Opinion
NO. 2017-CA-002021-MR
03-13-2020
SPEEDWAY SUPERAMERICA, LLC APPELLANT v. TERESA GRUBB AND RANDY GRUBB APPELLEES
BRIEFS FOR APPELLANT: Brian M. Johnson Lexington, Kentucky Matthew A. Stinnett Lexington, Kentucky BRIEF FOR APPELLEES: Yancey L. White Manchester, Kentucky
NOT TO BE PUBLISHED APPEAL FROM CLAY CIRCUIT COURT
HONORABLE OSCAR GAYLE HOUSE, JUDGE
ACTION NO. 08-CI-00033 OPINION
AFFIRMING AND REVERSING AND REMANDING, IN PART
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BEFORE: ACREE, LAMBERT, AND K. THOMPSON, JUDGES. THOMPSON, K., JUDGE: This case arises from a trip and fall sustained by Teresa Grubb at a Speedway SuperAmerica, LLC (Speedway) store in Manchester, Kentucky on February 1, 2007. Its judicial longevity has spanned over a decade, including two prior appeals to this Court and two visits to the Kentucky Supreme Court. The last time it was before the Supreme Court, the Court reversed and remanded to the Clay Circuit Court for further proceedings as detailed in Grubb v. Smith, 523 S.W.3d 409 (Ky. 2017). The circuit court entered findings of fact, conclusions of law, and judgment on remand, and this appeal by Speedway followed.
The primary issues on appeal are whether the trial court erred in apportioning ten percent of fault to Teresa, and in calculating interest from the date of the original judgment in an amount exceeding the current statutory maximum. We conclude that the trial court did not follow the directions given by the Supreme Court in Grubb and that the award of interest should be reduced to six percent on amounts owed under the judgment after the amendment of Kentucky Revised Statutes (KRS) 360.040, effective June 29, 2017.
Kentucky residents, Teresa and her husband Randy Grubb, filed an action in the Clay Circuit Court against Speedway and Roxanne Smith, the manager of the Speedway store where Teresa fell, alleging that they failed to maintain the premises in a reasonably safe condition for Teresa's use as an invitee causing her to fall and sustain injury. While the procedural history of this case is complicated, the underlying facts are straightforward.
At approximately 8:30 p.m. on February 1, 2007, Teresa and an acquaintance, Robbie Gregory, visited the Speedway store to purchase gasoline. Teresa exited the vehicle from the passenger's side and followed a path into the store taking her away from the area where she would later fall. After the couple paid for gas and Teresa purchased a cappuccino, the two exited the store and engaged in conversation. As Teresa approached the vehicle, she fell after catching her foot in an eroded path of asphalt between the station's two parallel gas-pump islands and next to a drain. Teresa suffered a fracture in her left ankle, a knee injury, and burns to her face and shoulder caused by spilling hot cappuccino. Teresa and Gregory testified that neither noticed the eroded area prior to Teresa's fall and, when she fell, they were engaged in conversation. Teresa was not looking at the ground when she fell.
Smith testified that since 2006, she managed the Speedway store and inspected and swept the parking lot daily. As manager, she made routine maintenance requests to Speedway. If a request was submitted, Speedway coordinated the repair process and sent regional maintenance personnel to the local store to either correct the problem or contract with a third-party to make the necessary repair. Because she did not believe the eroded area was a hazard, Smith did not request that it be repaired. She further testified that local employees were not trained to repair the parking lot. Although Smith had a budget of under $100 to buy necessities such as light bulbs, she had no authority to spend any amount to perform repairs requiring an expert's skills.
Carolyn King and Lauren Sizemore, Speedway cashiers, testified and confirmed Smith's testimony. Additionally, King testified that although she swept the parking lot daily and poured water down the drain located near the eroded area, prior to Teresa's fall she did not observe anything that she believed posed a danger to customers. There was testimony that the area where the fall occurred was well lit in the evenings. Photographs of the area where Teresa fell show there was an irregularly shaped path of asphalt, about a foot square that had weathered and eroded.
We do not prolong this opinion by reiterating the evidence relative to damages. As the Supreme Court stated, its opinion did not disturb the trial court's findings of fact, including any findings of fact regarding the amount of damages. Grubb, 523 S.W.3d at 430.
At the close of the Grubbs' proof, Speedway and Smith moved for directed verdict arguing that Smith did not owe a duty to Teresa, and that the eroded area was an open and obvious condition. The trial court denied the motions and a judgment was entered on August 9, 2010. The Clay Circuit Court found that the "hole" posed an unreasonable risk of harm to business invitees, including Teresa. A judgment was entered against Speedway and Smith, individually, awarding the Grubbs $200,000 in damages, including $175,000 for Teresa's pain and suffering. Speedway and Smith appealed.
On appeal, this Court concluded that the Grubbs' claims were precluded by the common law's open and obvious doctrine and reversed and remanded for entry of a defense judgment. The Supreme Court granted the Grubbs' motion for discretionary review.
The Supreme Court remanded to this Court for reconsideration in light of the then-recent Supreme Court decisions in Kentucky River Med. Ctr. v. McIntosh, 319 S.W.3d 385 (Ky. 2010), Dick's Sporting Goods, Inc., v. Webb, 413 S.W.3d 891 (Ky. 2013) and Shelton v. Kentucky Easter Seals Soc'y Inc., 413 S.W.3d 901 (Ky. 2013). On remand, this Court found its prior ruling was consistent with those recent cases and again held that the Grubbs' claims could not succeed.
The Supreme Court granted the Grubbs' second motion for discretionary review and reversed this Court's decision. The Supreme Court held that this Court erred by applying the open and obvious doctrine as a bar to the Grubbs' claims. Instead, the Court held that the question was properly resolved as a factual matter and the application of comparative fault. Grubb, 523 S.W.3d at 421. The Court further held that Smith did not have sufficient control of the premises to be liable to the Grubbs. Id. at 427.
The Court engaged in an extensive analysis of the open and obvious doctrine and its recent decisions addressing the doctrine. It also provided in-depth discussion of the circumstances under which a store manager could be liable to a business invitee for failure to perform employment duties causing injury to that invitee. Because this appeal concerns whether the trial court properly followed the Court's directions on remand, that analysis is mostly insignificant. --------
While the Supreme Court held that the open and obvious doctrine did not preclude the Grubbs from recovering damages, it nevertheless concluded that remand to the trial court was required for it to consider Teresa's comparative fault. It noted that there was "no serious dispute that the 'hole' here was 'obvious[.]'" Id. at 419. It was also noted that the "hole" was in a well-lit area. Id at 418. The Court went on to explain that the obviousness of a danger will, in most instances, reduce the liability of the premises owner under the comparative fault approach. In this case, the Court unequivocally concluded there must be a such a reduction. It stated:
As Defendants correctly note, in McIntosh we were emphatic in pointing out that while the obviousness of the condition that occasioned the plaintiff's injury did not, under the comparative-fault approach, preclude the plaintiff's claim, "only under extremely rare circumstances" under that approach "could a plaintiff [injured by an obvious condition] avoid some share of fault." McIntosh, 319 S.W.3d at 392. This case does not present "extremely rare circumstances." Quite the contrary, as Teresa herself testified, it presents the utterly mundane circumstance of a person who, engaged in conversation with a friend, fails to watch where she is going and trips on an obvious flaw in the pavement.
Some portion of the responsibility for her injuries should have been attributed to Teresa, but the trial court did not even address the question. We agree with Defendants that the trial court's lapse was a "substantial error" requiring us to vacate the Judgment and to remand to that court for the findings mandated by KRS 411.182(1). And while it is for the trial court to determine in the first instance the percentages of fault, as
provided for in KRS 411.182(2), we reiterate that in light of Teresa's admitted carelessness, the percentage attributed to her should not be insignificant.Id. at 429-30 (emphases added). The Court continued noting that since its adoption of the comparative fault approach to open and obvious hazards, it has labored to assure that premises owners are not liable for a business invitee's own negligence. Id. at 430. The Court found it particularly troublesome that the trial court did not apportion fault to Teresa because "the effect of the trial court's error is precisely to saddle Speedway with the entirety of a large damages award, when much of the fault giving rise to those damages was clearly the plaintiff's own." Id. (emphasis added).
On remand, the trial court apportioned ninety percent of fault to Speedway and ten percent to Teresa. After citing the apportionment statute, KRS 411.182, the trial court made findings of fact contained in one paragraph stating as follows:
In its findings of fact, this Court found that the condition of the hole posed an unreasonable risk of harm to the business invitees, including Teresa Grubb. In reaching this decision, the Court, in fact, followed the principle set out in the Supreme Court's decision that "the reasonableness of a risk involves some manner of balancing the costs or burdens of mitigating it against the likelihood and severity of the injuries it threatens." [Grubb, 523 S.W.3d at 417]. Particularly significant to this Court's finding was the fact that the hole "had been created by an erosion process over a period of months and months, if not years." (Original judgment p. 3) The
plaintiff had entered the store through an entrance door that was away from the hole. She left the store through the exit door, and the hole was in the general area of the most direct path back to the Grubb vehicle between the gas pumps. As the Supreme Court stated, "Teresa caught her foot in an eroded patch of asphalt in the middle of the driveway between the station's two parallel gas-pump islands and fell." [Id. at 412.] Considering all of the evidence herein, this Court as the fact finder apportions 90% of fault to the defendant Speedway Superamerica, LLC, and 10% of fault to the claimant Teresa Grubb.Nothing in the trial court's judgment mentioned any facts regarding Teresa's fault in the accident or the obviousness of the eroded area. The trial court awarded interest at a rate of twelve percent computed annually from August 9, 2010, the date of the original judgment. The judgment on remand did not state that Smith was dismissed from the action, although it also did not impose any individual liability on Smith. This appeal followed.
Speedway argues that on remand, the trial court failed to comply with the Supreme Court's directions. First, Speedway argues that because the Supreme Court unquestionably held Smith did not have any individual liability for Teresa's injuries, the trial court was required to formally dismiss her from the action. The Grubbs have no objection to the entry of an order dismissing Smith from the action but take the position that such an order is unnecessary because the trial court did not impose any liability on Smith in compliance with the Supreme Court's opinion.
We agree that Smith should be formally dismissed by the trial court so that she is no longer a party to this action and her participation in this protracted litigation is at an end. On remand, the trial court is directed to enter an order dismissing Smith as a defendant in this matter.
The second and more debatable question is whether the trial court complied with the Supreme Court's directions when it apportioned only ten percent of fault to Teresa. As is often the situation, our answer to that question is dependent on our standard of review. KRS 411.182 provides as follows:
(1) In all tort actions, including products liability actions, involving fault of more than one (1) party to the action, including third-party defendants and persons who have been released under subsection (4) of this section, the court, unless otherwise agreed by all parties, shall instruct the jury to answer interrogatories or, if there is no jury, shall make findings indicating:
(a) The amount of damages each claimant would be entitled to recover if contributory fault is disregarded; and
(b) The percentage of the total fault of all the parties to each claim that is allocated to each claimant, defendant, third-party defendant, and person who has been released from liability under subsection (4) of this section.
(2) In determining the percentages of fault, the trier of fact shall consider both the nature of the conduct of each party at fault and the extent of the causal relation between the conduct and the damages claimed.
In this case, the trial court was the fact-finder because a bench trial was held. Kentucky Rules of Civil Procedure (CR) 52.01 provides that "[f]indings of fact, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." "If the trial judge's findings of fact in the underlying action are not clearly erroneous, i.e., are supported by substantial evidence, then the appellate court's role is confined to determining whether those facts support the trial judge's legal conclusion." Commonwealth v. Deloney, 20 S.W.3d 471, 473-74 (Ky. 2000). However, the trial court on remand was not making its determination in a vacuum.
In Grubb, the Supreme Court made specific pronouncements and gave specific directions to the trial court. Whether right or wrong, the majority opinion in Grubb is the law of the case. "The law-of-the-case doctrine describes a principle which requires obedience to appellate court decisions in all subsequent stages of the litigation. Thus, on remand, a trial court must strictly follow the mandate given by an appellate court in that case." Buckley v. Wilson, 177 S.W.3d 778, 781 (Ky. 2005) (footnotes omitted). Whether the trial court complied with the Supreme Court's directions is a question of law that we review de novo. Ragland v. DiGiuro, 352 S.W.3d 908, 912 (Ky.App. 2010).
We agree with Speedway that ten percent is far from a significant amount of fault and is not much fault at all. As the term is commonly understood, "significant amount" means a noticeably or measurably large amount. Likewise, "much fault" is commonly understood to mean a large amount of fault. We conclude that apportioning only ten percent of the fault to Teresa falls way short of implementing the Supreme Court's directions. It does not reflect the Supreme Court's conclusion that "much" of the fault in causing her accident was attributable to Teresa or that her fault was "not insignificant." Although certainly this case needs to come to end, we are compelled to reverse and remand with directions that the trial court apportion damages in accordance with the Supreme Court's opinion in Grubb.
The remaining issues are pure questions of law and both issues concern the trial court's award of post-judgment interest after remand. Consequently, our standard of review is de novo. Speedway argues that the trial court erred when it awarded interest from the date of its original judgment entered on August 9, 2010, instead of the date of its judgment after remand. We disagree.
In Commonwealth, Justice and Public Safety Cabinet, Dep't of Kentucky State Police v. Gaither, 539 S.W.3d 667 (Ky. 2018), the Supreme Court addressed whether interest is to be computed on the original judgment or the judgment entered after the appellate process. The Court held interest on a judgment that is completely reversed by an appellate court does not accrue interest because the original judgment no longer disposes of all claims of the parties. Id. at 673. Post-judgment interest on a straightforward affirmance of a judgment accrues from the date of its entry because the judgment remains in effect. Id. The Court recognized that a third type of case exists where there is not a straightforward reversal or a straightforward affirmance. Id. at 673-74. This case falls within that third category.
In Grubb, the Supreme Court concluded its opinion by stating: "In sum, the Court of Appeals' opinion holding that the Grubbs' claims are barred by the open and obvious doctrine is reversed, and the trial court's findings of fact are reinstated, including any findings of fact regarding the amount of damages." Grubb, 523 S.W.3d at 430. While the Court did state that the trial court's failure to apportion fault required it to "vacate" the judgment, id., the word "vacate" appears nowhere else in the opinion, including its conclusion. In effect, the Supreme Court affirmed the decision of the trial court in all respects except it held that Smith could not be individually liable and the trial court's failure to apportion significant fault to Teresa was error. Because the Supreme Court held that Speedway was vicariously liable for Smith's acts, the only action required on remand was apportionment.
In Gaither, the Court cited Brooks v .United States, 757 F.2d 734 (5th Cir. 1985). Gaither, 539 S.W.3d at 674-75. Brooks was a Federal Tort Claims Act action that arose out of an airplane crash. At trial, negligence was apportioned seventy-five percent to the Government and twenty-five percent to the plaintiffs. On appeal, the Fifth Circuit reversed one finding of negligence against the Government and remanded to the district court to reapportion the comparative fault. The district court apportioned sixty percent of the fault to the Government and forty percent to the plaintiffs.
The Government argued that no interest should be awarded during the pendency of appeal because the appellate court effectively vacated the original judgment. The Fifth Circuit disagreed stating:
In the instant case, the original judgment was substantially affirmed by this Court on appeal. The district court on remand, acting consistently with this Court's prior opinion, reduced the Government's comparative fault by fifteen percent and again entered judgment for the plaintiffs. Under such circumstances, even where the case is nominally reversed in part and remanded, the case is to be treated for interest purposes as though the portions of the judgment unaffected by the reversal and remand were affirmed.Brooks, 757 F.2d at 740 (citations omitted). See also Tinsley v. Sea-Land Corp., 979 F.2d 1382 (9th Cir. 1992) (post-judgment interest calculated from the date of the original judgment where case remanded solely to apportion damages). These cases reflect the law as expressed in Gaither that "[i]nterest properly accrues from the date of the initial judgment . . . because that is the date on which the correct judgment should have been entered." Gaither, 539 S.W.3d at 675 (quoting Brooks, 757 F.2d at 741). We conclude the trial court did not err when it awarded interest from the date of its original judgment.
Finally, Speedway argues that the trial court erred when it compounded interest annually from the date of the original judgment at a rate of twelve percent per annum. To the extent the judgment on remand awards judgment at the rate of twelve percent after the effective date of the amendment to the post-judgment interest statute, KRS 360.040, we agree.
For the first time since 1982, the General Assembly amended KRS 360.040 and lowered the general post-judgment interest rate from twelve to six percent as of June 29, 2017. Speedway argues that the six-percent interest rate should be applied to amounts owed under the original judgment prior to the effective date of the amendment.
Absent express statutory language, "[n]o statute shall be construed to be retroactive[.]" KRS 446.080(3). There is no statutory language making KRS 360.040 retroactive so that interest accrued prior to June 29, 2017, would accrue at a rate of twelve percent. However, the Grubbs concede that interest on the judgment after June 29, 2017, should accrue at the new six-percent interest rate. The Grubbs candidly admit that Ridge v. Ridge, 572 S.W.2d 859, 860-61 (Ky. 1978) (citations omitted) states the controlling law:
The only issue remaining is the effect of the statutory increase of the interest rate on the judgment.
KRS 360.040 was amended, effective June 19, 1976, to increase the legal rate from 6% To 8%. The increase took effect more than a year after the judgment was entered here. Movant argues that as a result of the amendment the judgment should bear interest at the higher rate.Upon remand and entry of a new judgment in accordance with this opinion, accrued interest compounded annually from August 9, 2010, to June 29, 2017, shall be at a rate of twelve percent per annum. From June 29, 2017, until collected, the judgment shall bear interest at the rate of six percent compounded annually.
There is a division of authority as to whether interest on an outstanding judgment is affected by a subsequent change in the legal rate. One line of cases regards judgments as contractual, while other jurisdictions hold that interest on judgments is a matter of statutory grace. Courts adhering to the contract theory hold that interest becomes fixed at the legal rate in existence on the date a judgment is rendered. On the other hand, those courts that regard interest as a purely statutory creation hold that the rate is subject to later change by law, the change to take effect from the date of the statute.
This is a question of first impression in Kentucky, and we are persuaded to adopt the position that the rate of interest on judgments is a statutory rather than a contractual matter. We therefore hold that the increase of the legal interest rate applies prospectively to prior unsatisfied judgments, the new rate beginning with the effective date of the amendment. The movant thus became entitled to interest at 8% Upon amendment of KRS 360.040.
For the reasons stated, the findings of fact, conclusions of law, and judgment of the Clay Circuit Court is affirmed to the extent it awards post-judgment interest from the date of the original judgment. It is reversed and remanded for proceedings consistent with this opinion in regard to the apportionment of fault to Teresa and the amount of interest.
ALL CONCUR. BRIEFS FOR APPELLANT: Brian M. Johnson
Lexington, Kentucky Matthew A. Stinnett
Lexington, Kentucky BRIEF FOR APPELLEES: Yancey L. White
Manchester, Kentucky