Opinion
NO. 2011-CA-001749-MR
02-08-2013
NATIONAL SERVICE INDUSTRIES, INC. APPELLANT v. FRANCES SKAGGS, INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF ELLIOTT SKAGGS, DECEASED APPELLEES
BRIEFS FOR APPELLANT: Sean S. Land Owensboro, Kentucky BRIEF FOR APPELLEES: Paul J. Kelley Louisville, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM MUHLENBERG CIRCUIT COURT
HONORABLE BRIAN WIGGINS, JUDGE
ACTION NO. 06-CI-00289
OPINION
AFFIRMING
BEFORE: MAZE, MOORE AND TAYLOR, JUDGES. MAZE, JUDGE: National Services Industries, Inc. (NSI) appeals from an order of the Muhlenberg Circuit Court denying its motion for a new trial following a jury verdict in favor Frances Skaggs, individually and as Executrix of the estate of Elliott Skaggs (Skaggs). NSI maintains that it did not receive notice that the damages trial in this case had been re-scheduled and consequently its failure to attend that trial should be excused and a new trial granted. Although the record suggests some irregularities in the entry of the order re-scheduling the trial, we agree with the trial court that NSI failed to present sufficient evidence showing either that it lacked actual notice of the trial date or that it exercised due diligence in seeking that information. Hence, we affirm the trial court's denial of NSI's motion for a new trial.
On June 20, 2006, Skaggs brought this claim for damages arising out of her husband's death as a result of his exposure to asbestos during the course of his work with the Tennessee Valley Authority. In the complaint, Skaggs named NSI and other parties who were potentially liable for the asbestos exposure. NSI filed a timely answer to the complaint and participated in the litigation over the following four years.
By 2010, Skaggs had resolved her claims with all other parties except NSI. On May 24, 2010, the trial court entered an order setting the matter for a pretrial conference on December 14, 2010, and for trial on March 22, 2011. Shortly before the entry of this order, on May 21, 2010, the law firm of Woolf, McClane, Bright, Allen and Carpenter, PLLC moved to withdraw as co-counsel for NSI. However, it requested that all future pleadings be sent to NSI's Kentucky counsel, Ben T. White, at Phillips, Parker, Orberson & Arnett. On June 15, 2010, the trial court entered an order granting co-counsel's motion to withdraw and directing that all pleadings be sent to White.
Thereafter, on July 22, 2010, White and his firm filed a motion to withdraw as counsel for NSI. In the motion, White requested that all future pleadings be sent to Michael Marks, Senior Vice President and General Counsel for NSI, and Michael Kelly, Chairman and Chief Executive Office of Kelly Capital, LLC, NSI's majority shareholder. As a basis for the motion to withdraw, White stated that "irreconcilable differences" had developed between him and NSI. The trial court granted the motion on August 4, 2010.
Skaggs proceeded with discovery and disclosures in accord with the trial court's pre-trial scheduling order. On November 3, 2010, the pre-trial conference was re-scheduled for December 22, 2010. While the certificate of service indicates that notice was sent to Marks and Kelly, no one appeared on NSI's behalf at the pre-trial conference.
On February 1, 2011, Skaggs filed a motion for partial summary judgment on the issues of causation and liability. While the certificate of service again indicates that notice was sent to Marks and Kelly, no one appeared for NSI when the motion was presented on February 7, 2011. Consequently, the trial court entered the summary judgment order tendered by Skaggs.
Over the course of the next month, Skaggs filed requests for admissions and production of documents, exhibit list and deposition designations, witness and itemized damages lists, and proposed jury instructions. NSI did not file any responses or submit any documents, exhibit lists, deposition designations or proposed jury instructions. Due to a power outage on March 22, 2011, the original trial date was re-scheduled to May 24, 2011.
The remaining matter of damages proceeded to a jury trial on May 24, 2011. NSI did not appear at trial. At the conclusion of the trial, the jury awarded Skaggs compensatory damages totaling $10,729,567.55 and punitive damages of $25,000,000.00. The trial court then directed Skaggs to tender a judgment in conformity with the jury's verdict.
After receiving notice of the jury's verdict, NSI filed a motion for a new trial pursuant to Rule of Civil Procedure (CR) 59 on June 6, 2011. In support of the motion, Marks filed an affidavit stating that he received notice of all pleadings and orders filed after August 4, 2010, except for the order re-scheduling the trial to May 24, 2011. Based on its lack of notice and inability to defend at trial, NSI moved to set aside the jury verdict and for a new trial. After considering the motion and Skaggs's response, the trial court denied NSI's motion for a new trial on August 26, 2011. This appeal followed.
A trial court is vested with broad discretion in granting or denying a new trial, and its decision will not be reversed unless it was "arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999). Since the trial court had the direct opportunity to consider the evidence and the conduct of the parties, any doubts must be resolved in favor of the trial court. CertainTeed Corp. v. Dexter, 330 S.W.3d 64, 73 (Ky. 2010). In its brief on appeal, NSI suggests that there were procedural errors in the entry of the partial summary judgment for Skaggs and that Skaggs failed to comply with the pre-trial order deadlines for filing dispositive motions, completion of discovery and submission of proposed instructions. However, NSI does not seek to set aside the trial court's partial summary judgment on causation and liability and does not argue that it is entitled to a new trial based on Skaggs's failure to comply with the pre-trial order. Rather, NSI argues only that it is entitled to a new trial because it did not receive notice of the re-scheduled trial date.
In its order denying NSI's motion, the trial court found that NSI had failed to provide a sufficient basis to warrant a new trial, stating as follows:
Specifically, the Defendant has not presented any evidence supporting its claim of "meritorious defenses" to the Plaintiff's damages evidence. Moreover, the Defendant has not presented sufficient evidence for this Court to conclude that it was unaware of the May 24, 2011 trial date. Finally, and most importantly, even if the Defendant was not aware of the trial date in question, this unawareness resulted from its intentional inaction. As stated by the Plaintiffs, CR 77.04(4) clearly states that the "[f]ailure of the clerk to serve such notice [of entry of any judgment or order] shall not affect the validity of the judgment or order." Litigants "must keep track of their cases and take notice of the time of trial..." Burns v. Brewster, 338 S.W.2d 908 (Ky. 1960).
The trial court's ruling on this matter was supported by the record and did not amount to an abuse of its discretion. Although NSI asserts that it has meritorious defenses to Skaggs's claims, it does not identify any of those defenses nor does it specifically argue that the jury's verdict was not supported by the evidence. In addition, as noted above, Marks acknowledged receipt of all pleadings and orders except the order re-scheduling the trial. That order does not indicate that it was served on NSI. Nevertheless, NSI clearly was aware that there had been a trial scheduled for March 22, 2011, and Marks admitted that he was aware that the scheduled trial did not take place.
The order re-setting the trial date was signed and entered by the trial court on March 28, 2011. That order lists the names and addresses of Skaggs's counsel (who tendered the order) but not Marks and Kelly. The clerk's docket entry for this order also contains the curious notation "WAS NOT PUT IN TILL 6/1/11". NSI interprets this to mean that the re-scheduling order was not put into the file until after the May 24 trial. However, NSI did not call anyone from the circuit clerk's office to explain the notation.
Furthermore, the record does not show any participation by NSI after its prior counsel withdrew. Marks's affidavit states that NSI considered this matter to be "dormant" after local counsel withdrew, even though there was an approaching trial date. NSI did not respond to Skaggs's requests for additional discovery or the motion for partial summary judgment. While Marks and Kelly are attorneys, they are not licensed to practice in Kentucky and did not move to be admitted pro hac vice for purposes of the trial. Indeed, no counsel filed an entry of appearance for NSI until after the May 24 , 2011, trial.
We also note that the trial court gave NSI an opportunity to present additional affidavits regarding its settlement communications with Skaggs's counsel leading up to the March 22, 2011, trial date. The supplemental affidavits indicate that some settlement negotiations took place between NSI's national counsel and Skaggs's co-counsel between March 15-17, 2011. However, the e- mail communications were very general and did not discuss the approaching trial date.
Thus, even if NSI did not receive notice that the trial had been rescheduled to May 24, 2011, we agree with the trial court that its failure to participate at that trial was caused by its own lack of attention and was not due to any failure to receive notice. While the sheer size of the jury's verdict gives this Court some pause, this issue was not raised on appeal and NSI still has the burden of presenting sufficient evidence to support its motion for a new trial under CR 59.01. We agree with the trial court that NSI failed to meet that burden. Therefore, the trial court did not abuse its discretion by denying NSI's motion for a new trial.
Accordingly, the judgment of the Muhlenberg Circuit Court is affirmed.
ALL CONCUR. BRIEFS FOR APPELLANT: Sean S. Land
Owensboro, Kentucky
BRIEF FOR APPELLEES: Paul J. Kelley
Louisville, Kentucky