Watts By and Through Watts v. K, S & H

Citation957 S.W.2d 233
Decision Date02 October 1997
Docket NumberNos. 95-SC-189-D,95-SC-837-DG,s. 95-SC-189-D
PartiesChad WATTS, As Infant By and Through his Mother and Legal Guardian, Elizabeth WATTS, Appellant, v. K, S & H, A Partnership; Gary Stingle, Individually and Partner in K, S & H; William David Hammons, Individually and Partner in K, S & H; and Hugh King, III, Individually and Partner in K, S & H, Appellees. Hugh KING, Appellant, v. Chad WATTS, As Infant By and Through his Mother and Legal Guardian, Elizabeth WATTS, Appellee.
CourtUnited States State Supreme Court (Kentucky)

Thomas K. Herren, Herren & Adams, Lexington, Donald P. Moloney, II, Sturgill, Turner & Truitt, Lexington, for Watts.

Larry Wayne Cleveland, Young, Cleveland & Ayer, Catherine C. Staib, Frankfort, for K, S & H, Gary Stingle and William David Hammons.

Robert S. Miller, Harry B. Miller, Jr., Miller, Griffin & Marks, P.S.C., Lexington, for Hugh King, III.

STUMBO, Justice.

Appellant, Chad Watts (hereinafter "Chad"), received severe and permanent injuries in a head-on collision which claimed the life of his father, Dan Watts. Todd Neal (hereinafter "Neal"), the teenage driver of the car which caused the accident, was also severely injured, and his teenage passenger was killed. Suit was filed against, and a settlement reached with, the Neal family. Chad, through his next friend and guardian, Elizabeth Watts, then brought this action against Appellees, a partnership and the individuals who owned the Newtown Spirits Shoppe. A jury trial was held and an award in excess of six million dollars was returned, apportioned 70% to Neal and 30% to the Appellees.

On appeal, the Court of Appeals reversed and directed dismissal of the action, holding that Chad had improperly split his cause of action by filing separate suits against Neal and the Appellees herein. We granted discretionary review to consider that issue as well as a myriad of other questions raised in the lower court and asserted in the Court of Appeals, but not addressed there.

THE FACTS:

Given the complexity of the issues presented, a detailed recitation of the facts is necessary. On November 16, 1984, Neal, Jeff McMillan (hereinafter "McMillan"), Doug Charles (hereinafter "Charles"), and Harold Brandenburg (hereinafter "Brandenburg"), all sixteen-year-old students at Scott County High School, skipped school to spend the day in Lexington. Brandenburg was driving his automobile, with the others as passengers. At some point, either near nine or ten a.m., depending on whose testimony you believe, they stopped at the Newtown Spirits Shoppe, where Charles went inside and purchased a case of beer and a pint of rum. At trial The alcohol was consumed by Charles, McMillan and Neal. Only Charles and Brandenburg testified at trial. McMillan died in the crash and Neal was severely injured and was not called as a witness.

Charles testified that he did not use false identification to make the purchase and that he was not asked for proper identification. Whether the clerk at the shop could see Brandenburg's car and the other teenagers inside it is also disputed.

The boys spent the rest of the day visiting with friends and playing pool. Exactly how much alcohol each boy consumed is unclear. The four returned to school at dismissal time and Neal and McMillan left in Neal's car. While passing on a double-yellow line, Neal swerved to avoid a head-on collision with a concrete truck, lost control of his car, and struck the Watts vehicle head-on. Other witnesses testified that Neal had been driving recklessly immediately prior to the accident and there was an eyewitness to the collision who testified as well. As previously stated, Chad was catastrophically injured and his father was killed.

At trial, Appellees attempted to show that the severity of Chad's injuries was attributable, in part, to the failure of his father to secure him in a child restraint or seat belt. Because Appellees did not join Dan Watts' estate as a party, Appellees were limited in their attempt to place fault on Dan and the trial court refused to include Dan's negligence in the apportionment instruction. (Appellant contends, and the record supports this contention, that the trial judge refused to allow the instruction because there was insufficient evidence to support the giving of an apportionment instruction on that ground.)

Other evidentiary matters contested on appeal are the admissibility of blood and urine test results obtained by the investigating officer and whether Elizabeth Watts committed fraud upon the court by failing to disclose to the court and jury that she had remarried.

I. DID APPELLANT IMPROPERLY SPLIT HIS CAUSE OF ACTION?

As stated before, Appellant first filed suit against the driver of the automobile at fault in the collision, the owner of the car, and an associated business. A settlement was reached in that action, resolving claims brought by Dan Watts' estate, by Elizabeth Watts for her loss of consortium, and by Elizabeth on Chad's behalf.

This action was then filed solely on Chad's behalf by Elizabeth as next friend and guardian. Following entry of the judgment, this appeal was brought by Appellees. Before the Court of Appeals, Appellees presented a number of arguments, including that the trial court erred in failing to allow an instruction that would permit apportionment of fault to Chad's father for failing to secure Chad in a seat belt, that laches should be applied to prevent the bringing of this action because of the delay in filing suit against Appellees, and that the trial court impermissibly extended the dram shop rule by allowing the imposition of liability when the sale of the liquor was not made directly to the tortfeasor.

The Court of Appeals used a combination of the laches argument and the dram shop argument to arrive at the resolution that:

This appears to be a case in which the plaintiff has been allowed to split her cause of action and try it piecemeal, contrary to the subsidiary res judicata rule making that theory applicable not only to the issues disposed of in the first action, but to every point which properly belonged to the subject of that action. Egbert v. Curtis, Ky.App., 695 S.W.2d 123 (1985), citing Hays v. Sturgill, 302 Ky. 31, 193 S.W.2d 648 (1946). The rule against splitting causes of action is an equitable one which limits all causes of action arising out of a single "transaction" to a single suit rather than proceeding piecemeal in multiple actions. Capital Holding Corp. v. Bailey, Ky., 873 S.W.2d 187 (1994). Here the equities do slant in favor of the partnership. It is interesting that the liquor store was not mentioned at all in the 1985 action against the drunk driver and that this suit was commenced about six months after the release of Grayson Fraternal Order of Eagles v. Claywell, Ky., 736 S.W.2d 328 It is our opinion that the Court of Appeals has erred in two ways in reaching that particular result: it has based its ruling on an issue that was not raised on appeal, and, in doing so, has misconstrued the rule against the splitting of actions. When the rule against splitting causes of action is examined, it becomes clear that the rule is a subsidiary of the doctrine of res judicata, a defense which must be affirmatively pled. Egbert, supra, at 124; CR 8.03.

(1987), but about four months before the effective date of KRS 413.241. That statute was specifically limited to actions filed after July 15, 1988; Grayson was not specifically stated to be either retroactive or prospective. This is not to say that this cause of action against the owners of the liquor store, if valid under the principles set forth in Grayson, did not accrue prior to the rendering of that case: that represents a shift in common law which could have been asserted by Watts against K, S & H in the 1985 action as it was asserted at about that time by Claywell against the Grayson Fraternal Order of Eagles. Not only could it have been asserted at that time but it should have been asserted at that time and Watts' failure to do so constitutes an impermissible splitting of a cause of action which we cannot allow.

A thorough search of the record reveals that the defense was not specifically pled, but was asserted via a motion for summary judgment. The motion was denied by the trial court. Following the trial, Appellees' appeal raised a wide range of issues, but the closest the brief came to this particular claim of error was to argue that laches should have been used as a bar to this suit, an argument in equity rather than procedure. As previously stated, the court used the laches argument as a springboard to the grounds for reversal. Rather than basing our ruling on this procedural ground, however, we will address the correctness of the substantive ruling.

The cases cited by all parties to this action are Egbert, supra; Hays, supra; and Capital Holding, supra. We also have reviewed Kirchner v. Riherd, Ky., 702 S.W.2d 33 (1985), wherein this Court set forth the basis for the rule against splitting causes of action and the legal reasoning therefore, saying:

The theory for the prohibition against splitting a cause of action is barred largely on the ground that fairness to the defendant and sound judicial administration require that at some point litigation over a particular controversy be brought to a final conclusion.

Kirchner, supra, at 35.

The operative and important words in Kirchner and Egbert are "the defendant," which refer to the defendant in the first action, against whom all claims must be raised at the time that action is brought. Kirchner concerned claims arising from an automobile accident which were brought successively in the small claims and circuit courts. Id. at 33. Egbert involved the same scenario, with the exception that the claim not brought should have been asserted as a compulsory counterclaim against the plaintiff in small claims court rather than being brought as a third-party claim in the...

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