Hilburn v. Enerpipe Ltd.

• Decision Date: 14 June 2019
• Docket Number: No. 112,765,112,765
• Citation: 442 P.3d 509
• Parties: Diana K. HILBURN, Appellant, v. ENERPIPE LTD., Appellee.
• Court: Kansas Supreme Court

442 P.3d 509

Diana K. HILBURN, Appellant,

v.ENERPIPE LTD., Appellee.

No. 112,765

Supreme Court of Kansas.

Opinion filed June 14, 2019.

Thomas M. Warner, Jr., of Warner Law Offices, P.A., of Wichita, argued the cause and was on the briefs for appellant.

Andrew D. Holder, of Fisher, Patterson, Sayler & Smith, L.L.P., of Topeka, argued the cause, and Justice B. King, of the same firm, and Kelly A. Ricke, of the same firm, of Overland Park, were with him on the briefs for appellee.

Toby Crouse, solicitor general, argued the cause, and Jeffrey A. Chanay, chief deputy attorney general, Dwight R. Carswell, assistant solicitor general, Bryan C. Clark, assistant solicitor general, and Derek Schmidt, attorney general, were on the brief for intervenor Kansas Attorney General Derek Schmidt.

Timothy J. Finnerty and Bryan R. Kelly, of Wallace, Saunders, Austin, Brown & Enochs, Chartered, of Wichita, were on the brief for amicus curiae Kansas Association of Defense Counsel.

James D. Oliver and Scott C. Nehrbass, of Foulston Siefkin LLP, of Overland Park, and Clayton Kaiser, of the same firm, of Wichita, were on the brief for amicus curiae Kansas Chamber of Commerce and Industry, Inc.

David R. Morantz, of Shamberg, Johnson & Bergman, Chtd., of Kansas City, Missouri, and James R. Howell, of Prochaska, Howell & Prochaska, of Wichita, were on the brief for amicus curiae Kansas Trial Lawyers Association.

The decision of the court was delivered by Beier, J.:

This case requires us once again to examine the constitutionality of K.S.A. 60-19a02, which caps jury awards for noneconomic damages in personal injury actions. Plaintiff Diana K. Hilburn argues that the application of K.S.A. 60-19a02 to reduce her jury award of $ 335,000 to a judgment of $ 283,490.86 violated her rights under section 5 and section 18 of the Kansas Constitution Bill of Rights.

In Miller v. Johnson , 295 Kan. 636, 289 P.3d 1098 (2012), a majority of this court upheld the application of the noneconomic damages cap to a medical malpractice plaintiff's jury award in the face of challenges under section 5 and section 18. The Miller majority extended what it described as a "well-entrenched" section 18 quid pro quo analysis to section 5 challenges. Under that test, the Legislature must provide an "adequate and viable substitute when modifying a common-law jury trial right under Section 5 or right to remedy under Section 18." 295 Kan. at 654, 289 P.3d 1098.

Today, in this auto-truck accident case, we change course on section 5, declining to apply the quid pro quo test to analyze Hilburn's challenge. Section 5 declares, "The right of trial by jury shall be inviolate." As discussed below in detail, the noneconomic damages cap under K.S.A. 60-19a02 violates Hilburn's right protected by section 5 because it intrudes upon the jury's determination of the compensation owed her to redress her injury. We therefore reverse the Court of Appeals decision affirming the district court, reverse the district court's judgment, and remand this case to district court for entry of judgment in Hilburn's favor on the jury's full award. This decision eliminates any necessity of addressing Hilburn's section 18 claim.

FACTUAL AND PROCEDURAL BACKGROUND

Hilburn was injured in November 2010 when the car in which she was riding was rear-ended by a semi-truck. Hilburn sued the truck's owner, Enerpipe Ltd., alleging that the truck driver's negligence caused the collision and that Enerpipe was vicariously liable for its driver's actions.

In its answer to Hilburn's Petition, Enerpipe admitted the driver's negligence and conceded its vicarious liability.

The case proceeded to a trial on damages, after which a jury awarded Hilburn $ 335,000 in damages comprising $ 33,490.86 for medical expenses and $ 301,509.14 for noneconomic losses.

Defense counsel prepared a journal entry of judgment against Enerpipe for $ 283,490.86 because, "pursuant to K.S.A. 60-19a02(d), judgment must be entered in the amount of $ 250,000 for all of Diana K. Hilburn's noneconomic loss." Hilburn objected on the ground that K.S.A. 60-19a02 is unconstitutional. She alleged violations of sections 1, 5, and 18 of the Kansas Constitution Bill of Rights, as well as the jury trial and due process guarantees of the United States Constitution.

The district court judge acknowledged that Hilburn's case was distinguishable from Miller , which was a medical malpractice case, but he ultimately decided the constitutional issues in defendant's favor. The judge accepted Enerpipe's argument that there was an adequate substitute remedy for Hilburn's loss of any section 5 or section 18 rights, just as mandatory medical malpractice insurance had constituted an adequate substitute remedy in Miller . He relied on federal law mandating that a motor carrier operating in interstate commerce must maintain a minimum level of liability insurance, see 49 U.S.C. § 13906(a)(1) (2012) ; on Kansas law and regulation adopting the federal minimum liability requirements, see K.S.A. 2010 Supp. 66-1,108b ; K.A.R. 82-4-3n (2014 Supp.) ; and on Kansas' no-fault auto insurance regime under the Kansas Automobile Injury Reparations Act, K.S.A. 40-3101 et seq. (KAIRA); see also K.S.A. 40-3107(e) - (f) (requiring all policies contain minimum levels of personal injury protection benefits). The district judge entered a $ 283,490.86 judgment for Hilburn.

Hilburn appealed to the Court of Appeals. In her brief, Hilburn asserted a facial challenge to the damages cap under section 5, asserting that the quid pro quo test should not be applied to analyze that claim. In addition, she argued that the cap violated section 18 because the Legislature had not provided a suitable or sufficient substitute remedy. According to Hilburn, the two necessary prongs of the quid pro quo test were unmet: The noneconomic damages limitation was not reasonably necessary in the public interest, "as applied" to her; and the Legislature failed to provide an adequate substitute remedy for impairment of her constitutional rights.

The Court of Appeals panel rejected Hilburn's arguments and affirmed. See Hilburn v. Enerpipe, Ltd. , 52 Kan. App. 2d 546, 560, 370 P.3d 428 (2016). Believing itself bound by the precedent of Miller , the panel summarily declined Hilburn's invitation to reexamine the threshold legal issue of whether the quid pro quo test should apply to section 5. 52 Kan. App. 2d at 554, 370 P.3d 428.

The panel then turned to the first prong of the quid pro quo test for both section 5 and section 18 and determined that it had been satisfied. Modification of the right to jury trial under section 5 and the common-law right to remedy under section 18 was " ‘reasonably necessary in the public interest to promote the public welfare,’ " because "the damages cap operates in a broader scheme of mandatory insurance and the State maintains an interest in that insurance remaining available and affordable to compensate accident victims." 52 Kan. App. 2d at 554, 556, 370 P.3d 428 (quoting Miller , 295 Kan. at 657, 289 P.3d 1098 ).

The panel also concluded that the " ‘more stringent’ " second prong of the quid pro quo test, that is, adequacy, had been satisfied because mandatory insurance for motor carriers guaranteed "a reliable source of recovery" for victims in accidents involving trucks. Hilburn , 52 Kan. App. 2d at 556, 558, 370 P.3d 428. The panel relied on federal and state mandatory motor vehicle insurance laws and KAIRA.

Hilburn petitioned this court for review, which was granted.

The Kansas Attorney General intervened after initial oral argument in this case, pursuant to K.S.A. 2018 Supp. 75-764. The Attorney General, like Enerpipe, argued that the quid pro quo test had been satisfied for both section 5 and section 18. But, like Hilburn, he questioned the applicability of the test to section 5, arguing that "legislative restrictions on remedies do not violate the right to trial by jury." The Attorney General also asked this court to reconsider whether a statute alleged to violate section 18 must satisfy the quid pro quo test.

DISCUSSION

Preservation

As a preliminary matter, we take up whether Hilburn preserved her challenge to the applicability of the quid pro quo test for section 5 analysis.

The version of Kansas Supreme Court Rule 8.03(a)(4)(C) in effect at the time Hilburn filed her petition for review required that such a petition contain a "statement of the issues decided by the Court of Appeals of which review is sought" and said that this court would "not consider issues not presented or fairly included in the petition." Supreme Court Rule 8.03(a)(4)(C) (2015 Kan. Ct. R. Annot. 79). Hilburn's petition focused exclusively on whether the Court of Appeals correctly held that the quid pro quo test was satisfied; it did not separately list as an issue or subissue whether the quid pro quo test applied in analyzing a section 5 claim. However, the same rule subsection that purported to limit the number and identity of issues that could be decided on petition for review also explicitly allowed us to "address a plain error not presented." Supreme Court Rule 8.03(a)(4)(C) (2015 Kan. Ct. R. Annot. 79). And, in civil cases such as this, a different subsection of Supreme Court Rule 8.03 permitted but did not require us to consider "other issues that were presented to the Court of Appeals and that the parties have preserved for review." Supreme Court Rule 8.03(h)(1) (2015 Kan. Ct. R. Annot. 81).

Hilburn argued in the district court that her section 5 jury trial right was violated by the noneconomic damages cap, preserving the necessary subissue on the proper legal test to determine the existence of a violation. Her brief to the Court of Appeals challenged whether the quid pro quo test should apply in analysis of her section 5 claim. Indeed, the Court of Appeals panel decided the issue in Enerpipe's favor. See Hilburn , 52 Kan. App. 2d at 554, 370 P.3d 428. Once Hilburn's petition for review was granted, she argued in her...