author: HOWERTON, Judge.

text:
    Mary Ann PLUMMER, Appellant, v. Sara SUMME, Appellee.
    Court of Appeals of Kentucky.
    Nov. 23, 1984.
    As Modified Jan. 11, 1985.
    Discretionary Review Denied by Supreme Court April 24, 1985.
    Bernard J. Blau, Jolly & Blau, Newport, for appellant.
    John R. Elfers, Covington, for appellee.
    Before CLAYTON, HOWERTON and REYNOLDS, JJ.
   HOWERTON, Judge.

Plummer appeals from a summary judgment in the Kenton Circuit Court dismissing her claim against Summe for interfering with her marital relationship with Mott Plummer. Plummer presents four allegations of error, but we need to consider only the question of whether the trial court erred by finding that the action was barred by a statute of limitation. Her other allegations are that she was entitled to summary judgment, that the court should have adopted the judgment prepared by her, and that the court abused its discretion in granting a protective order to Mott Plum-mer. We agree that the court erred in concluding that the action was barred by the statute of limitations, and we therefore reverse the judgment and remand the case to the trial court for further action. The trial court must thereafter consider what judgment is appropriate and what further proof is to be allowed or required.

The record consists of the pleadings, various affidavits, and some exhibits filed by Mary Ann Plummer indicating that her marriage with Mott Plummer was viable until the parties separated on July 23,1982. It was on that date that Mary Ann learned from her husband that he was having an affair involving sexual relations with Sara Summe. The parties separated on that date, and Mary Ann subsequently filed an action to dissolve her marriage with Mott. This action against Sara Summe was filed on June 22, 1983.

An affidavit filed by Mott Plummer indicates that his affair with Sara Summe began on June 25, 1981, and that it has continued since that time. KRS 413.140(l)(c) provides that a criminal conversation action must be commenced within one year after the cause of action accrued. The case of Skaggs v. Stanton, Ky., 532 S.W.2d 442 (1975), supports the fact that the one-year limitation applies to all bases for the tort of interference with a marriage, whether it be criminal conversation, enticement, or alienation of affections. Each is merely a method by which the tort of interference may be committed. The trial court concluded that, since the tort was first committed in 1981, the case was barred by the statute of limitations.

Summe argues that the statute began to run on June 25,1981. The evidence of that beginning date is uncontroverted. Mary Ann argues that, since she was not aware of any interference with her marriage until July 23, 1982, the statute of limitations does not begin to run against her until that date, and that this action was filed within one year from that time.

The question presented in this case is one of first impression in Kentucky. Skaggs, supra, primarily determined that the one-year limitation applied in an action for alienation of affections. It was argued in that case that a five-year limitation should be applicable. Our primary question is, when does the time begin to run in this situation? Both sides refer to the case of Justice v. Justice, 295 Ky. 610, 175 S.W.2d 21 (1943), to support their arguments. We determine that Justice is helpful but not dispositive of this case. The court held in Justice that an action for alienation of affections based on criminal conversation was not barred by the statute when the evidence showed that a relationship existed for a period of time but was interrupted when the wife gave birth to a child. The unlawful relationship was resumed, however, and the husband filed his action eight months after the resumption. The previous unlawful relationship had ended more than a year before the action was commenced. Here, we have no interruption, but a continuing relationship between Mott Plummer and Sara Summe.

Summe cites various cases to support the judgment of the trial court, but we find no merit in the application of any of them. It may be that periods of limitation are established to cut off rights and the legislated periods must be strictly adhered to by the courts, Bell v. Gray, 191 F.Supp. 328 (E.D.Ky.1960); but, we find no usable analogy with the limitation on slander and defamation as discussed in Barnett v. Louisville & Nashville Railroad Co., 407 F.2d 1333 (6th Cir.1969). The tort and the damage in slander and defamation occurs when the slanderous communication is made to a third party. In this case, the marriage remained viable until the events of July 23, 1982. The fact that similar acts had occurred regularly and somewhat continuously from and after June 25, 1981, was of no direct consequence to Mary Ann. This is apparently true whether her knowledge caused her to seek an end to the marriage or whether Mott finally made a decision to end his charade and end the marriage.

Summe also argues that Kentucky only recognizes a “time of discovery” rationale in two types of cases. One concerns medical malpractice, Tomlinson v. Siehl, Ky., 459 S.W.2d 166 (1970), and the other is legal malpractice, Conway v. Huff, Ky., 644 S.W.2d 333 (1983). The general rule in these situations is that the action must commence within the time limit after the injury is first discovered or should have been discovered in the exercise of reasonable care.

We decline to apply the “time of discovery” doctrine to the statute of limitation pertaining to tortious interference with a marriage, because there must be some limitation on when an action can be commenced. Instead, we look to the time of the last act prior to discovery. Had there been only one tortious act which occurred on June 25, 1981, which was subsequently discovered on July 23, 1982, we would conclude that any action would be barred. In this case, however, there were continuing unlawful acts, including the one committed on July 23,1982. If this was the last act or only act, the suit could be brought at any time within the one-year limitation. The one year would run from that date, even though the activity was not discovered until a later time. In no event would the limitation extend beyond one year following the last wrongful act.

In a sense, this decision is comparable to Justice, supra. Each of the various acts of sexual relationships are interrupted by a period of time. Each new unlawful liaison may become the basis for a cause of action provided the last one is discovered and prosecuted in time. The situation in Justice had gone on for a long period of time, but the resumption was discovered and suit was brought within eight months.

We have no way of knowing at this time when or why this marriage went on an inexorable course toward the rock pile, but the final incident which destroyed the marriage was the event which occurred on July 23, 1982. A tortious act occurred on that date, and it was also on that date when Mary Ann had her first knowledge of the affair. Her claim is not barred by KRS 413.140(l)(c).

The judgment of the Kenton Circuit Court is reversed, and this action is remanded for further proceedings.

All concur.


source: Caselaw Access Project

author: CLAYTON, Judge.

license: Public Domain

text:
    COMMONWEALTH of Kentucky, Appellant, v. The HILLHAVEN CORPORATION, Appellee.
    Court of Appeals of Kentucky.
    Dec. 28, 1984.
    Discretionary Review Denied and Opinion Ordered Published by Supreme Court April 24, 1985.

      David L. Armstrong, Atty. Gen., Roy Gray, Asst. Atty. Gen., Richard E. Plymale, Deputy Asst. Atty. Gen., Frankfort, Raymond Naber, Jr., Asst. County Atty., Louisville, for appellant.
    John L. Smith, Barnett & Alagia, Bradley R. Hume, Louisville, Robert Fabrikant, Washington, D.C., for appellee.
    Before CLAYTON, HOWERTON and REYNOLDS, JJ.
   CLAYTON, Judge.

On December 22, 1982, the present appeal began as a complaint filed in the Jefferson District Court by the Medicaid Fraud Control Unit of the Kentucky Attorney General’s Office. The Attorney General charges by that complaint that the appel-lee, Hillhaven Corporation, violated KRS 508.070 and KRS 502.050 relating to wanton endangerment. The affidavit accompanying the complaint accuses employees of Hillhaven, a 180-bed nursing home located in Louisville, Kentucky, of engaging in conduct wantonly endangering Viola Fitzgerald by their failure to provide necessary and proper care to her while she was a patient. Listed as examples of this conduct are the failure to provide adequate skin care, nutrition, sanitary care, laboratory work, and medications.

In response to these charges, Hillhaven entered a plea of not guilty on January 21, 1983. The corporation later moved the Jefferson District Court at pretrial hearing to accept a plea of nolo contendere and acknowledged its willingness to pay the maximum fine of $10,000. On April 22, 1983, the district court entered an order accepting the corporation’s plea. The sole authority cited by the district court in support of this power is an opinion letter of the Attorney General’s Office, 76-174, stating in part, “Nor has that plea [nolo conten-dere] been utilized in Kentucky as a frequent method of disposition.”

The Commonwealth appealed the order of the district court to Jefferson Circuit Court on June 1, 1983. The circuit court entered on November 30, 1983, its judgment supporting the order. Cited in the judgment as authority for affirmation is KRS 532.025(l)(a) which directs the court to consider a defendant’s prior pleas of nolo contendere during a presentence hearing involving the death penalty. The Court then comments that,

“Obviously, the directive to consider pri- or nolo contendere pleas does not designate the court of origin of the pleas, but does at least indicate that such pleas are to be considered, and therefore are not totally unconsidered in Kentucky criminal law.”

Based solely upon this reasoning the circuit court found there to be no abuse of discretion. Appeal was subsequently taken to this court.

The Commonwealth founds its argument in support of reversal in the Kentucky Rules of Criminal Procedure (RCr). The state reads rules RCr 8.08 and RCr 8.12 as effectively prohibiting the acceptance of a plea of nolo contendere in a criminal case. In pertinent part, the two rules read,

RCr 8.08 Pleas
A defendant may plead not guilty or guilty. The court may refuse to accept a plea of guilty, and shall not accept the plea without first determining that the plea is made voluntarily with understanding of the nature of the charge. If a defendant refuses to plead or if the court refuses to accept a plea of guilty or if a defendant corporation fails to appear, the court shall enter a plea of not guilty, and
RCr 8.12 Pleadings
Pleadings in criminal proceedings shall be the indictment, information, complaint or uniform citation, and the plea of guilty or not guilty. No other plea, demurrer, or motion to quash shall be used, and defenses and objections that before the effective date of these rules could have been raised by one or more of them shall be raised only by motion to dismiss or to grant appropriate relief, (our emphasis).

Official commentary to RCr 8.08 adds that the rule is Federal Criminal Rule 11 “with the plea of nolo contendere omitted.” As further weight for its position, the state also points out that the Kentucky Supreme Court refused to adopt the 1980 recommendation of the Criminal Rules Revision Committee to amend RCr 8.08 and 8.12 to provide for a plea of nolo contendere. The Commonwealth then concludes its argument by pointing out various flaws in the opinions of the district and circuit court, and by distinguishing Attorney General Opinion 76-174 and KRS 532.025(l)(a).

The appellee corporation goes to no small effort to convince us that the courts of the Commonwealth have, via the common law, the inherent power to accept pleas of nolo contendere, regardless of the criminal rules express prohibition of all pleas other than guilty or not guilty. Reasoning that section 233 of the Kentucky Constitution adopts the law of Virginia as of 1792, including the power of Virginia Courts to enter nolo contendere pleas, the corporation concludes that Kentucky Courts, therefore, must have the same inherent power. With respect to RCr 8.08 and 8.12, the appellee maintains that the two rules do not abrogate this common law power as they are not clearly repugnant to the common law rule nor indicative of legislative intent to overturn it. This is so, the appel-lee explains, because at common law a plea of nolo contendere was not a plea, but simply a defendant’s declaration that he will not contest prosecution. Furthermore, it is argued that the commentary to RCr 1.04 indicates that the rules should be construed to eliminate unjustifiable expense and delay which would supposedly occur were we to reverse. In the final portion of its first argument, Hillhaven refers to the Attorney General’s Opinion and statute mentioned above along with three recent Kentucky judicial decisions to demonstrate that Kentucky Courts have been aware of this inherent common law power both before and after adoption of the present rules. The balance of its brief is then devoted to an extended discussion of policy reasons supporting the application of a nolo contendere plea in the present situation.

Having examined in detail the arguments of both parties, we are persuaded that the Commonwealth’s position is the more soundly reasoned one. The language of RCr 8.12 as construed according to “common and approved usage of language,” KRS 446.080(4), expressly prohibits the use of any pleas except guilty or not guilty. Thus, the rule is clearly repugnant to the supposed common law power of the courts of the Commonwealth to enter pleas of nolo contendere, assuming that such power did at one time exist. As a matter of policy, acceptance of a plea of nolo con-tendere may well serve a beneficial purpose in the administration of the criminal justice system. However, we do not sit as a policymaking body. Our function in this instance is to construe the rules and the common law, neither of which lends any support for the recognition of an existing common law power of the courts to enter at their discretion a plea of nolo conten-dere. Where a rule of criminal procedure such as RCr 8.12 clearly states that “Pleadings in criminal proceedings shall be ... guilty or not guilty. No other plea ... shall be used....,” any conflicting common law rule is without effect, including the asserted power of Kentucky Courts to, at their discretion, accept a plea of nolo con-tendere. RCr 8.12 is totally repugnant to the inherent power appellee seeks to have recognized. Whether one quibbles over semantics of nolo contendere as a plea or merely a declaration of refusal to protest prosecution, the fact remains that no judicial opinions, statutes or opinions of the Attorney General have directly recognized the existence of the appellee’s common law power either before or after adoption of the 1962 version of the present rules of criminal procedure. Even the most cursory review of the appellee’s cited authority reveals this to be so.

Duncan v. Wiseman Baking Company, Ky., 357 S.W.2d 694 (1961), is a motor vehicle collision case involving first, the question of a jury instruction on the duty of a driver to place road flares; and second, the issue of contributory negligence. In the opening statement of facts, the court mentions in passing that the defendant drivers entered a plea of nolo contendere in Webster Quarterly Court and were fined. From this dicta the appellee proclaims “Indeed, in at least one published case, the Court of Appeals has acknowledged nolo pleas accepted by a lower court.” We disagree. No question involving the plea or its propriety was then before the court. The legal analysis contained in the opinion never mentions criminal pleading, and instead concentrates on questions of duty and negligence. In short, the court does nothing more in Duncan, supra, than make a passing reference to what may well have been an erroneously accepted plea. Since this decision predates adoption of the 1962 rules, it is, moreover, largely irrelevant to the question of the current status regarding the plea.

Hillhaven adds that developments since 1962 “support the continued vitality of the nolo plea in the Commonwealth.” Two disciplinary actions involving members of the state’s bar association are then cited. Neither of those cases involves the Kentucky Rules of Criminal Procedure. In Kentucky Bar Association v. Taylor, Ky., 549 S.W.2d 508, 509 (1977), an attorney defendant entered a plea of nolo contendere in the United States District Court for the Western District of Kentucky. The charges which the defendant refused to contest involved willfully failing to file federal income tax returns in violation of 26 U.S.C. § 7203. Thus, from the outset the court in Taylor was faced with a violation of a federal statute placed before a federal court where pleas of nolo contendere have long been accepted. Fed.Rule of Crim. Proc. 11. In a footnote to the opinion, the comment appears that nolo contendere pleas are deemed the equivalent of a plea of guilty in disciplinary actions. Taylor, supra at 509 n. 1. What in effect the court is recognizing, as KRS 532.025(l)(a) recognizes, is that nolo contendere pleas entered in foreign or federal jurisdictions permitting such pleading may be taken into consideration by the courts of this state in disciplinary actions, and in sentencing in death penalty actions. This is not the equivalent of recognizing an inherent common law power of Kentucky Courts to accept such pleas. No Kentucky Courts accepted a plea of nolo contendere in either of the disciplinary actions cited. In Kentucky Bar Association v. King, Ky., 535 S.W.2d 83, 84 (1976), the defendant attorney involved entered a plea of nolo conten-dere to charges of conspiracy to commit a felony under Chapter 833.04 of the Florida statutes. The circuit court for the Sixth Judicial District of Florida accepted the attorney’s plea, and granted a judgment suspending sentence with five years’ probation. This court found the suspended sentence and probation to be the equivalent of a conviction, “regardless of the plea.” Id. Therefore, neither Taylor nor King supports a claim of continued vitality in Kentucky of the plea of nolo contendere. On the contrary the decisions more naturally lend themselves to the position of the Commonwealth, and by analogy its interpretation of KRS 532.025(l)(a). This statute is simply the legislature’s means of permitting Kentucky judges to take the plea into consideration as evidence during a presen-tencing in a Kentucky death penalty case. The statute reveals nothing on the issue of whether the courts of the Commonwealth may accept such a plea.

Finally, neither McNab v. State, 42 Wyo. 396, 295 P. 278, 279-80 (Wyo.1931), or Schad v. McNinch, 103 W.Va. 44, 136 S.E. 865, 866-67 (W.Va.1927), clarify matters. For though the plea of nolo contendere was judicially recognized in Wyoming and West Virginia, in the face of statutes making no express provision for such plea, no express exclusion of all pleas other than guilty or not guilty, as is presently included in our criminal rules, was found in the rules of procedure of either state. These two opinions then, like the other authorities Hillha-ven refers to as reflecting an existing judicial acceptance of the plea, are nonpersua-sive.

In short, no authority supports the existence of an inherent discretionary power in the Kentucky courts to accept the plea of nolo contendere. The language of RCr 8.12 “construed according to common and approved usage of language,” KRS 446.-080(4), excludes all pleas other than guilty or not guilty. Whether this broad exclusion represents the soundest policy is a question best left to the legislature or the Kentucky Supreme Court. For us it is enough that the plain language of RCr 8.12 forbids acceptance of all but the two designated pleas.

The judgment of the Jefferson Circuit Court is reversed.

All concur.


author: HOWARD, Judge.

text:
    LOUISVILLE AND JEFFERSON COUNTY METROPOLITAN SEWER DISTRICT, and Thelma Stovall, Commissioner of Labor (Special Fund), Appellants, v. Michael J. KALBHIN, Jr. and Workers’ Compensation Board and Norman L. Wagner, Appellees.
    Court of Appeals of Kentucky.
    Dec. 28, 1984.
    Discretionary Review Denied and Opinion Ordered Published by Supreme Court April 24, 1985.
    C.A. Dudley Shanks, Segal & Shanks, Mary Ann Kiwala, Labor Cabinet, Louisville, for appellants.
    Norman L. Wagner, Louisville, for appel-lees.
    Before HAYES, C.J., and DUNN and HOWARD, JJ.
   HOWARD, Judge.

The Louisville and Jefferson County Metropolitan Sewer District and the Special Fund appeal an order of the Jefferson Circuit Court which affirmed the opinion and award of the Workers’ Compensation Board directing them to pay $6,500.00 in attorney’s fees in a case involving the ap-pellee, Michael J. Kalbhin, Jr., who suffered a work-related injury while employed by the appellant, Metropolitan Sewer District. Subsequent to his injury, Mr. Kal-bhin filed a workers’ compensation claim and was subsequently found to be suffering a permanent occupational disability of 15%. The employer and the Special Fund were ordered to pay $16.20 per week each for a total of $32.40 for the duration of Mr. Kalbhin’s disability. Mr. Kalbhin had also filed a third-party claim against the driver of the other car involved in the automobile accident in which he was injured and that claim was settled for a total of $75,000.00. The employer and Special Fund were allowed to credit the entire settlement between Mr. Kalbhin and the third-party tort-feasor against their liability on the open-ended award pursuant to Davis v. Buley, Ky.App., 634 S.W.2d 161 (1982). Therefore, after deducting his legal fees and expenses, a credit of $28,932.27 was deducted from their payment of his award. Thereafter, Mr. Kalbhin’s attorney made a motion in the workers’ compensation claim for an attorney’s fee. The Board awarded a fee of $6,500.00 and ordered the employer to pay one-half, or $3,250.00 and the Special Fund to pay the balance.

The appellants argue that the sum of $6,500.00 exceeds their possible liability in this matter, taking into consideration the credit they are allowed, and therefore, the Board’s award of the attorney’s fee should be set aside. They arrive at this conclusion by converting the award into a present value lump sum using the present worth values referred to in KRS 342.150, which deals with lump sum compensation. That statute states:

Whenever compensation has been paid for not less than six (6) months, thereafter, on the application of all parties in any case where the board determines that it will be for the best interests of all parties and will not subject the employer or his insurer to an undue risk of overpayment, future payments of compensation or any part thereof may be commuted to a lump sum of an amount which will equal the total sum of the probable future payments so commuted, discounted at four percent (4%) true discount compounded annually on each payment. Upon payment of such lump sum all liability for the payments therein commuted shall cease.

It is clear from a reading of this statute that it is applicable to lump sum compensation when application for such has been made by all parties. That is not the case here. This is an open-ended award which is payable so long as Mr. Kalbhin remains disabled. There is no way of calculating its value and it may not properly be done by the lump sum method. An estimate of the worth of the award could only be made by multiplying Mr. Kalbhin’s life expectancy times $32.40 per week. We see that based on that calculation the potential value of the award would be well in excess of the $28,937.27 credited to the employer and the Special Fund.

We further note that the $6,500.00 attorney’s fee would be ultimately deducted from Mr. Kalbhin’s award, although the employer and the Special Fund will be required to pay it immediately. Commonwealth of Ky., Dept. of Hwys. v. Combs, Ky., 357 S.W.2d 316 (1962). Obviously, after the $28,932.27 credit is used up, an additional credit of $6,500.00 will be applied to the award. Only after that credit has been expended, will the employer and the Special Fund have to begin paying the weekly benefits of $32.40 to Mr. Kalbhin.

The appellees argue that the employer and the Special Fund have no right to object to the award of the attorney’s fee by the Board. While that is usually the case, as noted in Commonwealth of Ky., Dept. of Hwys. v. Combs, supra, such an award is appealable by the employer if he is truly aggrieved. If the facts were as the employer believed them to be, i.e., that the credit exceeded the award, the employer and the Special Fund would indeed be aggrieved and could appeal. However, if there is no question that an attorney’s fee would be covered by the award, and since such fee eventually comes out of the employee’s award, the employer and Special Fund would have no standing.

For the reasons set forth herein, the order of the Jefferson Circuit Court is affirmed.

All concur.


text:
    Garry SCHWALBACH and Margaret Ann Schwalbach, Appellants, v. FOREST LAWN MEMORIAL PARK, Kentucky Corporation, Appellee.
    Court of Appeals of Kentucky.
    Feb. 22, 1985.
    Discretionary Review Denied and Opinion Ordered Published by Supreme Court April 24, 1985.
    Paul H. Twehues, Jr., Newport, for appellants.
    Gary G. Sergent, O’Hara, Ruberg & Taylor, Covington, for appellee.
    Before COMBS, HOWERTON and LESTER, JJ.
   HOWERTON, Judge.

The Schwalbachs appeal from a judgment of the Kenton Circuit Court holding Forest Lawn Memorial Park not liable for damages caused by its tree, which was located near the boundary line separating the properties of the parties. The trial court found that the damages complained of were the result of normal droppings of leaves and debris from the tree. The court used as the controlling law the “Massachusetts Rule,” as is set forth in Michalson v. Nutting, 275 Mass. 232, 175 N.E. 490 (1931). Based on the circumstances in this case, we agree that Forest Lawn is not liable to the Schwalbachs for damages, and we affirm the judgment.

The Schwalbachs own an apartment building located next to property owned by Forest Lawn. They purchased the property in 1969, and they complain that the overhanging limbs began causing them trouble in 1972. The trouble persisted until April of 1983, when they replaced their roof. The original roof was flat, and the new roof was pitched in order to hold fewer leaves, twigs, and other droppings from the tree. The roof had a life expectancy of 20 years and had existed for 19 years at the time it was replaced at a cost of $14,300.

Forest Lawn responded to earlier complaints by removing six branches from the offending tree, but this effort apparently did not solve the total problem. The Schwalbachs took no action to cut any of the branches, nor did they request permission to do so. The trial court not only applied the “Massachusetts Rule,” but it further concluded that a more reasonable solution in this case would have been for the Schwalbachs to remove the offending limbs back to the boundary line.

This case presents an issue of first impression in Kentucky. Although we might reach a different result if the tree was known, or should be known, to be so rotten so as to cause a serious threat or nuisance to adjoining property, the apparent good condition of this tree and the other facts in this case are such that we agree with the result reached by the trial court.

The Schwalbachs urge us to adopt what they call a more modern rule, which requires everyone to be held responsible for private nuisances on real estate. They rely on Sprecher v. Adamson Companies, 30 Cal.3d 358,178 Cal.Rptr. 783, 636 P.2d 1121 (1981). The California court used ordinary negligence principles to determine a landowner’s liability for harm caused by the condition of his land. The parties refer us to rules from various jurisdictions, which are divided in one way or another, but the California rule seems to be unique to the extent that it might be applied to permit recovery by the Schwalbachs in this factual situation. We might also apply negligence rules and nuisance rules in different situations, but we elect to apply the “Massachusetts Rule” in this case.

As presented in Michalson, supra, the rule reads:

“As against adjoining proprietors, the owner of a lot may plant shade trees upon it, or cover it with a thick forest, and the injury done to them by the mere shade of the trees is damnum absque injuria. It is no violation of their rights.” We see no distinction in principle between damage done by shade, and damage caused by overhanging branches or invading roots. The principle involved is that an owner of land is at liberty to use his land, and all of it, to grow trees. Their growth naturally and reasonably will be accompanied by the extension of boughs and the penetration of roots over and into adjoining property of others.... The neighbor, though without right of appeal to the courts if harm results to him, is, nevertheless, not without remedy. His right to cut off the intruding boughs and roots is well recognized.... His remedy is in his own hands. The common sense of the common law has recognized that is wiser to leave the individual to protect himself, if harm results to him from this exercise of another’s right to use his property in a reasonable way, than to subject that other to the annoyance, and the public to the burden, of actions at law, which would be likely to be innumerable and, in many instances, purely vexatious.

175 N.E. at 490-491. Imposing liability upon a landowner for damage resulting from the natural dropping of leaves and other ordinary debris would result in innumerable lawsuits and impose liability upon a landowner for the natural processes and cycles of trees. We are not confronted with a dead tree which is likely to fall and cause serious injury. A claim for damages or removal of such a tree might be based on the theory of negligence for damages or nuisance for removal. Although the landowner may have the right to cut back overhanging branches to the boundary line, in the case of a dead and dangerous tree, it may be more sensible to require the owner of the tree to remove it in its entirety, or be liable for damages. It would be futile to require the neighbor to remove a portion of the tree to the boundary line leaving the hazard of a large portion of the total tree to remain in a threatening position.

Here, we are simply concerned with leaves, twigs, and seeds which fell on a roof and occasionally stopped up gutters. We decline to allow a recovery and concur with the trial court. The judgment of the Kenton Circuit Court is affirmed.

All concur.


author: GUDGEL, Judge:

text:
    MFA INSURANCE COMPANY, Appellant, v. Thomas C. CARROLL, and Jack R. Underwood, Jr., Appellees.
    Court of Appeals of Kentucky.
    March 8, 1985.
    Discretionary Review Denied and Opinion Ordered Published by Supreme Court April 24, 1985.
    Julian E. Kennamer, Stiles & Bowman, Louisville, for appellant.
    Thomas C. Carroll, Jack R. Underwood, Jr., Louisville, for appellees:
    Before HAYES, Chief Judge, and COOPER and GUDGEL, JJ.
   GUDGEL, Judge:

This is an appeal from a judgment entered by the Jefferson Circuit Court. The court awarded the attorneys for the plaintiff in a tort action a fee for recovering reimbursement of BRB on behalf of a reparations obligor. Appellant, the insurer, contends that the court erred by finding that appellees are entitled to an award of an attorneys’ fee and by awarding an excessive fee. We agree with appellant’s first contention. Hence, we reverse the court’s judgment without addressing appellant’s remaining contention.

On March 12, 1979, Anthony Bowman was killed as a result of a head-on collision. The decedent’s vehicle was insured by appellant MFA Insurance Company (MFA). The driver of the other vehicle involved was insured by State Farm Mutual Automobile Insurance Company (State Farm). Appellees were employed by the decedent’s personal representative to prosecute a wrongful death action against State Farm’s insured.

Both insurers investigated the collision independently and reached the same conclusion: The accident was caused by negligence on the part of State Farm’s insured. On March 12, 1979, MFA commenced paying BRB to the decedent's estate. On May 31, 1979, MFA notified State Farm that it would probably assert a subrogation claim. On August 24, 1979, State Farm established a settlement authority in regard to the claim of $75,000. This sum included a reserve of $10,000 to satisfy MFA’s subro-gation claim.

MFA inquired whether State Farm would honor its subrogation claim shortly after it had paid the decedent’s estate the applicable BRB policy limit of $10,000. State Farm responded to MFA’s inquiry on February 18, 1980, indicating that MFA’s claim would be honored after a tort action which had been filed by the decedent’s estate on February 2, was “concluded.”

On March 11, 1980, MFA, pursuant to KRS 304.39-070(3)(ii), submitted an application seeking arbitration of its subrogation claim. State Farm filed a response to the application requesting that the arbitration proceedings be held in abeyance until such time as the pending tort action was resolved.

On July 31, 1980, the attorney State Farm had employed to defend the tort action wrote appellees a letter which stated as follows:

I have been authorized by my clients to restate their offer to pay to you the $65,000.00 for settlement of the claim of the estate as well as the $10,000.00 PIP benefits for a total of $75,000.00 and the Court costs in this case.

On August 4, 1980, appellees accepted State Farm’s offer. It is undisputed, however, that MFA did not employ appellees to represent its interests, and that appellees did not negotiate with State Farm on MFA’s behalf. In fact, appellees told State Farm to hold the $10,000 check which had been made payable to MFA since they were “not authorized” to act on its behalf.

On March 10, 1981, appellees filed this action against MFA seeking an award of an attorneys’ fee equal to one-third of the $10,000 MFA recovered. After evidence was adduced, the court adjudged that ap-pellees were entitled to a fee and that a sum equal to one-third of MFA’s recovery was a reasonable fee. This appeal followed.

First, MFA argues the court’s finding that appellees are entitled to the award of an attorneys’ fee is clearly erroneous, and not supported by the evidence. We agree.

The precise issue we must decide is whether attorneys for a secured person are entitled to the award of an attorneys’ fee pursuant to KRS 304.39-070(5) in a case where the reparations obligor for the secured person against whom the fee is awarded elects to arbitrate its subrogation claim, and does not intervene as a party in its insured’s tort action. We conclude that they are not.

The applicable statute, KRS 304.39-070(5), provides as follows:

(5) An attorney representing a secured person in any action filed under KRS 304.39-060 shall be entitled to a reasonable attorneys’ fee in the event that reparation benefits paid to said secured person by that secured person’s reparation’s obligor are reimbursed by any insurance carrier on behalf of a tortfeasor who is the defendant in any such action filed by the said secured person or in the event such potential “action” is settled by said potential tortfeasor’s insurance carrier on his behalf prior to the filing of any such suit.

In construing this statute in Woodall v. Grange Mutual Casualty Company, Ky., 648 S.W.2d 871, 873 (1983), the Supreme Court stated:

The language of the statute, though recondite, clearly mandates a reasonable attorney’s fee for the secured person’s attorney (here, Woodall) when that attorney, in an action against or a settlement with a tort-feasor (here an action against the Furrows), recovers for the reparation’s obligor (here Grange) a reimbursement of benefits, previously paid by the reparation’s obligor to the secured person, from the tort-feasor’s insurance carrier. Here, Woodall is entitled to a reasonable attorney’s fee because he was the attorney for the Propsts in a tort action against the Furrows in which the amount recovered included the $3,724.91 paid by the Furrows’ insurance carrier to Grange for reimbursement of benefits.

Woodall, however, is distinguishable from the instant action. There the insurance company asserted its subrogation claim by intervening as a party in its insured’s tort action. Moreover, the insured’s attorney actually provided direct services which assisted the insurer in securing reimbursement. Here, by contrast, the insurer elected to avail itself of the arbitration option provided by KRS 304.39-070(3)(ii). It did not intervene as a party in its insured’s tort action. Moreover, MFA prosecuted its subrogation claim on its own during the period prior to the settlement of the wrongful death action, and neither employed nor contacted appellees about the claim. Rather, MFA dealt directly with State Farm. Finally, appellees did not purport to represent MFA’s interests during settlement negotiations with State Farm.

True enough, by effecting a settlement of the estate’s tort action within State Farm’s policy limits appellees did indirectly provide services which benefited MFA since the strictures as to priority set forth in KRS 304.39-140 and recognized in KRS 304.39-070(4) were satisfied, and funds thereby became available with which to pay MFA’s claim. Nevertheless, we fail to perceive that the indirect benefit conferred on MFA as a result of State Farm’s settlement within policy limits justifies an award of an attorneys’ fee. As we view the matter, neither the legislature nor the Supreme Court by its decision in Woodall v. Grange Mutual Casualty Company, supra, intended that KRS 304.39-070(5) should be interpreted so broadly.

After all, it is undisputed that State Farm established a reserve to pay MFA’s claim long before appellees even filed a tort action, and refrained from paying the claim only because the provisions of the no-fault statute prohibit payment of an insurer’s subrogation claim until any pending tort action is concluded in a manner which leaves unpaid policy funds available for that purpose. We hold, therefore, that in instances such as this where a reparations obligor has elected to pursue its KRS 304.-39-070 subrogation rights by applying for arbitration rather than by intervening as a party in its insured’s pending tort action, and has not employed the attorneys for the insured to represent its interests, those attorneys are not entitled to the award of an attorneys’ fee under KRS 304.39-070(5) merely because the insurer’s subrogation claim is subsequently paid. It follows that the court’s finding that appellees are entitled to an award of an attorneys’ fee is clearly erroneous. Our conclusion to this point obviates the need to address appellant’s remaining contention as to whether the fee awarded was excessive.

The court’s judgment is reversed and remanded with directions to enter a new judgment dismissing appellees’ complaint.

All Concur.


author: COMBS, Judge.

text:
    AMERICAN DRUGGISTS’ INSURANCE COMPANY, Appellant, v. NATURAL RESOURCES AND ENVIRONMENTAL PROTECTION CABINET, Appellee.
    Court of Appeals of Kentucky.
    April 5, 1985.

      Thomas L. Clark, Denney, Morgan & Rather, Lexington, for appellant.
    John Henriksen, Randall G. McDowell, Frankfort, for appellee.
    Before COMBS, McDONALD and WIL-HOIT, JJ.
   COMBS, Judge.

This is an appeal from a Franklin Circuit Court judgment which affirmed the final order of the Natural Resources and Environmental Protection Cabinet. The appellant seeks to avoid forfeiture of $115,-800.00 in surety bonds guaranteeing reclamation of property mined by M & W Sales, Inc. Appellant asserts that the inaction of the appellee in failing to exercise their statutory duty to reclaim the mined property acted as a discharge of appellant’s responsibility as surety. We disagree.

M & W Sales, Inc. received permits from appellee to strip mine land in Leslie and Perry counties. As part of their application process, M & W obtained two surety bonds from appellant to guarantee compliance with appellee’s regulations. In 1979 and 1980, appellee’s employees issued a number of Notices of Noncompliance to M & W Sales, concerning failure to post required signs and markers, as well as failure to complete reclamation and to have equipment available on the property to reclaim it. The face of the Notices of Noncompliance indicate copies were to be mailed to the appellant, as well as to M & W Sales.

On February i, 1980, M & W Sales, Inc. filed a Chapter 11 Petition in the United States Bankruptcy Court, where an automatic stay was issued and remained in effect until October 1982. In January 1983 appellee instituted proceedings against M & W Sales and appellant, seeking revocation of the mining permits, civil penalties and forfeiture of bond monies. After a hearing in which only appellee presented evidence, a final order was entered on August 24, 1983 by the Secretary for appellee ordering forfeiture of appellant’s surety bonds as well as the other relief sought against M & W Sales.

Appellant then filed a complaint in the Franklin Circuit Court, and that court affirmed the final order of the Secretary.

Appellant argues that its obligation as surety was discharged because appellee failed to assert and exercise their statutory duty to enforce reclamation of the mined property following their 1979 and 1980 Notices of Noncompliance. Appellant argues that the delay in reclamation due to appel-lee’s compliance with the bankruptcy court’s stay has made reclamation of the mined property impossible or much more expensive, to their detriment, and that a surety is discharged under Kentucky law by an act of the beneficiary of the surety contract which alters liability or increases the risk to the surety.

We note that the outside limits of appellant’s liability is set by the face amounts of the surety bonds, and that has not changed. Appellant did not put on any proof before the hearing officer and there is no evidence in the record of costs of the reclamation of the mined areas. Any increased costs to reclaim the property is at best speculative. This court cannot consider matters stated in the briefs unsupported by the record. Ford v. Commonwealth, Ky., 472 S.W.2d 261 (1971). Appellant has not proven any damage or increased liability.

As a compensated surety, appellant had a duty to ensure that its principal reclaimed the permitted areas. “It is the surety’s business to see that the principal performs the duty which he has guaranteed.” Henderson v. Phoenix Ins. Co., 233 Ky., 217, 25 S.W.2d 359, 362 (1930). The appellant knew, or should have known, that M & W Sales was not reclaiming the mined land in a timely manner. The appellant’s surety bonds remained in effect the entire period of time the automatic stay was in effect.. Nothing prevented the appellant from minimizing their loss by undertaking to perform the reclamation or having it done prior to the appellee formally proceeding against M & W Sales.

We also note that the point of having the surety bonds available is to protect the people of the Commonwealth and the environment when a coal operator fails to perform his obligations. It could well be anticipated that bankruptcy proceedings by the operator is a hazard the surety bonds are there to guard against. It should take something more than an anticipated risk of doing business to relieve appellant from performing on its bonds.

The judgment of the Franklin Circuit Court is affirmed.

All concur.


author: LESTER, Judge.

text:
    BLUE CROSS AND BLUE SHIELD OF KENTUCKY, INC., Appellant, v. Gary D. WHITAKER and Nancy E. Whitaker, Appellees.
    Court of Appeals of Kentucky.
    April 5, 1985.

      John C. Watkins, Jr., Louisville, for appellant.
    John Swinford, Swinford & Sims, Cyn-thiana, for appellees.
    Before GUDGEL, LESTER and REYNOLDS, JJ.
   LESTER, Judge.

This is an appeal from a judgment based on a jury verdict which found Blue Cross and Blue Shield guilty of bad faith and awarded consequential damages in the form of attorney fees.

Blue Cross and Blue Shield of Kentucky (hereinafter referred to as Blue Cross) issued a contract to Nancy Whitaker, through her employment, by which it agreed to provide medical insurance to Nancy and her family. Nancy’s husband, Gary became covered by the contract on September 1, 1982.

This contract included a common provision which establishes a nine-month waiting period during which medical services for an illness or condition existing prior to the effective date of the contract are not covered.

In March of 1983, Gary went to see Dr. Richard Allen for hemorrhoid problems. He was treated in the office at that time, but returned two weeks later and was admitted into the hospital for surgery. Subsequently, claims were filed for hospital expense and surgery benefits. As part of its review of the claim, Blue Cross received all the records of the hospital and physician. Included in those records was the history and physical examination report of Dr. Allen. This report stated in part:

He [Mr. Whitaker] has had recurrent trouble with these for over a period of the past two or three years, which have been more severe.

Based largely on this report, Blue Cross made an initial denial of Gary Whitaker’s claim, determining that the hemorrhoid problem was a pre-existing condition.

This was the first of several items of correspondence between Blue Cross, the Whitakers, and the treating physician, Dr. Allen. After the initial denial by Blue Cross, Dr. Allen, by letter, indicated that “the acute thrombosis of the hemorrhoidal veins was a new problem.” Dr. Allen also expressed amazement that the insurer was denying the claim, however, the language of the aforementioned report was never mentioned or contradicted.

It was not until the day before trial that the attorney for Blue Cross and Dr. Allen spoke directly. In that conversation, Dr. Allen revealed that he had made a mistake on the medical report and that the statement that Mr. Whitaker’s problem was two or three years old was incorrect.

At trial, a jury awarded Gary Whitaker his hospital and surgical expenses under the health benefits contract. Blue Cross does not contest that award, but appeals based on the instructions which allowed a finding of bad faith on the part of the appellant.

The appellee devotes a major portion of its brief to a discussion of “pre-existing condition” clauses in health insurance policies, relying upon Inter-Ocean Ins. Co. v. Engler, Ky.App., 632 S.W.2d 459 (1982). While Engler contains an excellent discussion of such exclusion clauses, it is not pertinent to this appeal, as appellant does not contest the decision that Mr. Whitaker’s condition did not exist prior to the effective date of the contract.

Thus, the only issue on appeal is whether this realization on the part of Blue Cross, coming only after the jury verdict, is so dilatory as to entitle appellee to consequential damages.

Until about a year ago, Kentucky courts had uniformly held that damages for breach of a first party insurance policy were limited to the amount due under the contract. [See, e.g., Gen. Accident Fire & Life Assurance Corp. v. Judd, Ky., 400 S.W.2d 685 (1966); Deaton v. Allstate Ins. Co., Ky.App., 548 S.W.2d 162 (1977) ].

However, in Feathers v. State Farm Fire & Cas. Co., Ky.App., 667 S.W.2d 693 (1983), this court recently held that when an insurer wrongfully withholds payment of proceeds under the policy, its insured may recover consequential and punitive damages for the tortious conduct. This decision aligned Kentucky with a growing number of states which have recognized the tort of first party bad faith.

Feathers, in finding that there is no prohibition against the tort of bad faith in Kentucky law, held as follows:

... once the policyholder has substantially complied with the terms and conditions required by the policy, ... then at that point, the insurance company becomes akin to a fiduciary as to the sums that may be owed under the policy. Id. at 696.

While this case opened the door to first-party bad faith claims, we do not feel it should be read as creating a type of strict liability whenever an insurer reasonably believes its insured has not complied with the conditions for payment and is then judged to have been incorrect. 72 Ky.L.J. 141, at 174 (1983-84).

Instead, we believe that an action for bad faith, whether a first-party or a third-party situation, requires something more than mere negligence. The term itself implies some intentional wrongful conduct, as is illustrated by the language of third-party cases such as Manchester Ins. & Indemnity Co. v. Grundy, Ky., 531 S.W.2d 493 (1975). Mere errors in judgment should not be sufficient to establish bad faith. Grundy, at 497. Furthermore, as was stated in Feathers, supra, at 696,

We are not talking about bad manners or mere breakdowns in communications....

The case at bar presents a better illustration of a breakdown in communications than of a bad faith failure to pay.

The evidence is uncontradicted that Blue Cross reviewed the claim initially, asked a medical consultant employed by the appellant to review the claim, and finally sent the claim to an independent KMA Peer Review Committee. In each of the three instances, the claim was denied on the basis of the records, reports, and correspondence. At no time during the investigation of the claim, did it become apparent that the history taken by Dr. Allen of a “two to three year old problem” was a mistake.

Appellees argue that Blue Cross should have checked directly with Dr. Allen, or in the alternative, that when the company learned of the mistake the day before trial, it should have paid the claim, and that its failure to do so was in bad faith. We cannot agree.

While more and more jurisdictions are recognizing actions for first-party bad faith, we have found none which would find a delay of one day, upon learning of the true facts, to be so dilatory as to constitute bad faith. Nor can we find that the investigation of the claim was anything more than negligent, if that.

Absent some proof that Blue Cross acted intentionally, willfully or in reckless disregard of its insured’s rights, we cannot uphold a verdict allowing consequential or punitive damages. Where, as here, a reasonable basis existed for denying the claim, even though ultimately found incorrect, the appellant cannot be charged with bad faith.

Finally, Blue Cross also argued that the court below erred in allowing the jury to award consequential damages in the form of attorney fees. Appellant maintains that such an award cannot be granted absent a statute or contract providing for the same.

While many jurisdictions have provided for attorney fees to be recoverable in bad faith actions, this is a determination more properly left to the legislature. Thus, we can only refer to the language of another recent decision of this court, which stated:

... Kentucky Courts have been consistently reluctant to uphold awards of attorneys’ fees except in those particular instances when such fees are authorized by a statute or a contract expressly providing therefore. White v. Sullivan, Ky. App., 667 S.W.2d 385, 389 (1983).

The judgment of the Harrison Circuit Court is affirmed as to the award of benefits under the contract and reversed as to the finding of bad faith and the award of consequential damages in the form of attorneys fees.

All concur.


author: COMBS, Judge. LESTER, Judge,

text:
    Gary BAUMGARDNER, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    April 5, 1985.
    William D. Wharton, Fayette County Legal Aid, Inc., Lexington, for appellant.
    David L. Armstrong, Atty. Gen., Paul E. Reilender, Jr., Asst. Atty. Gen., Frankfort, for appellee.
    Before COMBS, HOWERTON and LESTER, JJ.
   COMBS, Judge.

This is an appeal from a judgment of the Fayette Circuit Court revoking probation.

In 1979, following appellant’s plea of guilty, he was sentenced to five years’ imprisonment. This sentence was probated for five years. While on probation, he was charged with receiving stolen property. On March 7,1984, he was acquitted by jury verdict. The following day, Judge Mitchell Meade ordered a revocation hearing to be held, and the defendant remanded to custody with no bond allowed. At the hearing, the Judge stated that he disagreed with the jury’s verdict on the receiving stolen property offense and entered final judgment revoking probation. The only ground stated was “... that the defendant has violated the terms of his probation by being convicted in the Fayette Circuit Court.”

The Commonwealth, by its brief, has readily admitted that there are insufficient facts in the record to revoke appellant's probation. Our own examination of the record reveals other violations of appellant’s rights to due process under the laws of this Commonwealth as stated in Murphy v. Commonwealth, Ky.App., 551 S.W.2d 838 (1977). Citing Morrissey v. Brewer, 408 U.S. 471, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972), and Gagnon v. Scarpelli, 411 U.S. 778, 93 S.Ct. 1756, 36 L.Ed.2d 656 (1973), Judge Lester wrote, in part, as follows:-

[Appellee’s] constitutional rights are protected when revocation is being considered if (1) a written notice of claimed violations ... are served, (2) a disclosure of the evidence to be used is made, (3) an opportunity is granted to be heard in person, present witnesses and documentary evidence, (4) confrontation and cross-examination of witnesses is afforded (unless a specific finding for good cause is made to the contrary), (5) a neutral detached hearing body conducts the procedure, and (6) a written statement is made by the fact-finder(s) as to the evidence relied upon and the reasons for revoking parole. We see no distinction between probation and parole because Gagnon deals with the former, while Morrissey the latter.

Our review of the record would indicate that two, if not three, of these grounds have been violated. First, the appellant did not receive notice of the claimed violations of probation. Second, the trial court did not prepare a written statement regarding the evidence relied on and the reasons for revoking probation. The judgment revoking probation states that the appellant was convicted in the Fayette Circuit Court, but the only evidence presented at the hearing was that appellant had been acquitted of the charge against him. Third, the appellant was denied due process because the probation hearing was not held before a neutral and detached hearing body. Judge Meade presided over both cases, and he immediately responded to the acquittal by issuing the order for the revocation hearing. It would appear from the transcript that this hearing was a mere formality.

For these reasons, the judgment of the Fayette Circuit Court is reversed.

HOWERTON, J., concurs.

LESTER, J., concurs by separate opinion.

LESTER, Judge,

concurring.

I agree with the majority, but I believe several comments should be made for clarification purposes.

Murphy, supra, alluded to by my Brother Combs, does rely upon the two United States Supreme Court cases referred to therein. However, I wish to emphasize that there is one distinction made in the Murphy opinion as between the procedural steps before an administrative officer and a court of competent jurisdiction to the effect:

The Supreme Court was speaking in the terms of a procedure before an independent administrative officer (not a parole officer nor necessarily a judicial officer) to determine if there is probable cause or reasonable ground to believe that an act has been committed constituting violation of conditions of probation, while the second hearing must lead to a final evaluation of any contested relevant facts and consideration of whether the facts as determined warrant revocation. We do not believe the foregoing procedure would apply where a court of competent jurisdiction, such as the Mason Circuit Court, conducted the appropriate inquiry.

As to the second point, I would not be ready to agree to an inference that the same circuit judge could not preside over the trial of the substantive offense and the revocation hearing as well. Even though there may be extenuating circumstances requiring another jurist, I would not be disposed to establish a rule or policy whereby a second judge would be a requirement for probation revocation proceedings.


author: MANFORD, Judge.

text:
    Donald HOLMAN, Appellant, v. ACE GLASS COMPANY, Respondent.
    No. WD 35450.
    Missouri Court of Appeals, Western District.
    Nov. 6, 1984.
    Motion for Rehearing and/or Transfer to Supreme Court Overruled and Denied Dec. 26, 1984.
    Application to Transfer Denied April 30, 1985.
    Elwyn L. Cady, Jr., Independence, for appellant.
    A. Warren Francis, Lloyd A. Hamrick, and Jeff O’Connor, Kansas City, for respondent.
    Before TURNAGE, C.J., and SHAN-GLER and MANFORD, JJ.
   MANFORD, Judge.

This is an original action seeking damages for an alleged defamation. The trial court directed a verdict for defendant at the close of plaintiffs case. The judgment is affirmed.

The sole point presented herein charges that the trial court erred in directing a verdict at the close of plaintiffs case because plaintiff, by his evidence, had made a prima facie case for slander per se.

In summary, the facts are as follows.

The only evidence produced by plaintiff-appellant was from one Mark Land, an employee of plaintiff. The Land testimony revealed that in 1980, plaintiff made arrangements to purchase a door from defendant-respondent. In April, 1981, the employee Land received a phone call from an individual identified as Vic at Ace Glass Company. This telephone conversation included reference to an earlier phone conversation between “Vic” and plaintiff. It was during the latter phone conversation (between Vic and Land) that the alleged slanderous statement was made. Land testified that plaintiff-appellant had told Vic that the door purchased in 1980 had already been paid for. Vic called back and directed the following statement to Land: “Tell Don he fed me some-about this door being paid for and it’s not ...” Land testified that this caused him (Land) to wonder about plaintiff’s-appellant’s credibility for at least the twenty minutes that it took Land to seek and locate the can-celled check indicating payment.

The trial court directed a verdict. This appeal followed.

Appellant’s sole point is taken up and after full consideration, is found to be mer-itless and thus ruled against him because of the following reasons:

(1) Missouri recognizes four categories within which statements can be considered slanderous per se. These are (1) those which impute a crime, (2) those regarding a loathsome disease, (3) remarks as to the unchastity of a woman, and (4) those affecting the offended party in his trade and business. Hunt v. Gerlemann, 581 S.W.2d 913, 914 (Mo.App.1979).

(2) Appellant’s contention that the statement attributed to Vic and made to Land comes within (4) above fails for a lack of showing that the alleged statement affected appellant’s trade and business. The general rule regarding business reputation is stated in Arthur v. Jablonow, 665 S.W.2d 364, 366 (Mo.App.1984). The Jablo-now court held:

As a general rule, false words which tend to prejudice the person spoken of in his business, profession ... are actionable without proof of special damages if they affect him in such calling in a manner that may, as a necessary consequence, or does, as a natural consequence, prevent him from deriving therefrom that pecuniary reward which, probably he might have obtained. The words must impute a want of knowledge, skill, capacity, or fitness to perform or discharge the duties of a profession, trade, business or employment, or stated another way, to be actionable per se the words must be defamatory of the plaintiff in such calling in that they impute fraud, want of integrity or misconduct in the line of his calling.

(3) Whether a statement is actionable per se is a question of law which this court may determine. Jablonow, supra. See also Missouri Church of Scientology v. Adams, 543 S.W.2d 776, 777 (Mo. banc 1976) and Restatement of Torts (Second) § 573 (1977). Appellant has offered no evidence that the statement had any effect upon his business or reputation or that it in any manner interfered with his business pursuit.

There is no merit to this appeal. Appellant’s sole point is ruled against him. The trial court did not err in directing a verdict for defendant-respondent.

Pursuant to Rule 84.19, respondent requested the assessment of damages for frivolous appeal. Under the rule, the definition of a frivolous appeal is one which presents no justiciable question and is so readily recognized as devoid of merit on the record that there is little prospect the appeal can succeed. City of Cape Girardeau v. Robertson, 615 S.W.2d 526, 532 (Mo.App.1981). “The purpose of assessing damages for frivolous appeals is to protect the appellate dockets from unmeritorious cases which delay the resolution of cases with merit and to compensate respondents for expenses incident to the appeal.” Woodley-Griggs Boiler Repair, Inc. v. Sanders, 626 S.W.2d 410, 413 (Mo.App.1981). In order to avoid such a penalty, the issues on appeal must be at least fairly debatable. The instant case comes within the rules announced by Robertson and Sanders, supra. There is hereby assessed damages in the sum of five hundred dollars ($500.00) against appellant to the favor of respondent.

The judgment is affirmed.

All concur.


author: PRITCHARD, Judge.

text:
    TOWER MANAGEMENT, INC., d/b/a Blue Ridge Village, Respondent, v. Namon HENRY, Jr., and Minnie Henry, Appellants.
    No. WD 35279.
    Missouri Court of Appeals, Western District.
    Dec. 26, 1984.
    Motion for Rehearing and/or Transfer to Supreme Court Overruled and Denied March 5, 1985.
    Application to Transfer Denied April 30, 1985.
    Kit C. Roque, Kansas City, for appellants; Gray, Payne & Roque, Kansas City, of counsel.

      Michael E. Dailey, Kansas City, for respondent.
    Before CLARK, P.J., and PRITCHARD and LOWENSTEIN, JJ.
   PRITCHARD, Judge.

This case was begun by respondent by its filing of its petition on November 12, 1982, for rent and possession of an apartment rented to appellants at 10500 East 42nd Street, Kansas City, Missouri, in the Associate Circuit Court. After trial, a judgment for restitution of the premises and for $1,625.00 rent, plus rent at $325.00 per month until restitution was made, was entered. An application for trial de novo was filed in the circuit court, but that court remanded the case to the associate circuit court because its judgment had not disposed of the claim against co-defendant, the respondent Minnie Henry. On February 28, 1983, the associate circuit court, upon the agreement and stipulation of both counsel, entered a new judgment against both appellants to include rent accrued since the date of the original judgment in the total amount of $2,275.00. It was further stipulated that appellants were still in possession of the premises. Appellants again timely filed their application for trial de novo.

According to appellants’ Exhibit 8, they deposited $3,500.00 in cash as an appeal bond on their first application for trial de novo, and an additional $1,050.00 cash bond on the second application for trial de novo, after the associate circuit judge increased the judgment upon remand.

After the case was finally lodged in the circuit court for a trial de novo, appellants filed, for the first time, an answer and a Count II pleading denominated as a “counterclaim” on August 16, 1983. By the counterclaim pleading, appellants sought a diminution in the value of the leasehold resulting from respondent’s alleged failure to provide heating and air conditioning to the apartment, a theory of breach of an implied warrant of habitability. The trial court expressed some concern about its jurisdiction over the matter because it had not been pleaded in the associate circuit court. No objection was ever made by respondent to the filing of the counterclaim, and since the trial court had subject matter jurisdiction over the issue, the late filing must be considered to have been waived. The trial court did not rule the case on any failure of appellants to plead the counterclaim first in associate circuit court as required by § 512.290, RSMo [amended by L.1978, p. 696, § A (§ 1), eff. Jan. 2, 1979], but proceeded to rule the issue of breach of the implied warranty of habitability.

The trial court ruled the question of appellants’ right to maintain their defense of breach of an implied warranty of habitability upon the case of King v. Moorehead, 495 S.W.2d 65 (Mo.App.1973), where at page 77[15, 16], the court said, “Breach of this duty [of implied warranty of habitability] justifies retention of possession by the tenant and withholding of rent until habitability has been restored. A tenant who retains possession, however, shall be required to deposit the rent as it becomes due, in custodia legis pending the litigation. (Citing cases.) This procedure assures the landlord that those rents adjudicated for distribution to him will be available to correct the defects in habitability, and will also encourage the landlord to minimize the tenant’s damages by making tenantable repairs at the earliest time. Also, for good cause and in a manner consistent with the ultimate right between the parties, a trial court will have discretion to make partial distribution to the landlord before final adjudication when to deny it would result in irreparable loss to him.” Appellants’ trial counsel, Mr. Kit Carson Roque, acknowledged to the trial court, “There is no question that the rent has not been — was not deposited in custodial (sic) legis.” Upon this record, the trial court entered a judgment for $4,550 rent, $2,645 late charges and $2,475 attorney fees, possession and court costs, there being no objection to the evidence of rent due, late charges and attorney fees (as provided for in the lease).

Appellants nonetheless insist that their $4,550 cash appeal bond satisfied the requirement that the rent, as it became due, be deposited into court. The appeal bond serves but two purposes — to prevent execution on the associate circuit court judgment pending trial de novo, and to ensure that the bond will be applied to any final judgment rendered by the circuit court. It is not available as a fund for the trial court to distribute, in accordance with the Moorehead case, supra, to the landlord for reimbursement for making the premises habitable pending adjudication of the issue.

Appellants make complaint about their counsel’s representation of them throughout. Any such issue cannot be reached on this appeal. On the state of the record, there is no alternative than to affirm the judgment. It is so ordered.

All concur.


author: CLARK, Presiding Judge.

text:
    OSAGE OUTDOOR ADVERTISING, INC., Appellant, v. STATE HIGHWAY COMMISSION OF MISSOURI, Respondent.
    No. WD 35357.
    Missouri Court of Appeals, Western District.
    Dec. 26, 1984.
    Motion for Rehearing and/or Transfer to Supreme Court Overruled and Denied March 5, 1985.
    Application to Transfer Denied April 30, 1985.

      Alex Bartlett, Bartlett, Venters, Pletz & Toppins, Jefferson City, for appellant.
    Bruce A. Ring, Chief Counsel, Dennis J. Redel, Asst. Counsel, Missouri Highway and Transp. Com’n, Jefferson City, for respondent.
    Before CLARK, P.J., and NUGENT and LOWENSTEIN, JJ.
   CLARK, Presiding Judge.

Osage Outdoor Advertising, Inc. appeals, in this consolidated proceeding, the circuit court judgments which affirmed decisions by the Highway and Transportation Commission ordering the uncompensated removal in four separate cases of signs maintained by Osage. In common with a number of prior cases, many of which involved this appellant, the question in each case is the lawfulness of the commission’s removal orders.

BOONE COUNTY SIGN

The subject sign was first erected in December, 1967 on four support poles with a sign surface of 300 square feet. Between April 12, 1972 and March 20, 1973, the sign was partially reconstructed by addition of one more support pole and 60 square feet of sign area. In May, 1974, the Commission notified Osage that the sign was to be removed. Although such notices usually rely on one of the specified removal causes set out in § 226.580, RSMo 1978, the notice in this case showed the cause for removal to be the enlargement of a previously licensed sign. Osage contends the removal notice was invalid because it cited no cause listed in § 226.580.

The prohibition against enlargement of non-conforming signs is found in 7 CSR 10-6.060(3)(c), and it is undisputed that the Boone County sign was in violation of that regulation. In Boyce Industries Inc. v. Missouri Highway and Transportation Commission, 670 S.W.2d 147 (Mo.App.1984), the court denied a contention that removal of a sign could not be ordered on the ground of a change in materials prohibited under 7 CSR 10-6.060(3)(B), despite the absence of such cause for removal in the listing of § 226.580. The regulations, required by federal law to obtain federal funding, are authorized by § 226.530 and are enforceable as law if the regulations are of minimum necessity.

Osage recently posed the same question in an appeal to this court from a removal order based on sign location. We there held the Commission was not limited in uncompensated sign removal orders to signs violating only the conditions listed in § 226.580. This case is another facet of the same argument and is controlled by the analysis in Osage Outdoor Advertising, Inc. v. Missouri Highway and Transportation Commission, 680 S.W.2d 162 (Mo.App.1984), as modified October 30, 1984 and by Boyce, supra. The order for removal of the Boone County sign was lawful.

LACLEDE COUNTY SIGN

This sign dates from 1961 at a location now adjacent to Interstate Highway 44 in an unincorporated area not subject to county zoning. In 1972, the sign was damaged in a storm to the extent that the only remaining structure was two upright posts connected by one cross member. Osage undertook what purported to be repair of the storm damage, but in the process, enlarged the surface area of the sign to a size more than two-thirds larger than that which had existed before the storm. The Commission determined that the extent of repair had been such as to amount to the erection of a new sign and, because the sign was in violation of the location provisions of §§ 226.520 and 226.540, it was ordered removed.

Osage initially challenges the factual determination that the repairs in this instance amounted to the erection of a new sign. The function of determining such facts rests in the first instance with the administrative agency. Judicial review of the agency’s findings of fact is limited to determining whether the decision is supported by competent and substantial evidence on the whole record and, if the evidence would warrant either of two opposed findings, an appellate court must uphold the factual determination the agency has made. Overland Outdoor Advertising Co., Inc. v. Missouri State Highway Commission, 616 S.W.2d 563 (Mo.App.1981).

A case similar to this on the facts is State ex rel. National Advertising Co. v. State Highway Commission, 624 S.W.2d 453 (Mo.App.1981). There, all that remained of the previous sign before repairs were undertaken was a single support pole. The company replaced the advertising panels and the support members and such was held to constitute competent and substantial evidence supporting a finding by the commission that the repairs constituted construction of a new sign. In this case, the extent of repair was comparable in terms of the quantity of new material required to restore the sign and, in addition, the sign in the subject case was substantially enlarged. The Commission properly exercised its authority to order the uncompensated removal of the sign as a new sign unlawfully located. Independent Stave Co. v. State Highway Commission, 625 S.W.2d 246 (Mo.App.1981).

Osage alternatively argues that this sign was not erected after Senate Bill 382 became effective in 1972 because, they contend, the emergency clause was not effective. Absent emergency advancement of the date for the statute, the repairs to the Laclede County sign were accomplished before the normal effective date, ninety days after the adjournment of the General Assembly, and Senate Bill 382 does not apply.

The statute in question was enacted under an emergency clause which explained:

“Because it is imperative that Missouri meet certain federal requirements, and because Missouri will not be able to participate in certain federal programs until additional legislation is adopted, and because this bill will make it possible to meet those requirements, this act is deemed necessary for the immediate preservation of the public health, welfare, peace and safety, and is hereby declared to be an emergency act within the meaning of the constitution, and this act shall be in full force and effect upon passage and approval.” Laws of Mo. 1972 p. 863.

Appellant did not question the effect of the emergency clause or raise any issue in this regard in proceedings before the Commission or the trial court. By failing to raise this issue at its first opportunity, Osage has waived its right to raise the issue for the first time on appeal. Mills v. Federal Soldiers Home, 549 S.W.2d 862, 868 (Mo. banc 1977). However, assuming the point may be properly addressed, we hold the emergency clause was effective. Affixing an emergency clause to a statute does not, of itself, make it an emergency measure within the meaning of the law. Hatfield v. Meers, 402 S.W.2d 35 (Mo.App.1966). The legislative declaration of an act to be an emergency measure is entitled to great weight but is not conclusive, because the courts possess the final authority to determine whether an emergency in fact exists. Padberg v. Roos, 404 S.W.2d 161, 170 (Mo. banc 1966). The test of whether an emergency exists is whether the factual situation is such that there is actually a crisis or emergency which requires immediate action for the preservation of the public peace, property, health, safety or morals. State ex rel. Tyler v. Davis, 443 S.W.2d 625, 631 (Mo. banc 1969). See also State ex rel. State Highway Comm’n v. Thompson, 19 S.W.2d 642 (Mo. banc 1929).

This is such a case. After the federal Highway Beautification Act of 1965 was originally enacted, the Missouri legislature passed the first comprehensive outdoor advertising control law, S.B.8, effective January 1, 1968. Pursuant to the federal statute, the state was required to effectively regulate the outdoor advertising structures or be penalized 10% of their federal highway appropriation. Nevertheless, the enforcement of the Missouri law was lax and no comprehensive program was effectuated.

On February 10, 1972 the 10% penalty was imposed by the United States Secretary of Transportation against the state for failure of S.B.8 to provide the “effective control” required. Subsequently, the Secretary agreed to suspend the penalty if Missouri would agree to Federal Highway Administration guidelines for effective control and implement the regulations by legislation before March 31, 1972. National Advertising Co. v. State Highway Comm’n, 549 S.W.2d 536 (Mo.App.1977). The legislature immediately passed the required provisions effective March 30, 1972.

This sequence of events demonstrates the necessity for immediate action by the legislature and prompt enactment of the law. Before February 10,1972, the legislature could rely upon S.B.8, the 1968 law, for compliance with the federal mandate. Thereafter it became necessary to pass new legislation effective before March 31, 1972 to avoid the loss of federal funds. That result could only be accomplished by use of an emergency clause.

The facts here support the legislative declaration that this bill truly was an emergency measure. The law was effective March 30, 1972 and appellants contention otherwise is meritless.

BUCHANAN COUNTY SIGN

At a date after March 30, 1972, this sign was erected pursuant to a permit issued by the Buchanan County Zoning Commission. The site bears an agricultural zoning imposed by the county. The site is also within 660 feet of an interstate highway and thus was in violation of the location provisions of §§ 226.520 and 226.540. The removal order was issued accordingly.

Osage contends the sign is lawful because it was erected under authority of the permit issued by Buchanan County. For this proposition, Osage relies on § 226.-520.3 and State ex rel. Missouri Highway and Transportation Commission v. Bank of St. Ann, 631 S.W.2d 73 (Mo.App.1982).

Section 226.520.3 was recently interpreted in the ease of Superior Outdoor Advertising Co. v. State Highway Commission, 641 S.W.2d 480 (Mo.App.1982) upon circumstances in Greene County identical to the facts here. The court there said:

“Although the statute permits the local zoning authority to enact reasonable regulations with respect to certain features of signs located within the area of the local zoning authority, those regulations are ‘in addition’ to the regulations prescribed by the state and set forth in the Billboards Act. As a matter of sovereignty the county may not permit that which the state forbids.” Id. at 485.

A more recent case from this court, Stephenson’s Restaurants, Inc. v. Missouri State Highway and Transportation Commission, 666 S.W.2d 437 (Mo.App.1984), adopted a like position. The Stephenson sign violated the spacing requirements of § 226.540.3(a) because it was within 250 feet of a pre-existing sign and it was ordered removed. The owner argued the sign was not unlawful because Stephenson’s had secured a permit for the sign from Kansas City under authority of the city sign ordinance. The court held that the state spacing requirement must prevail over the less restrictive city permit conditions.

It must be conceded that the last cited cases, Superior Outdoor and Stephenson’s, are in conflict with the Bank of St. Ann case on which Osage relies. The Bank of St. Ann case was a condemnation action and the question was whether evidence of the value of the sign located on the property taken should have been excluded on the basis that the sign was within 660 feet of an interstate highway and unlawful under the billboards law. The court there relied on the city issued special use permit to hold that the sign was not illegal because it was maintained under “other authority of law” defined in § 226.-520.3.

The Bank of St. Ann case appears to stand alone and we decline to follow it. The more recent cases from this district and from the Southern District are squarely in point and conform to the general rationale of cases applying the Missouri Billboard Act. The Buchanan County sign was properly ordered removed.

CLINTON COUNTY SIGN

The history of this sign appears to have commenced before 1968 when it was owned by Lent Advertising. Osage acquired the sign in 1968 at which time the boards advertised the Sheraton-Elms. Sometime later, probably in 1971 or early 1972, the face of the sign was taken off and the ground owner removed all but two or three of the support poles. A permit application by Osage was rejected December 19, 1972 because no advertising message was on the sign. Subsequently, an advertisement for Worlds of Fun was placed on the sign.

This case involves points previously addressed in the cases of the Laclede and Buchanan County signs. As to the question of repair or reconstruction, the Commission rejected Osage’s claim that the sign was not erected after March 30, 1972, but was merely repaired. The extent of prior demolition of the original Lent Advertising sign and the reconstruction were comparable to the facts as related in the Laclede County sign case. Here, too, there was substantial and competent evidence to support the Commission’s finding of fact that the sign was a new sign erected after March 30, 1972.

The second point here, as advanced in the case of the Buchanan County sign, is that Osage claims lawful entitlement to maintain the sign under authority of the local zoning ordinances of Clinton County. The sign was, however, within 660 feet of an interstate highway and unlawful as to its location. On the same grounds discussed in the case of the Buchanan County sign, the statute prevails over the local ordinance and the sign must be removed.

The judgment of the circuit court affirming the order of the Highway and Transportation Commission for uncompensated removal of the four signs is affirmed.

All concur.

      . All citations are to RSMo 1978 and to the predecessor of each as current on the dates in question.


author: CLARK, Judge.

text:
    STATE of Missouri, Respondent, v. Paul and Shirley DAVID, Appellants.
    No. WD 35666.
    Missouri Court of Appeals, Western District.
    Dec. 26, 1984.
    Motion for Rehearing and/or Transfer to Supreme Court Overruled and Denied March 5, 1985.
    Application to Transfer Denied April 30, 1985.
    Thomas E. Hankins, Gunn, Hall & Stahl, Gladstone, for appellants.
    Philip M. Koppe, Asst. Atty. Gen., Kansas City, for respondent.
    Before KENNEDY, P.J., and DIXON and CLARK, JJ.
   CLARK, Judge.

Appellants, husband and wife, were jointly charged, tried and convicted of the offense of felony stealing, § 570.030, RSMo; Supp.1982, and each was sentenced to a term of three years imprisonment. In the dispositive point on this appeal, they contend the state’s evidence did not make a case against them for violation of the criminal statute under which they were charged. Reversed.

The following are the facts of the case construed most favorably to the state and granting the state the benefit of all favorable inferences. State v. Franco, 544 S.W.2d 533 (Mo. banc 1976), cert. denied, 431 U.S. 957, 97 S.Ct. 2682, 53 L.Ed.2d 275 (1977). Appellants operate a business known as Holt County Farm Supply. One of the aspects of appellants’ business is a service to farmers in which appellants provide marketing for grain crops. One Rodney Wales had been a customer of appellants in the past and in July, 1983, he engaged appellants to haul and sell a quantity of corn. The practice in such transactions was for appellants to load the grain, transport it to an elevator and sell it as property belonging to Holt County Farm Supply. Upon receipt of payment, appellants would then settle with the farmer based on the price obtained. For reasons not fully explained in this record, a sale under appellants’ name as the transporter of the produce yielded a slightly higher price which appellants then passed on to the farmer. Prior transactions of this nature between appellants and Wales had been without untoward incidents.

In August, 1983, Wales engaged appellants to haul and sell a quantity of soybeans. The first quantity was loaded, hauled and sold to Far-Mar-Co August 4, 1983. Appellants received payment by checks issued to their order in the total sum of $15,504.18. The checks were deposited to the Holt County Farm Supply account and thereafter, appellants issued Wales a check in like amount.

On August 5, 1983, additional beans of Wales were similarly loaded, hauled and sold by appellants, in this instance to Bartlett and Company. The price paid by Bartlett was $7.46 per bushel for a total amount of $7,247.38. Again, the payment check was made out to Holt County Farm Supply and was deposited to their bank account. It is this latter sale of soybeans which gave rise to the criminal charge.

Apparently, some problem existed with the condition of the beans which had been in storage for a period of time and had suffered some deterioration. After the sale, appellants told Wales the beans had been sold under a lower grade because of their condition and the price obtained had been $3.50 a bushel. This representation was false and understated the actual price by $3847.16. Appellants settled with Wales on the lower price. The gist of the charge against appellants was that they appropriated currency in the sum of $3847.16 owned by Rodney Wales by deceit. That appropriation occurred, according to the prosecution, when appellants gave their check to Wales for less than the amount due but represented the accounting to be in full.

Section 570.010.3, RSMo.Supp.1982 states that “appropriate” for purposes of the stealing statute means to take, obtain, use, transfer, conceal or retain possession of property of value. The question here is whether appellants appropriated the property of Wales when they retained a portion of the sale price realized for the beans and paid Wales less than the amount received.

This question was considered in a broad context in the .case of State v. Hardin, 627 S.W.2d 908 (Mo.App.1982). There, Hardin had entered into an agreement with parties named Cridlebaugh to sell them a truck and received from them checks totaling $16,000.00. Cridlebaughs never obtained title to the truck and after some discussions, Hardin agreed to refund the payment in exchange for return of the truck. Hardin gave the Cridlebaughs his check for $16,000.00. When the check was deposited, however, it was returned because Hardin had stopped payment. In fact, Hardin’s bank account had a balance of less than $200.00. The charge against Hardin was for violation of § 570.030 in the appropriation of $16,000.00, the property of Cridle-baughs, by deceit in issuance of the check with intent that it not be honored.

The court observed in Hardin that the appropriation by retaining possession as defined in § 570.010(3) speaks to embezzlement or fraudulent conversion where an agent, bailee, fiduciary or other person entrusted with possession of property of another converts the property to his own use. When the course of dealings between parties gives rise to a debtor-creditor relationship, the failure of the debtor to account to his creditor is insufficient to support a criminal prosecution. Hardin was, in this instance, no more than debtor to the Cridle-baughs and his issuance of a worthless check on which he intended to and did stop payment did not result in commission of the offense of stealing.

The Hardin case was cited by the Southern District in the more recent case of State v. Neal, 680 S.W.2d 310 (Mo.App.1984). There, Neal obtained a sum of cash from an undercover patrol officer for the ostensible purchase of drugs. The understanding was that Neal would return in thirty or forty minutes with the merchandise at which point, the trooper apparently intended to make the arrest. Neal, however, did not return and he was later apprehended and charged with stealing the purchase money. The court held there was no stealing, merely a failure to perform the purchase and sale agreement and a failure of the debtor to account. This concept of separating criminal and civil cases was succinctly stated in the early case of State v. Claybaugh, 138 Mo.App. 360, 122 S.W. 319, 321 (1909), cited in Hardin, where it is said: “The criminal courts are neither a collection agency nor a forum for the trial of mere disputes over the ownership of property.”

In the present case, Wales delivered his soybeans to appellants with the full understanding and knowledge that appellants had authority to sell the beans as their own and receive payment from the elevator. From past transactions, Wales also was aware that his payment for the value of the beans would come from appellants and not from the grain elevator dealer. Thus, when appellants were paid by Bartlett, they rightfully took the money as their own, subject only to a general debt to Wales for the balance they owed him. There was no appropriation of currency belonging to Wales, within the scope of § 570.030 as the information charged, only a failure by appellants to satisfy the full extent of their debt to Wales arising out of the transaction. Notwithstanding the false representation to Wales that the beans had sold for a lower price, appellants’ conduct did not offend against the criminal statute under which they were prosecuted.

As a consequence of disposition of this point, no discussion of other points set out in appellants’ brief is necessary. The judgment and sentences are reversed and appellants are ordered discharged.

All concur.