Opinion
NO. 2018-CA-000752-MR
06-21-2019
3 BRIDGES, INC. APPELLANT v. J. W. LUTTRELL AND WILBERT PERKINS APPELLEES
BRIEF FOR APPELLANT: Douglas C. Howard Frankfort, Kentucky BRIEF FOR APPELLEES: James Dean Liebman Frankfort, Kentucky
NOT TO BE PUBLISHED APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE PHILLIP J. SHEPHERD, JUDGE
ACTION NO. 14-CI-00755 OPINION
AFFIRMING
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BEFORE: ACREE, LAMBERT, AND SPALDING, JUDGES. SPALDING, JUDGE: This appeal challenges a judgment of the Franklin Circuit Court dismissing as time-barred appellant's action for conversion of a large quantity of railroad ties. We affirm.
In a complaint filed on June 17, 2014, appellant 3 Bridges alleged that it had reached an agreement with appellee Luttrell permitting 3 Bridges to store railroad ties on Luttrell's property. In return, Luttrell was to receive $1.00 per tie as they were sold. Thereafter, 3 Bridges purchased a load of railroad ties from the RJ Corman Railroad Company which delivered the ties to Luttrell's property sometime in September 2011. The complaint also alleged that when the number of ties being unloaded reached approximately 3648, Luttrell refused to allow the railroad company to unload the remaining ties and that he failed to notify 3 Bridges he wouldn't accept any more ties.
3 Bridges also alleged that sometime in August 2012, it became aware that Luttrell had permitted appellee Wilbur Perkins to remove the ties from Luttrell's property without the knowledge or approval of 3 Bridges. Thereafter, 3 Bridges filed the underlying action seeking damages from Luttrell and Perkins in the amount of $23,201.28 stemming from the alleged conversion of the ties. In separate responses, Luttrell and Perkins denied the allegations set out in the complaint. In addition to citing the affirmative defense of the statute of frauds, Luttrell specifically reserved the right to assert any other affirmative defense warranted by the proof adduced in the litigation.
In September 2017, Luttrell and Perkins filed a motion seeking dismissal of the complaint on the basis that it had not been filed within the applicable statute of limitations. After hearing argument of counsel, the circuit court entered an order dismissing the action on the basis that it was time-barred under Kentucky Revised Statutes ("KRS") 413.140(1)(j) and KRS 413.125. This appeal followed.
As a preliminary matter, we address appellees' argument that 3 Bridges' brief should be stricken for non-compliance with CR 76.12(4)(c)(v). That rule explicitly requires every appellate brief to include "ample supportive references to the record" and "a statement with reference to the record showing whether the issue was properly preserved for review and, if so, in what manner." As was the case in Smothers v. Baptist Hospital East, 468 S.W.3d 878 (Ky.App. 2015), 3 Bridges' brief does not contain a single reference to the record either in its statement of the case or in its arguments. Neither do we find any statements whatsoever regarding preservation. This Court in Smothers emphasized that:
Failing to comply with these rules is an unnecessary risk the appellate advocate should not chance. Compliance with CR 76.12 is mandatory. Although noncompliance with CR 76.12 is not automatically fatal, we would be well within our discretion to strike the brief or dismiss the appeal for Smothers' failure to comply with the rules. While we have chosen not to impose such a harsh sanction, we caution counsel that such latitude may not be extended in the future.Id. at 881-82 (internal citation omitted). We have elected to follow the example of leniency set out in Smothers and decline to impose the harsh penalty for non-compliance set out in CR 76.12(8)(a). Accordingly, we have undertaken our own review of the relatively brief record in this appeal. However, we again caution counsel that "such latitude may not be extended in the future." Id.
Turning now to the merits, we agree with the trial court that the complaint was not filed within the applicable statute of limitations and must be dismissed. The appropriate statute to be applied in this case is KRS 413.125 which provides that "[a]n action for the taking, detaining or injuring of personal property, including an action for specific recovery shall be commenced within two (2) years from the time the cause of action accrued." The trial court correctly concluded that, in this case, the cause of action accrued no later than September 2011, the date on which 3 Bridges alleges that it was denied access to Luttrell's property.
Terry Sutton, the sole owner of 3 Bridges, testified both in his deposition and by affidavit that in September 2011, Luttrell informed him that he was not to enter Luttrell's property to remove any ties. Like the trial court, we are convinced that upon being denied access to the railroad ties, 3 Bridges discovered that it had been injured by Luttrell. This view of the discovery rule was approved by the Supreme Court of Kentucky in Perkins v. Northeastern Log Homes, 808 S.W.2d 809, 819 (Ky. 1991), which held that "the statute of limitations commences from the date the plaintiff knew or should have discovered 'not only that he has been injured but also that his injury may have been caused by the defendant's conduct.'" Id. at 819.
Furthermore, we are convinced that the more lenient two-year limitations period set out in KRS 413.125 is the proper statute to apply to a conversion claim. Instructive in this regard is the analysis set out by the federal district court for the western district of Kentucky in Madison Capital Co., LLC v. S & S Salvage, LLC, 794 F. Supp. 2d 735, 741-42 (W.D. Ky. 2011), aff'd, 507 F. App'x 528 (6th Cir. 2012). Recognizing that the interpretation of state law by federal courts is not binding on state courts, we nevertheless adhere to the principle that a federal court's view of state law may certainly be viewed as persuasive. See U.S., ex rel. U.S. Attorneys ex rel. Eastern, Western Districts of Kentucky v. Kentucky Bar Association, 439 S.W.3d 136, 147 (Ky. 2014).
We are persuaded by the federal court's well-reasoned analysis and the soundness of its determination that, in Kentucky, conversion claims are governed by KRS 413.125:
While K.R.S. § 413.125 does not specifically state that it applies to claims of conversion, it is clear from its language that it applies to the tort of conversion and should be considered a specific statute-of-limitations rather than a general catchall statute-of-limitations. K.R.S. § 413.125 states that "the taking, detaining, or injuring of personal property" is subject to a two year statute-of-limitations. This language is specific and is intended to apply to claims for conversion.Madison Capital Co., 794 F. Supp. 2d at 741-42. Thus, applying KRS 413.125 to the facts of this case, 3 Bridges should have filed its complaint no later than September 2013 to satisfy the requirements of the statute. As previously noted, the complaint was not filed until June 17, 2014.
Lastly in regard to the issue of limitations, 3 Bridges argues that appellees' failure to affirmatively plead the statute in their answers constituted a waiver of that defense. We do not agree. While CR 8.03 requires a defense grounded in the statute of limitations to be asserted in the initial responsive pleading, there is ample longstanding and often reiterated caselaw concluding that where the limitations defect is shown on the face of the complaint, the statute of limitations may be asserted by motion to dismiss. Tomlinson v. Siehl, 459 S.W.2d 166, 167 (Ky. 1970). That is precisely what occurred in this case. Furthermore, our review of the record discloses that the issue of waiver was never addressed to the trial court either by pleading or at the hearing on the motion to dismiss the complaint as time-barred. Thus, the waiver issue cannot be considered for the first time on appeal: "[t]he proper role for an appellate court is to review for error—and there can be no error when the issue has not been presented to the trial court for decision." Norton Healthcare, Inc. v. Deng, 487 S.W.3d 846, 852 (Ky. 2016).
Similarly, 3 Bridges' apparent contention that that its complaint alleged the breach of an oral contract, not subject to the two-year statute of limitations, was never presented to the trial court. The complaint itself does not allege breach of an oral contract with specificity; nor was it raised thereafter by pleading or argument. And again, this issue falls squarely under the holding in Deng, supra. At the hearing on the motion to dismiss, the trial judge twice asked counsel for 3 Bridges to clarify the nature of its cause of action. Counsel unequivocally stated that it was an action for conversion of property; there was no mention of breach of an oral contract. On this state of the record, we can only conclude that 3 Bridges' failure to afford the trial court an opportunity to rule on its claim of oral contract is fatal to the advancement of any such claim on appeal.
Accordingly, the judgment of the Franklin Circuit Court is affirmed.
ALL CONCUR. BRIEF FOR APPELLANT: Douglas C. Howard
Frankfort, Kentucky BRIEF FOR APPELLEES: James Dean Liebman
Frankfort, Kentucky