Opinion
NO. 2010-CA-000962-MR
07-20-2012
BRIEFS FOR APPELLANT: Kyle A. Burden Louisville, Kentucky BRIEF FOR APPELLEE: H. Jefferson Herbert, Jr. Glasgow, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM BARREN CIRCUIT COURT
HONORABLE THOMAS O. CASTLEN, JUDGE
ACTION NO. 01-CI-00114
OPINION
AFFIRMING
BEFORE: DIXON, KELLER AND NICKELL, JUDGES. NICKELL, JUDGE: James W. Steadman appeals from a Barren Circuit Court judgment following a jury trial. The trial court granted a directed verdict to Floyd Ray Jones and Bernice Shelton, holding that the uncontroverted evidence established that Steadman owed them $200,000 and $73,000, respectively, on two promissory notes. Having reviewed the record and applicable law, we affirm.
In January 2000, V.F. and Frankie Shelton hired an attorney, Willie Neal, and his legal assistant, James Steadman, to assist them in renegotiating a debt. Steadman told the Sheltons that he had convinced the financial institutions to whom they owed the debt to significantly reduce the amount of the obligation if the Sheltons could pay $200,000 immediately, and the balance of the reduced debt shortly thereafter. The Sheltons obtained $200,000 from a relative, Floyd Ray Jones. Ultimately, the Sheltons were able to resolve their debt by obtaining financing through People's Bank, and the sum of $200,000 was to be returned to Jones by Steadman in the form of a People's Bank check. Steadman and V.F. Shelton met with Jones to take delivery of the check. At that meeting, Steadman told Jones that he was involved in a deal for which he needed a $200,000 loan until the following Monday. He said that the deal would allow him to reap the benefit of a $600,000 sale of securities. Steadman said that he could convert Jones's $200,000 check into a certificate of deposit which could serve as security to borrow the money he needed for the securities deal. Jones agreed and endorsed the $200,000 check over to Steadman. Steadman never repaid Jones for the loan.
In a separate incident, Steadman told John Shelton, who is V.F. Shelton's brother, that V.F. could experience substantial savings on his debt obligation if he could pay $100,000 immediately. John Shelton obtained a cashier's check in the amount of $100,000, made payable to "J.W. Steadman, Trust for V.F. Shelton." Steadman used only $27,000 of this money for the benefit of the Sheltons and retained the remaining $73,000.
When John Shelton and Jones demanded repayment from Steadman, he issued a check in the amount of $73,000 to John Shelton and a check in the amount of $200,000 to Jones. Both checks were drawn on the same account, which was in Steadman's name. John Shelton deposited his check immediately, but learned on the next day that it had been returned for insufficient funds. Jones and John Shelton went together to their bank. The bank tried again, unsuccessfully, to have Shelton's check deposited. Jones did not try to negotiate his $200,000 check, reasoning that it would be useless under the circumstances.
After Shelton and Jones were unable to reach Steadman about the checks, they contacted the attorney, Neal, who drafted two promissory notes requiring Steadman to pay $200,000 to Jones and $73,000 to Shelton. Steadman signed both notes as recognition that the debts were owed. Steadman failed to pay the notes. John Shelton and Jones filed suit against him to collect on the notes, and also against Neal under a vicarious liability theory. A warning order attorney was appointed who was unable to locate Steadman. The civil action continued for four years. Because both V.F. Shelton and John Shelton were elderly and in failing health, the plaintiffs noticed the taking of their video depositions in order to preserve their testimony. Notice of the depositions was given to Neal's attorney, but no notice was provided to Steadman because he had not entered an appearance and his whereabouts were unknown.
On April 9, 2005, John Shelton passed away and his widow, Bernice Shelton was substituted as a party plaintiff. Shortly thereafter, V.F. Shelton passed away.
In the summer of 2005, the trial court became aware that Steadman was incarcerated, and on July 13, 2005, appointed a guardian ad litem to represent him. On November 15, 2005, Steadman filed an answer to the original complaint and cross-complaint. On November 25, 2008, his guardian ad litem successfully moved to withdraw and from that time, Steadman acted pro se.
Steadman notified the trial court that he intended to invoke his Fifth Amendment privilege against self-incrimination and requested the trial court to preclude his testimony either at deposition or at trial. On October 8, 2009, the trial court entered an order stating that Steadman would not be required to testify "unless something is brought out at trial that in the interest of justice requires James W. Steadman to testify. In that event the court will address that issue at that time."
During pre-trial discovery, Steadman produced documents that included copies of the promissory notes to John Shelton and Jones. At trial, the plaintiffs sought to introduce the documents into evidence, but Steadman objected on the basis of lack of authenticity. The plaintiffs argued that Steadman could not object on that basis since he himself had provided the documents. The trial court told Steadman that if he continued with the authenticity objection he would allow the plaintiffs to call him as a witness for the limited purpose of testifying regarding whether he had produced the documents to the plaintiffs. Steadman persisted in his objection and was eventually called to the stand where he acknowledged that he had in fact produced the documents, including the promissory notes. The trial court allowed the documents to be introduced into evidence as properly authenticated. At the close of evidence, the trial court granted a directed verdict against Steadman in favor of Jones and John Shelton on the basis that Steadman had never produced any evidence that he had made a single payment on the notes. This appeal followed.
Steadman argues that the trial court erred in (1) granting a directed verdict against Steadman on both checks, when only the check for $73,000 was ever presented for payment to the bank; (2) in allowing into evidence the videotaped depositions of V.F. Shelton and John Shelton, both of whom had died prior to trial, without noticing Steadman in conformity with CR 30.02; and (3) in compelling him to testify.
Kentucky Rules of Civil Procedure.
On a motion for directed verdict, the trial judge must draw all fair and reasonable inferences from the evidence in favor of the party opposing the motion. . . . In reviewing the sufficiency of evidence, the appellate court must respect the opinion of the trial judge who heard theBierman v. Klapheke, 967 S.W.2d 16, 18-19 (Ky. 1998) (internal citations omitted).
evidence. A reviewing court is rarely in as good a position as the trial judge who presided over the initial trial to decide whether a jury can properly consider the evidence presented. Generally, a trial judge cannot enter a directed verdict unless there is a complete absence of proof on a material issue or if no disputed issues of fact exist upon which reasonable minds could differ. Where there is conflicting evidence, it is the responsibility of the jury to determine and resolve such conflicts, as well as matters affecting the credibility of witnesses.
First, Steadman argues that the trial court erred as a matter of law in directing a verdict regarding the $200,000 owed to Jones because Jones failed to conform to the presentment requirement under KRS 355.3-310. The pertinent section of that statute provides as follows:
Kentucky Revised Statutes.
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(2) Unless otherwise agreed and except as provided in subsection (1) of this section, if a note or an uncertified check is taken for an obligation, the obligation is suspended to the same extent the obligation would be discharged if an amount of money equal to the amount of the instrument were taken, and the following rules apply:KRS 355.3-310(2)(a) (emphasis supplied).
(a) In the case of an uncertified check, suspension of the obligation continues until dishonor of the check or until it is paid or certified. Payment or certification of the check results in discharge of the obligation to the extent of the amount of the check.
Steadman argues that because Jones never presented the check for payment at any bank, the obligation was suspended. He argues that any subsequent act, such as the creation of the promissory note, is irrelevant and does not constitute dishonor of the instrument. He does not explain how Jones's failure to present the check for payment affects the enforceability of that note. The trial court granted a directed verdict precisely in regard to the promissory note, not the check. Its judgment stated that the "uncontroverted evidence established the indebtedness of Defendant James W. Steadman to Plaintiff Floyd Ray Jones, in the amount of $200,000.00, together with interest, as set forth in the Promissory Note filed as Exhibit 6[.]" No mention is made of the check. Under these circumstances, the trial court did not err in directing a verdict.
Second, Steadman argues that the trial court erred in allowing into evidence the video depositions of V.F. Shelton and John Shelton, which were recorded in 2005. Both witnesses died before the trial. Steadman objected on the grounds that he was not given notice of the depositions pursuant to CR 30.02 and was not afforded an opportunity to cross-examine either witness.
On September 4, 2009, the trial court entered an order requiring all parties to file written objections to testimony or evidence, including video depositions, designated by the other party prior to the pre-trial conference scheduled for January 19, 2010. The appellees designated the video depositions in their original witness and exhibit list filed on January 19, 2010, and again in their supplemental witness list filed on February 18, 2010. Steadman did not object to the introduction of these videotapes until the middle of trial when the appellants sought to play the depositions for the jury. The trial court found that Steadman had never filed a written objection. It ruled that the objection was untimely and admitted the videos into evidence.
Steadman does not deny that attempts were made to contact him via warning order attorney. Moreover, he was notified well before trial of the existence of the depositions and the plaintiffs' intent to introduce them, but he failed to make any objections at that time. "[A]buse of discretion is the proper standard of review of a trial court's evidentiary rulings." Goodyear Tire and Rubber Co. v. Thompson, 11 S.W.3d 575, 577 (Ky. 2000). "The test for abuse of discretion is whether the trial judge's decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Id. at 581. The correct time to raise an objection would have been upon receipt of the pretrial disclosures, not in the middle of trial. Under these circumstances, the trial court did not abuse its discretion in allowing the depositions to be admitted.
Third and finally, Steadman argues his Fifth Amendment right against self-incrimination was violated when the trial court compelled him to testify regarding the production of certain documents. The documents at issue were provided to the plaintiffs by Steadman in response to a subpoena. After noting that Steadman had filed responsive pleadings in the record indicating the documents existed, the trial court ruled he had waived the privilege against self-incrimination, but only as to the narrow issue of whether the documents were in fact the ones he had produced. The trial court also allowed Steadman to review the documents and remove any that he deemed incriminating insofar as they related to his criminal case.
To invoke the privilege against self-incrimination,
it need only be evident from the implications of the question, in the setting in which it is asked, that a responsive answer to the question or an explanation of why it cannot be answered might be dangerous because injurious disclosure could result. The trial judge in appraising the claim must be governed as much by his personal perception of the peculiarities of the case as by the facts actually in evidence.Young v. Knight, 329 S.W.2d 195, 201-02 (Ky. 1959) (internal citations and quotation marks omitted).
In deciding whether the privilege applies, "[t]he court must consider the totality of the testimony to be given and the context in which it is given, and must afford the contemnor a fair opportunity to present a defense in resolving the factual issue of incrimination." Woods v. Commonwealth, 712 S.W.2d 363, 365 (Ky. App. 1986).
Steadman argues that the fact he testified about one limited topic would have left the jury in a "void of wonderment" as to why he did not testify about the case as a whole, and the burden of introducing and authenticating the documents should have fallen to the party seeking to introduce them under CR 43.01, which states "[t]he party holding the affirmative of an issue must produce the evidence to prove it."
"In adjudicating the right of immunity the court must be able to discern from the character of the question and the other facts adduced in the case some tangible and substantial probability that the answer of the witness might help to convict him of a crime." Young, 329 S.W.2d at 201. Such a probability did not exist in this case, particularly since the trial court was careful to allow Steadman to remove any documents he deemed to be incriminating. Nor do we agree with his contention that the limited nature of his testimony was inherently prejudicial or could have improperly influenced the verdict of the jury. As to his argument regarding the plaintiffs' burden of proof under CR 43.01, Steadman does not dispute the appellees' statement that the promissory notes were introduced and authenticated through the testimony of Floyd Ray Jones.
For the foregoing reasons, the judgment of the Barren Circuit Court is affirmed. ALL CONCUR. BRIEFS FOR APPELLANT: Kyle A. Burden
Louisville, Kentucky
BRIEF FOR APPELLEE: H. Jefferson Herbert, Jr.
Glasgow, Kentucky