation and site location of the structure on the lot; (d) the location, plans and specifications for any driveways; (e) a sample of the brick or stone; shall be submitted to the Developer or such agent or successor as it may designate and are all subject to the approval in writing of Developer or such agent or successor as it may designate. As to Lots 515 through 538 (both inclusive) and Lots 546 through 560 (both inclusive) in said subdivisions a landscaping plan showing trees, shrubs and other plantings shall also be submitted to Developer or such agent or successor as it may designate and such plan is subject to the approval in writing of Developer or such agent or successor as it may designate.

The Davises built a concrete parking pad on the front end of their lot to which High-baugh objected to as being in violation of the aforementioned restrictions. The Da-vises did submit a landscaping plan to the committee that oversaw these matters for Highbaugh but same was rejected by the committee. The Davises refused to alter this plan and proceeded to construct the pad. Highbaugh filed suit and was granted a temporary restraining order which stopped the construction.

The trial court concluded, after hearing all the evidence, that the Davises were not in violation of the restrictions as the pad was not a “structure” and the landscaping provision applied only to trees and shrubbery. The trial court held that restrictive covenants, such as those in this case, had to be strictly construed against the party who seeks the impediment.

We think that this was a misapplication of the law. Ever since the case of Brandon v. Price, 314 S.W.2d 521 (Ky.1958) was decided, Kentucky has approached restrictive covenants from the viewpoint that they are to be regarded more as a protection to the property owner and the public rather than as a restriction on the use of property, and that the old-time doctrine of strict construction no longer applies.

It is clear that the intention of the parties, as shown by the provisions of the Deed of Restrictions quoted above, controls and that the Appellees, Davises, were required to submit all of their proposed plans for construction and/or location of improvements on their lot to appellant for its approval. Moreover, the Deed of Restrictions clearly permits appellant to disapprove those plans if it determines that the proposed plans would make the subdivision less desirable for single family residential purposes. Parking facilities, such as the one here in issue, containing a parking pad and the integrally connected surrounding walkway together with associated bushes and other plantings clearly falls within the scope of this requirement.

Also, the provision of the deed as to landscaping should not be so strictly construed as to limit the scope of the landscaping plan to only trees, shrubs, and other plantings. We think that the landscaping plan must also show such other construction as would reasonably relate to landscaping as that term is generally accepted, which would include a parking pad.

Accordingly, we hold that the decision of the committee was not arbitrary or unreasonable and that the trial court should have upheld same.

This case is reversed for further proceedings consistent with this opinion.

ALL CONCUR.


author: LESTER, Judge.

text:
    Dorcas Annette WILLIAMS, Appellant, v. Claude B. WILLIAMS, Appellee.
    Court of Appeals of Kentucky.
    July 1, 1977.
    Rehearing Denied Aug. 26, 1977.

      Carroll W. Morrow, Moore, Morrow & Frymire, Madisonville, for appellant.
    Richard (Dick) Wayne Adams, Adams & Massamore, Madisonville, for appellee.
    Before COOPER, LESTER and WHITE, JJ.
   LESTER, Judge.

Claude B. Williams and Dorcas Annette Williams in contemplation of their divorce, executed a contract in which they agreed to custody, support, maintenance and a division of property. The court incorporated this contract into the divorce decree on March 29, 1973. On May 12, 1975, Claude moved the court to modify the decree to lessen the financial burden it placed upon him. Dorcas, in a counter motion, sought more child support. The court terminated the $750.00 monthly maintenance to Dorcas, raised the child support from $150.00 per month for each of the three children to $200.00 and allowed Claude to claim the children as dependents for income tax purposes.

Dorcas in this appeal, argues that the circumstances have not changed so as to provide the chancellor with power to modify the decree pursuant to KRS 403.250(1) and that the court did not have the authority to alter their agreement by permitting Claude to claim the children as dependents on his tax returns.

The parties married in August of 1958. At the time, both attended Auburn University. Appellant had completed two years of college. She quit school and worked for two years while the appellee finished his studies at the school of Veterinary Medicine. After graduation, they moved to Madisonville where appellee went to work for a veterinarian. Appellee purchased the veterinary clinic from his employer and became the sole veterinarian in Hopkins County. In 1972, appellee negotiated the construction of a Hardee’s restaurant at the location of his veterinary clinic. He purchased an adjoining house and lot for parking. He then acquired a two and one-half acre tract of land across town where he built another clinic. The building venture in 1972 of Hardee’s and the new clinic required him to assume a large indebtedness. During this time, the marital problems that the parties experienced culminated into a petition for divorce. They entered into an agreement settling their affairs. They reconciled briefly, but went ahead with the divorce in 1973. The agreement incorporated into the judgment remained basically the same as the one they arrived at in 1972. Apparently, increased competition from other veterinarians who had moved into the area and mounting indebtedness caused ap-pellee’s financial fortunes to wane. He found it necessary to open another veterinary clinic in Central City where he works three evenings a week after regular office hours. Appellant on the other hand, has done better. She seems to have formed a lasting relationship with a gentleman of some means whom she hopes to marry. She now has a savings account of $6,000.00 and a $2,600.00 checking account. Because of the generosity of her friend, she leads an active social life and maintains herself and her children in a comfortable fashion. She does not work.

As demonstrated by the numerous volumes of evidence, the parties strenuously contested whether the circumstances justified modifying the contract embodied in the judgment of their divorce. Appellee’s income tax returns for 1973 and 1974 do show a decline in his net profit from the clinic. However, it appears that the net profit for 1975 was greater than 1972. Appellee claims that this increase is deceptive because he uses the cash rather than the accrual method of accounting and his accounts payable have grown considerably. The parties presented a wide discrepancy in proof on the valuation of appellee’s property, his other income and the assessment of his liabilities. The characterization of ap-pellee’s financial condition as good or bad depends on whose figures one believes. The chancellor made the determination that appellee’s economic position deteriorated and substantial evidence supports this decision.

Appellant complains of the court’s not sustaining her objection to the testimony of appellee’s valuation witnesses and accountant. But appellant failed to obtain a ruling by the lower court. Consequently, she waived the objection and we cannot consider the competency of the evidence on appeal. Commonwealth Department of Highways v. Parker, Ky., 388 S.W.2d 366 (1965).

The inquiry does not end with a finding that the parties respective pecuniary situations have not remained static since they arrived at an understanding on the terms of their divorce. In accordance with KRS 403.250(1), there must be “a showing of changed circumstances so substantial and continuing as to make the terms unconscionable.” With the correct standard in mind this case becomes a lot closer. Wilhoit v. Wilhoit, Ky., 506 S.W.2d 511, 513 (1974) defines unconscionable as used in the statute as “manifestly unfair or inequitable.” While the unconscionability criterion “does not introduce a novel standard unknown to the law”, its application has generally operated to free a party from his obligation under a sales contract. Williams v. Walker—Thomas Furniture Co., 121 U.S.App.D.C. 315, 350 F.2d 445 (1965) contains a complete discussion in this regard. In the case before us, because the circumstances have changed so that the terms of the contract have become unreasonably favorable to the appellant, coupled with the likelihood that the present status of the parties will continue, the chancellor could properly eliminate the maintenance provision.

The court below did not exceed its authority by allowing the appellee to claim the children as dependents. We believe that this tax break because it results in a cash savings is an element of maintenance or support; therefore, KRS 403.250(1) enables the court to adjust the contract as to which party can list the children as dependents.

The judgment is affirmed.

All concur.


author: WILHOIT, Judge.

text:
    Frank ANDERSON, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    Aug. 12, 1977.

      Jack Emory Farley, Public Defender, Kevin M. McNally, Asst. Public Defender, Frankfort, for appellant.
    Robert F. Stephens, Atty. Gen., Deedra Benthall-Nietzel, Asst. Atty. Gen., Frankfort, for appellee.
    Before HOWERTON, REYNOLDS, and WILHOIT, JJ.
   WILHOIT, Judge.

Appellant, Frank Anderson, was indicted by the Owsley County Grand Jury on two charges of forgery in the first degree. On trial by jury he was found guilty of second degree forgery (KRS 516.030) on one charge and not guilty on the other. His punishment was set at confinement for one year and a day. Anderson appeals.

The appellant’s first assignment of error is that the trial court should not have admitted into evidence a photocopy of the check he was convicted of having forged. He contends that at the time this copy was admitted into evidence there had been no showing by the Commonwealth that the original check was unavailable. The Commonwealth concedes no such showing was made prior to the introduction of the copy but argues that sufficient evidence was supplied later to cure this defect.

Under the rule set out in Rachel v. Commonwealth, Ky., 523 S.W.2d 395 (1975), we believe the proper inquiry should not be whether there was sufficient proof of the unavailability of the original check, but whether the document introduced into evidence was sufficiently proved to be a photocopy of that check. In Rachel, the Court was concerned with the admissibility of a thermofax copy of a confession. An officer testified that he had been present when the confession was made and that the copy, which was made from the original in his presence, was a true and exact copy of the original. The Court held that the copy had been properly admitted into evidence since a photocopy should be treated as a duplicate original in the absence of some showing that the copy was altered or otherwise not accurate. No explanation of the failure to produce the original was required.

In this case the evidence relating to the authentication of the photocopy was elicited by the prosecutor upon showing the copy to the clerk who had cashed the check and asking the clerk: “[h]ave you ever seen a check which that is a copy of before?” The clerk answered in the affirmative and stated that the check had been given to her by the appellant on or about May 3,1975. She also stated that the check was in the amount of $30.00 and that it was drawn on the account of Sophia Stepp at the Farmers State Bank. The photocopy was of a check dated May 3, 1975, made payable to the appellant in the amount of $30.00, and drawn on the account of Sophia Stepp at the Farmers State Bank. Sophia Stepp was also shown the photocopy and asked if it were an exact copy of the original check drawn on her account. It is unclear from the record whether her affirmative answer was to this or to an intervening question. She did testify, however, that the appellant told her that if she would drop the charges against him on the $30.00 check he would “never do it again.”

There was no evidence as to who made the photocopy or when it was made. No evidence was introduced to show that the photocopy was not an authentic copy of the forged check. We believe that under the circumstances of this case it was not reversible error to admit the photocopy into evidence. The testimony of the clerk who took the check, identifying the photocopy as a copy of the check she took, together with her description of that check, sufficiently authenticated the photocopy. It would certainly be better practice to make some showing of how and by whom the copy was made. Under different circumstances failure to do so might well be deemed reversible error.

During the course of cross-examination, appellant was asked by the prosecution to write the name “Sophia Stepp” a number of times. This writing was then introduced into evidence over his objection. He complains that its introduction violates his rights under the fourth and fifth amendments to the United States Constitution, as well as KRS 422.120. In Francis v. Commonwealth, Ky., 468 S.W.2d 287 (1971), the Court considered these same arguments and resolved them contrary to appellant’s position here. There is, further, no merit in appellant’s argument that the handwriting sample given by him is of a communicative nature, thus falling within the protection of the fifth amendment. United States v. Mara, 410 U.S. 19, 93 S.Ct. 774, 35 L.Ed.2d 99 (1973). Only the physical characteristics of his handwriting were obtained, not the answers to questions. Even if this were not so, however, the appellant by taking the stand had waived his privilege not to answer questions which might incriminate him.

Appellant also insists that his conviction should be reversed because of improper and prejudicial remarks made by the prosecutor during closing argument. While conceding that no objection was made at trial to these remarks, appellant nonetheless asks that we consider this argument because, taken together, the remarks were so prejudicial as to result in a manifest injustice requiring a new trial. Stone v. Commonwealth, Ky., 456 S.W.2d 43 (1970). We have considered the remarks and the entire record and do not believe that this case comes within the purview of either Stone, RCr 9.26, or CR 61.02.

The judgment is affirmed.

ALL CONCUR.


author: HOWARD, Judge:

text:
    Robert SCHLEICHER, Appellant, v. Thomas GENTRY, Appellee.
    Court of Appeals of Kentucky.
    Aug. 12, 1977.

      Robin Griffin, Miller, Griffin & Marks, Lexington, Porter R. Draper, Elsie C. Draper, Gable, Gotwals, Rubin, Fox, Johnson & Baker, Tulsa, Okl., for appellant.
    Shouse, Houlihan & Burrus, Lexington, for appellee.
    Before HAYES, HOWARD and WIN-TERSHEIMER, JJ.
   HOWARD, Judge:

The plaintiff-appellant Schleicher owned two thoroughbred mares, namely Double Chocolate and Miss Caesar. Both of these mares were duly registered with the Jockey Club in New York which customarily, and by agreement of thoroughbred owners throughout the country, controls the important task of registration of thoroughbred horses and the issuance of the proper papers for foals. It appears that Miss Caesar was a valuable mare mainly because one of her foals had become a big money winner. Double Chocolate was not very valuable.

By some means or another, Schleicher or his agents, mistakenly sold Miss Caesar as Double Chocolate at the Keeneland sales in the fall of 1974 for $2700. In January of 1975 they compounded the mistake by selling Double Chocolate as Miss Caesar at the Keeneland sales for $50,000. The purchaser at the latter sale was defendant-appellee Thomas Gentry. Mr. Gentry, without question, is one of the outstanding thoroughbred breeders in the country. The facts are undisputed that both of these mares were in foal to Old Bag and that Gentry caused his mare to be bred back to the great stallion Graustark shortly after the birth of the foal from Old Bag. The stud fee paid by Mr. Gentry was $35,000.00. All the while, Mr. Gentry was contemplating a foal to be born of the mating of Miss Caesar and Graus-tark. It was not until August of 1975 that Mr. Gentry checked the identification in his mare’s mouth in order to have the papers properly prepared for the Jockey Club for the mare and foal. It was established that it was the common and accepted practice in the industry to make these checks in August. In any event, the mistake on the part of plaintiff-appellant was discovered and this litigation followed.

The trial court heard this case without the intervention of a jury and found for defendant-appellee in the total amount of $172,300.00. Of this total amount, $47,-300.00 was awarded for the difference in the value of Double Chocolate and Miss Caesar as represented by their respective sale prices referred to above. Also, the trial court awarded to Gentry the $125,-000.00 for loss of profits and this amount included the $35,000.00 stud fee.

It seems to this court that Schleicher could have reasonably foreseen that Miss Caesar would have been purchased by a person such as Mr. Gentry for breeding to a good stallion such as Graustark, and that a substantial fee would be paid for this service. Also, he could have reasonably foreseen that his negligence and breach of the express warranty of identification would entitle the purchaser to damage for the difference of the sale price as between Miss Caesar and Double Chocolate. However, we do not believe that the law imposed upon him the duty to guarantee to a purchaser of his mare at an auction sale that the purchaser would receive a premium price or any price for that matter, for a foal conceived in the future, born in the future, and sold in the future.

In discussing the matter of future damages or profits in 22 Am.Jur.2d Damages § 174 at 247 (1965), the case of Emerson v. Pacific Coast and N. Packing Co., 96 Minn. 1, 104 N.W. 573 is referred to and the following language is quoted:

It has been said that four principal considerations have been recognized and applied, namely: (1) How far the contract under consideration specifically provides for the award of damages for prevented gains upon its breach or reasonably implies such an award as a necessary effect of a natural construction of its terms; (2) the degree of certainty with which the harm can be traced to the wrongful conduct complained of as its legal cause; (3) the extent to which the inherent difficulties and uncertainties of calculating the amount of prevented gains render the measure of damages speculative and untrustworthy; and (4) the possibility of applying to the controversy some more satisfactory standard of compensation.

In applying the above principles to this case, it is evident to us that the court’s finding as to future profits was clearly erroneous as a matter of law since Schleicher’s responsibility for same was based upon evidence that was speculative, remote, and uncertain.

The judgment is affirmed as to the $47,-300.00 award for the difference in sale price and the $35,000.00 stud fee; but the judgment is reversed as to future profits. The trial court will enter a judgment in conformity with this opinion.

ALL CONCUR.


text:
    Ruth R. COBB, Appellant, v. Wilk HOSKINS, Appellee.
    Court of Appeals of Kentucky.
    Aug. 12, 1977.

      William G. Reed, Jonesville, for appellant.
    William P. Threlkeld, Williamstown, for appellee.
    Before HAYES, HOWARD and WIN-TERSHEIMER, JJ.
   WINTERSHEIMER, Judge.

This appeal is based on a complaint by the appellant seeking $1,661.03 from the appellee arising from an alleged sharecrop rental agreement for the cultivation of one acre of tobacco. In the spring of 1974 Harry Cobb, husband of and agent for Ruth Cobb, the appellant, sought out the appellee and after some discussion it was agreed that the appellee would raise approximately one acre of tobacco on the land owned by the Cobbs during the 1974 growing season. Mr. Cobb says that it was his intention that Mr. Hoskins would receive one-half of the net proceeds and the other half would go to the appellant, Ruth Cobb. The appellee says that it was his understanding that he would receive all of the net sales price of the one acre of tobacco in return for other work he was to do on the farm. There is no dispute that additional work was performed by the appellee; that neither of the parties kept any records of the time of the appel-lee; that the appellee did not make any claim for the work; and that the appellee lived in a house on the property of the appellants. At trial appellant/plaintiff offered instructions which were refused by the court. The trial court gave its own instructions and based on Instruction No. 3 the jury returned a verdict against the plaintiff. This appeal followed.

The question presented is whether the instructions given by the trial court were correct statements of the law of the case and whether the objection to them was properly preserved.

This Court reverses the judgment of the trial court.

The appellant challenged the propriety of Instruction No. 3, a meeting of the minds instruction, in that it did not fully state the law concerning the making of contracts. Although the full text of the objection contains surplus language relating to the station and rank of the parties, it is clear enough to this Court that an objection was made and that the objection was continued in a motion for new trial.

This Court recognizes the necessity to have a specific objection to the giving of or failure to give instructions at the trial level, so as to properly preserve error for appeal. The purpose of Rule 51(3) is to obtain the best possible trial at the trial court level. Certainly, the trial judge should receive every assistance in fairly submitting the proper issue to the jury. The purpose of instruction is to fairly present to the jury the legal issues involved. Former Court of Appeals Commissioner Watson Clay in his comments on Rule 51(3) indicates that an important consideration should be the protection of the parties’ rights to a fair trial when counsel in good faith attempts to question the substance of the instructions. W. Clay, 7 Kentucky Practice, CR 51(3) (3d ed. 1974). Commissioner Clay goes on to say that if the claimed error is material and obvious, counsel should not be required to elaborate on the grounds of his objection.

The record further indicates that the appellant/plaintiff submitted instructions which were refused by the trial judge. Where instructions offered by the plaintiff clearly present her position, no specific objection to the trial court’s refusal thereto was necessary to preserve the right to appeal the instructions given to the jury by the court. Fields v. Rutledge, Ky., 284 S.W.2d 659 (1955); 58 A.L.R.2d 210. In this instance the clarity of plaintiff’s offered instruction, as well as his objection, was marginal at best.

Clearly here Rule 61.02 has applicability. A palpable error which affects the substantial rights of a party may be considered by the appellate court even though insufficiently raised or preserve for appellate review. Such relief is available only if a manifest injustice has resulted from the error. In applying this rule, the palpable error must result from action taken by the court rather than an act or omission by the attorneys or the litigants.

In this situation the refusal of the trial court to accept the plaintiff’s tendered instruction, coupled with its own erroneous Instruction No. 3, resulted in a manifest injustice. The purpose of instructions to the jury is to give that body the opportunity to select the appropriate law to be applied to a factual situation. That opportunity was not fully provided in this case.

In this situation it appears to this Court that the law relating to sharecrop rental arrangements for tobacco farming was not fully presented to the jury by the trial court’s Instruction No. 3. It is fundamental that a right to land implies a right to the profits accruing therefrom. Green v. Biddle, 21 U.S. 1, 8 Wheat. 1, 5 L.Ed. 547 (1823). The ownership of real estate carries with it, as an incident thereto, the prima facie presumption of ownership of both the natural products of the land and the annual sown crops. Klevmoen v. Farm Credit Administration, 138 F.2d 609 (8th Cir. 1943).

Instruction No. 3 was taken verbatim from Gaffney v. Switow, 211 Ky. 232, 277 S.W. 543 (1925), and may be found in Stanley’s Instruction To Juries, Section 287. However, the Gaffney case indicates that although the instructions may correctly state the principle of law, it was inapplicable to the evidence in the case decided by that court. It is our opinion that the same situation pertains in this instance.

This appeal has been particularly vexing and has occupied a disproportionate amount of the Court’s time since the appellant’s counsel has not seen fit to furnish this Court with a statement of the questions of law involved, or adequate authorities which are applicable to this situation. However, we believe that the appellee was able to correctly analyze the documents submitted by the appellant, and was not prejudiced thereby since the appellee’s counsel responded in a capable, skillful and highly professional manner.

The judgment of the trial court is reversed and this matter is remanded for such proceedings as may be consistent with this opinion.

ALL CONCUR.


text:
    Carl K. HELMAN, Trustee, Appellant, v. KENTUCKY BOARD OF TAX APPEALS, etc., Mr. Ed W. Hancock, Attorney General, Maurice Carpenter, Commissioner, Jefferson County Board of Tax Supervisors and Jefferson County Property Valuation Administrator, Appellees.
    Court of Appeals of Kentucky.
    Aug. 12, 1977.

      Grant M. Helman, Karl N. Victor, Jr., Louisville, for appellant.
    J. Bruce Miller, Jefferson County Atty., Donald W. Blackburn, Asst. Jefferson County Atty., Louisville, for appellees.
    Before GANT, HAYES and HOWER-TON, JJ.
   GANT, Judge.

Appellant, Trustee, is the owner of a certain piece of property situated in Louisville, Kentucky, which was assessed by the Kentucky Board of Tax Appeals in 1972 at $160,000.00. In 1974, the Property Valuation Administrator increased the assessment on this property to $294,300.00. An appeal was taken from the ruling of the Jefferson County Board of Tax Supervisors to the Kentucky Board of Tax Appeals, as a result of which the assessment was reduced from $294,300.00 to $250,000.00. This assessment was subsequently appealed to the Jefferson Circuit Court, which affirmed the findings of the Board of Tax Appeals.

In the original appeal from the Board of Tax Appeals to the Jefferson Circuit Court, the appellant failed to name certain necessary parties, viz., the Jefferson County Board of Tax Supervisors and the Jefferson County Property Valuation Administrator. After appellant had filed motion for default judgment for failure to file timely answer, the omitted parties tendered and moved to file answers therein, stating that they were proper and necessary parties. Appellant resisted this but the court permitted these answers to be filed, contesting the case on the merits. Thereafter, the omitted parties subsequently filed a motion to dismiss for failure to name an indispensable party. However, the lower court permitted the answers to be filed, and overruled the motion to dismiss, finding for the appellees on the merits of the case.

Appellees contend that they were entitled to have the case dismissed for failure to name an indispensable party and, had their motion been filed before answer, their point might have been well taken. However, under the circumstances outlined above, it is our opinion that all parties were properly before the court and are properly before this Court and we will proceed to consider this case, as did the lower court, on the merits.

At the hearing before the Kentucky Board of Tax Appeals, the appellant introduced evidence from a well qualified appraiser who used two separate approaches and concluded that the value of the property in question was $132,500.00. These methods were the income approach and a true appraisal approach, using comparable sales and other methods which will be outlined below. The only evidence for the appellees was from an appraiser for the Property Valuation Administrator and a careful examination of his evidence indicates the following:

1. He did not appraise the property;

2. Although contending that he used the “income approach” he merely looked at the appellant’s income tax return for 1972;

3. He considered the income generated by a property to be the deciding factor in finding the fair cash value of the property;

4. He did not determine the length of the leases or the quality of the tenants in attempting to apply the income approach;

5. He said that he would not attempt to put a fair market value on this property;

6. He testified that he was not in a position to say what the fair cash value of this property was.

Under these circumstances, it is unquestionable that the testimony introduced on behalf of the appellees had absolutely no probative value. In a long line of cases, extending in both directions from the case of Floyd County v. Kentucky-West Va. Gas Co., Ky., 407 S.W.2d 721 (1966), the Kentucky courts have held that:

Regardless of the manner or method used by the Property Valuation Administrator or the decision of the Kentucky Board of Tax Appeals, the finding of valuation must be its fair cash value, estimated at the price it would bring at a fair voluntary sale.

The Kentucky Board of Tax Appeals had no evidence before it upon which it could fix the fair cash value other than the testimony introduced by the appellant.

The true income approach to fix fair cash value is a valid one and income from or rental value of real property is a proper factor to be considered in fixing its valuation for tax purposes. However, the courts throughout the United States are in complete agreement that income or earnings are neither the only element nor the controlling element to be considered in determining the valuation of realty for tax purposes. See Commonwealth, et al. v. J. B. Clay & Company, 215 Ky. 125, 284 S.W. 428 (1926). A number of other elements necessarily enter "into the value, such as original cost, location, cost and character of improvements, rental history, location as to future growth of the adjacent area, sales of adjacent property, sales of comparable property, type of building or property, etc.

Where the income approach is used, all jurisdictions, including Kentucky, require that net income and not gross income be the factor. Other considerations are the terms of the lease, such as requirements for maintenance, alterations or improvements, fixed rent or percentage of sales; prospective earnings as well as past earnings; length or duration of the lease; options at increased or decreased rentals; and, of considerable importance, the type of tenant and his financial stability.

In the instant case, where the so-called appraiser for the Property Valuation Administrator considered none of the above factors in his alleged income approach other than the net income, he can certainly not say that he fixed the fair market value or fair cash value of this property or even that he used the income approach. This type of evidence is all too prevalent in the courts of Kentucky and before the Kentucky Board of Tax Appeals and should be summarily disposed of by those bodies.

The judgment herein is reversed and this case is remanded to the Jefferson Circuit Court with directions to enter judgment in favor of the appellant fixing the assessment on the real estate and improvements involved herein at $160,000.00. Although the evidence before the Kentucky Board of Tax Appeals indicated that its assessed valuation should be placed at $132,500.00, the figure of $160,000.00 is the amount requested by the appellant in his petition and this Court will not place him in a more advantageous position than that which he requested.

All concur.


author: PARK, Judge.

text:
    James R. YOCOM, Commissioner of Labor of the Commonwealth of Kentucky and Custodian of the Special Fund, Appellant, v. George T. JACKSON, Fayette County Board of Education and the Workmen’s Compensation Board, Appellees. FAYETTE COUNTY BOARD OF EDUCATION, Appellant, v. James R. YOCOM, Commissioner of Labor of the Commonwealth of Kentucky and Custodian of the Special Fund, George T. Jackson, and Workmen’s Compensation Board, Appellees.
    Court of Appeals of Kentucky.
    Aug. 19, 1977.

      Gemma Harding, Dept, of Labor, Louisville, Kenneth E. Hollis, Gen. Counsel, Dept, of Labor, Frankfort, for Special Fund.
    Charles A. Taylor, Lexington, for George T. Jackson.
    Leslie Rosenbaum, Lexington, for Fa-yette County Board of Education.
    Before GANT, LESTER and PARK, Judges.
   PARK, Judge.

These consolidated appeals arise out of a claim filed by George T. Jackson before the Kentucky Workmen’s Compensation Board. Jackson was injured on February 19, 1974, in an automobile accident. The accident arose out of his employment as a messenger by the Fayette County Board of Education.

Jackson received a fractured sternum in the automobile accident, but his claim for compensation was based upon an alleged psychiatric disability attributable to the automobile accident. The employer vigorously opposed any award of permanent partial disability benefits to Jackson. The employer also asserted that any award of permanent partial disability should be apportioned against the Special Fund inasmuch as Jackson received no permanent injury as a result of the fractured sternum.

In its award, the Workmen’s Compensation Board found that Jackson was suffering from a twenty-five percent occupational disability as a result of the automobile accident. The Board also found that Jackson had no occupational disability prior to the accident and that there was no basis for Special Fund liability. On appeal from the award of the Board, the circuit court upheld the finding of occupational disability but held that the Board had erred in failing to apportion the award between the Special Fund and the employer. Two issues are presented by these consolidated appeals: (1) Did the Board apply the correct legal standard in holding that no liability should be assessed against the Special Fund? (2) Was the Board’s award of twenty-five percent permanent occupational disability supported by the record?

APPORTIONMENT ISSUE

The apportionment issue can best be understood by reference to the history of the efforts to balance the interests of the employer and the employee when the disability resulting from an industrial accident is much greater because of the employee’s physical or mental health at the time of the accident. The early workmen’s compensation statutes simply provided that there should be no recovery for “diseases” which were not the natural and direct result of a traumatic injury by accident. In the case of an employee who was suffering from a pre-existing neurosis which did not prevent his being able to work regularly prior to the compensable injury, the Board apportioned the resulting disability between the accident and the pre-existing neurosis. The employer was liable for only that portion of the disability attributable to the accident. The employee received no compensation for that portion of the disability which was attributed by the Board to the pre-existing neurosis. Ashland Limestone Co. v. Wright, 219 Ky. 691, 294 S.W. 159 (1927). As originally enacted, KRS 342.005 provided that the term “personal injury by accident” did not include “the results of a pre-existing disease.” Thus the employee could receive no compensation for any disability to the extent that it was attributable to a pre-ex-isting “disease.”

The rule announced in the Wright case was substantially changed by the decisions of the Court of Appeals in Highland Co. v. Goben, 295 Ky. 803, 175 S.W.2d 124 (1943), and Wood-Mosiac Co. v. Shumate, 305 Ky. 368, 204 S.W.2d 331 (1947). When a disability was attributable in part to injury and in part to a pre-existing disease, apportionment was required by KRS 342.005 only if the disease itself was active and disabling prior to the traumatic injury. The court held that the employer was responsible for the entire disability if the pre-existing disease was dormant and nondisabling prior to the injury.

This rule was short-lived. In 1948, KRS 342.005 was amended to provide that “personal injury by accident” did not include the “results of a pre-existing disease, whether previously disabling or not.” This amendment restored the rule laid down in the Wright case. A pre-existing neurosis was deemed a disease, and the Board was required to apportion disability between the pre-existing neurosis and the traumatic injury. Old King Mining Co. v. Mullins, Ky., 252 S.W.2d 871 (1952).

Under KRS 342.005 as construed in the Mullins case, the employee received no compensation for that portion of his disability attributable to a pre-existing disease. In 1946, the Subsequent Injury Fund was created to assist employees who suffered a greater degree of disability following a compensable injury because of the presence of a pre-existing “permanent partial disability.” The employer was liable only for the degree of disability which would have resulted from the subsequent injury had there been no pre-existing disability. The employee, of course, received no compensation for the pre-existing disability. However, the Subsequent Injury Fund compensated the employee for the additional disability attributable to the combination of the pre-existing disability and the subsequent injury. The liability of the Subsequent Injury Fund was very limited. It had no liability for a pre-existing disability attributable to disease unless the disease was a natural and direct result of a com-pensable injury. The Subsequent Injury Fund was intended to encourage employers to hire handicapped workers. If an employer hired a handicapped worker, his liability under the workmen’s compensation law for a subsequent injury to the employee would be no greater, in theory, than his liability for the same injury to a healthy employee. At the same time, the handicapped employee would be protected against the greater degree of disability which might result because of his pre-existing handicap. 2 Larson’s Workmen’s Compensation Law § 59.31 (1976).

Despite the original purpose of the Subsequent Injury Fund, the legislature in 1960 extended the liability of the fund (re-named the Subsequent Claim Fund) to a pre-exist-ing “dormant nondisabling disease condition which was aroused or brought into disability reality” as a result of a subsequent injury. The board was directed to apportion disability among the contributing causes, including a “pre-existing disease not previously disabling but aroused into disabling reality” by the subsequent injury. Employers very quickly sought to impose liability on the Subsequent Claim Fund (re-named the Special Fund in 1964) for a variety of pre-existing physical and mental characteristics of injured employees.

In a long line of cases following the 1960 amendments to the workmen’s compensation law, the former Court of Appeals was required to consider whether an employee was suffering from a dormant emotional or mental “disease condition” which was aroused into disabling reality by the subsequent injury. In Young v. Bear Branch Coal Co., Ky., 434 S.W.2d 656 (1968), the court emphasized that the statute required the existence of a dormant “disease condition” not merely a “condition” before liability could be imposed upon the Special Fund. The court stated:

“We think the medical evidence established that the employee had a dormant nondisabling emotional or mental condition which was brought into disabling reality by his physical injury. This conclusion, however, does not resolve the basic question in the case. That question is whether the employee’s psychiatric situation existing prior to the injury was a ‘disease condition’. (Emphasis added)
* * * # * *
“While under subsection (1)(a) of KRS 342.120 a pre-existing disabling condition may require apportionment regardless of its nature, under subsection (1)(b) of that statute (here applicable) a nondisabling condition must fall within the classification of a ‘disease’. (The form letter which the Board directs to a physician appointed under KRS 342.121 is inaccurate and may contribute to an unsatisfactory report in that it refers to a ‘nondis-abling disease or other condition’, whereas, the statute (KRS 342.120(1)(b)) does not recognize such an alternative other condition.)” 434 S.W.2d at 658

If the employee were suffering from a preexisting nondisabling neurosis which became disabling following a subsequent injury, then liability could be imposed upon the Special Fund. Based upon the holdings in the Wright and Mullins cases, the pre-exist-ing neurosis was considered a disease. Ricky Coal v. Adams, Ky., 426 S.W.2d 464 (1968). On the other hand, if the employe had only “a low threshold emotional breaking point” which constituted a “personality defect,” this was considered to be a “condition” but not a “disease condition” for which liability could be imposed upon the Special Fund. Yocom v. Tri-County Sanitation Service, Ky., 522 S.W.2d 850 (1975); City of Pikeville v. Maynard, 428 S.W.2d 202 (1968); Cabe v. Olin Mathieson Chemical Corp., Ky., 412 S.W.2d 250 (1967); Holland v. Childers Coal Co., Ky., 384 S.W.2d 293 (1964).

In 1972, substantial amendments were made to the workman’s compensation law which affected the liability of the Special Fund. KRS 342.005 had required the Board to apportion disability among the contributing causes including “pre-existing disease not previously disabling.” This statute was repealed. Most important, KRS 342.120 was amended to provide that the Special Fund was liable for a dormant nondisabling “disease or condition” which was aroused or brought into disabling reality by a subsequent injury.

Although recognizing that the Special Fund could be liable for a pre-existing condition which did not constitute a pre-existing disease, the Board in this case relied on the distinction previously made in the Maynard, Ricky Coal, and Holland cases between a neurosis and a personality disorder. In the absence of active disability prior to the subsequent injury, the Board held that liability could be apportioned to the Special Fund only if the employee was suffering from a pre-existing neurosis. We agree with the circuit court that the Board erred in holding that the 1972 amendments worked no change in the liability of the Special Fund in the case of employees having a pre-existing personality defect which contributed to the employee’s disability following an industrial accident. In Yocom v. Pierce, Ky., 534 S.W.2d 796 (1976), decided shortly after the award by the Board, the Supreme Court held that the Special Fund could be liable for a pre-existing dormant nondisabling personality condition which contributed to the employee’s subsequent work related nervous breakdown. The employee had a pre-existing anxiety neurosis which had increased over a period of years, but it is not clear from the opinion whether all of the pre-existing neurosis was work related. In answer to the employer’s argument that the employee’s personality makeup or structure did not constitute a condition, the court specifically held:

There is no room for doubt that the statute now refers to a condition separate and apart from a disease.

The difficult problem is determining what type of personality characteristic constitutes a “condition” within the meaning of KRS 342.120.

In construing the 1972 amendments in Yocom v. Gibbs, Ky., 525 S.W.2d 744 (1975), the court stated:

Prior to the amendment, this court read the words “disease condition” to mean a condition caused by disease. It also construed this statutory term “disease” to have been used in its ordinary and usual meaning rather than in a technical and scientific sense. * * *
The court reasoned in these cases that subsequent injury claim funds existed primarily for the encouragement of employment of obviously handicapped workers and the concept of allowing the employer to pass off partial responsibility to a fund composed of the contributions of all employers where the obviously handicapped worker suffered a work-connected injury was sufficiently strained by the imposition of partial responsibility on the pool fund for arousal of dormant “diseases” that it must have been the intent of the legislature not to further expand the right of the employer to pass off his liability where the injured worker’s condition was a mere unobservable deviation from the norm, or was a natural aging process. In such instances, the worker was not penalized because the employer was responsible for the entire award. 525 S.W.2d at 745-46

The court then went on to hold that the 1972 amendments were intended by the legislature to reverse the results in such cases as Young v. City Bus Co., Ky., 450 S.W.2d 510 (1969) and Appalachian Regional Hospitals v. Brown, Ky., 463 S.W.2d 323 (1971). It should be noted that the City Bus Co. case was based upon Young v. Bear Branch Coal Co., supra.

In the Brown case, the court rejected a broad definition of the term “disease” which would have encompassed “any departure from the normal state of health.” 463 S.W.2d at 325. In light of the holding in Yocom v. Gibbs, supra, that the 1972 amendments were intended to reverse the result in the Brown case, this court concludes that a dormant nondisabling condition within the scope of KRS 342.120 must be a condition which constitutes a “departure from the normal state of health.” Only a “dormant nondisabling” physical or mental abnormality could be “aroused * * * into disabling reality.”

Often, an employee’s disability resulting from an industrial injury would have been less “but for” pre-existing mental or physical characteristics of the employee. For example, the degree of occupational disability resulting from an injury to an employee’s left hand will depend upon a pre-exist-ing physical characteristic, namely, whether the employee is left handed or right handed. It is clear that the term “condition” in KRS 342.120 is not used in the “but for” sense. In Kentucky Convalescent Home v. Henry, Ky., 463 S.W.2d 328 (1971), the court held that obesity was not a disease within the meaning of KRS 342.120. The court stated:

It is difficult to imagine how a determined amount of fat can be “aroused” or “brought into disabling reality.” If we proceed from the premise that obesity is the quality or state of being very fat or corpulent, and since the evidence established that the employee’s obesity was in the same state after the injury as it was before the injury, then we must conclude that despite the injury the same amount of the inert substance called fat existed after the injury as was present before. Common human experience demonstrates that the presence of fat can and does accentuate the consequences of injury in given situations, but the same experience also establishes that the same accentuation of ordinarily expectable consequences of injury may be caused by general bone structure or body frame or stature. 463 S.W.2d at 330

Thus, a dormant nondisabling condition within the meaning of the statute is a departure from the normal state of health which is itself capable of being aroused into disabling reality.

However, not every departure from the normal state of health constitutes a dormant condition within the meaning of the statute. Considering the purpose of funds such as the Special Fund, this court concludes that it must be reasonably foreseeable that the abnormality may become disabling to some degree as a result of the ordinary stresses of everyday life over the employee’s expected work life before it can be considered a dormant condition within the meaning of KRS 342.120. The circuit court was correct in holding that the Board applied the wrong standard in finding that there was no basis for a liability of the Special Fund. The Board must make a new determination of the question of the Special Fund’s liability for any permanent disability in accordance with the standards set forth in this opinion.

At the present time the operation of the Special Fund depends upon special assessments made against all workmen’s compensation insurance carriers and self-insured employers. The liabilities of the Special Fund are, in reality, the liabilities of Kentucky business and industry in general. We believe that the legislature intended to encourage the employment of persons having health problems which could affect the degree of disability in the event of subsequent injury. It was not the intention of the legislature to relieve employers from the natural consequences of their employees’ work related injuries merely because the degree of disability was affected by some physical or mental characteristic which ordinarily would never have affected the employees’ ability to work.

PERMANENT DISABILITY ISSUE

The Board made an award of permanent partial disability benefits based upon a finding of twenty-five percent occupational disability attributable to the automobile accident. The circuit court was of the opinion that there was evidence of probative value in the record which would support the Board’s award. Without agreeing or disagreeing with this ruling of the circuit court, this court concludes that there are not sufficient findings of fact by the Board to afford meaningful review.

The employer contends that Jackson is an habitually untruthful person who presented false testimony in the furtherance of a fraudulent scheme to obtain workmen’s compensation benefits in this ease. The employer asserts that the medical testimony cited by the Board in support of its award was based either upon an inadequate or false history. In arguing that there was not sufficient evidence of probative value to support the award, the employer relies upon the decision in Smyzer v. B. F. Goodrich Chemical Co., Ky., 474 S.W.2d 367 (1971).

The employer offered substantial testimony from numerous witnesses in support of its contention that Jackson suffered from no permanent disability as a result of the automobile accident. If this court had been the trier of fact, Jackson would not have received the award of permanent partial disability made by the Board. However, this court is not the trier of fact. It reviews the award of the Board solely for the purpose of determining whether it is supported by evidence of probative value. Nevertheless, if there is to be meaningful review by this court of the award of the Board, there must be findings of fact by the Board on the issues raised by the evidence.

In the present case, most of the opinion relating to the medical testimony is no more than a recital of the testimony. For review purposes, this court does not need a recitation of the evidence; we need to know what facts the Board found from that evidence. This is particularly true in this case. We find no medical evidence in the record that Jackson has any permanent disability. The Board relied most heavily on the testimony of Dr. Abies, the treating psychiatrist. In the opinion of Dr. Abies, Jackson’s condition would be considered chronic only if his symptoms continued another six months to a year. We are left to guess at the basis of the Board’s finding of permanent partial disability.

Furthermore, the Board’s opinion does not specify the nature of Jackson’s psychiatric condition. As a “finding of fact,” the Board stated:

“We have written before that we welcome plain language and Dr. Abies said three times on the same page that something is wrong with his head. We agree and we believe the ‘something’ is compen-sable and causally related to the accident on February 19, 1974.”

It is impossible to afford appellate review of the award without a specific finding on the nature of Jackson’s condition. In Ricky Coal Company v. Adams, supra, the court quoted Larson for the proposition that, “There is almost no limit to the variety of disabling ‘psychic’ conditions that have already been recognized as legitimately com-pensable.” 426 S.W.2d at 466. However, not every psychic condition is disabling, and no condition is compensable unless it is disabling. The fact that Jackson has a “personality disorder” or suffers from an “immaturity reaction” does not establish a compen-sable injury. Even if Jackson is suffering from a neurosis as a direct result of the injury, the Board’s findings should establish that the neurosis results in a functional disorder that is disabling. There is no evidence in the record that Jackson is suffering from a psychosis, which by definition would be disabling.

The Board’s opinion makes almost no mention of the extensive testimony by the nonmedical witnesses offered by the employer. There are no specific findings relating to the factual issues raised by those witnesses. We do not know whether the Board found that the employer’s witnesses were entitled to no credibility. We do not know whether the Board believed that Jackson was truthful in all matters. There is no specific finding with respect to Jackson’s mental condition prior to the automobile accident. There are no findings as to his work history or prior injury claims.

In many cases, detailed findings of fact are not necessary. However, considering the subjective nature of this claim and the serious challenge made to Jackson’s credibility, specific findings of fact are needed if meaningful review is to be afforded by this court. The monetary value of the Board’s award to Jackson is substantial. In fairness to the employer, this court should not have to guess at what facts were found by the Board. The circuit court erred in not remanding the case to the Board for more specific findings.

RULING

The judgment in No. CA-154-MR is affirmed. The judgment in No. CA-174r-MR is reversed. The circuit court shall enter a new judgment remanding the case to the Board with directions to make new findings of fact and conclusions of law in accordance with this opinion.

All concur.

      . 1948 Ky. Acts, Chap. 65, § 1 (KRS 342.005).

      . 1946 Ky. Acts, Chap. 23, § 1.

      . 1960 Ky. Acts, Chap. 147, § 9 (KRS 342.-120(1)(b)).

      . 1960 Ky. Acts, Chap. 147, § 1 (KRS 342.-005(2)(c)).

      . 1972 Ky. Acts, Chap. 78, § 36.

      . 1972 Ky. Acts, Chap. 78, § 17.

      . M. Glazer, “Changes in the Law Regarding Special Fund,” Seminar on Workmen’s Compensation, Office of Continuing Legal Education, University of Kentucky College of Law (1974), 82 at 107-08.