Williams v. Wilson, 96-SC-1122-DG

CourtUnited States State Supreme Court (Kentucky)
Citation972 S.W.2d 260
Docket NumberNo. 96-SC-1122-DG,96-SC-1122-DG
PartiesTeri C. WILLIAMS, Appellant, v. Patricia Lynn Herald WILSON, Appellee.
Decision Date16 April 1998

Page 260

972 S.W.2d 260
Teri C. WILLIAMS, Appellant,
v.
Patricia Lynn Herald WILSON, Appellee.
No. 96-SC-1122-DG.
Supreme Court of Kentucky.
April 16, 1998.
Rehearing Denied Aug. 27, 1998.

Benjamin J. Hays, Elizabeth M. Linville, Mark A. Matics, Hays & Hays, Winchester, Kevin J. Hable, Virginia H. Snell, Jean W. Bird, Wyatt, Tarrant & Combs, Louisville, for Appellant.

Kendall Robinson, Booneville, Joe C. Savage, Savage, Garmer & Elliott PSC, Lexington, for Appellee.

Hugh F. Young, Jr., Reston, VA, Victor E. Schwartz, Mark A. Behrens, Crowell & Moring LLP, Washington, DC, William D. Grubbs, Woodward, Hobson & Fulton LLP, Louisville, for Amicus Curiae, Product Liability Council, Inc.

James R. Cox, John S. Reed, II, Reed Weitkamp Schell Cox & Vice, Louisville, for Amicus Curiae, Kentucky Chamber of Commerce, Associated Industries of Kentucky, Kentucky Bankers Association, and Kentucky Coal Association.

LAMBERT, Justice.

This Court granted discretionary review (CR 76.20) to consider whether KRS 411.184 violates one or more provisions of the Constitution of Kentucky, thereby rendering the statute invalid and unenforceable. To resolve this question of constitutional law, it is necessary to first determine whether, in material respects, the statute impairs the common law of this Commonwealth as it existed

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prior to adoption of our present Constitution, thereby implicating the doctrine of jural rights. In the event we determine that the statute does change well settled common law with respect to recovery of punitive damages, we will proceed to re-examine the doctrine of jural rights as it has been attacked in this forum as erroneous and unsound.

In 1988 the Kentucky General Assembly considered broad tort reform legislation embodied in HB 551. From among the proposals, the Legislature enacted a statute codified at KRS 411.184 intended to modify Kentucky law with respect to punitive damages. Sparks, A Survey of Kentucky Tort Reform, 17 Northern Ky. L.Rev. 473 (1989). In general, the intent of the Legislature was to redefine the circumstances in which punitive damages were recoverable, and toward that end a new legal standard was established. Departing from the traditional common law standard which permitted a jury to impose punitive damages upon a finding of gross negligence as measured by an objective standard, the new statutory standard, here under review, requires a determination that the defendant acted with "flagrant indifference to the rights of the plaintiff and with a subjective awareness that such conduct will result in human death or bodily harm." It also requires proof by clear and convincing evidence. The Fayette Circuit Court and the Court of Appeals decided the constitutional question and invalidated the statute on the view that it offends Sections 14, 54 and 241 of the Constitution of Kentucky. 1 Both courts below held that the statute effectively destroyed the common law right of action for punitive damages and that such was precluded by the doctrine of jural rights.

The facts which give rise to this litigation are unremarkable but not unimportant. On May 18, 1990, at 7:00 a.m., appellee, Patricia Lynn Herald Wilson, was en route to the place of her employment as a school teacher. As she approached the intersection of Man-O-War and Palumbo in Lexington, she was struck by the vehicle being driven by appellant, a person who was intoxicated. At the scene, appellant was arrested and charged with DUI. She subsequently pled guilty to DUI in the Fayette District Court.

Appellee commenced litigation in the Fayette Circuit Court claiming compensatory and punitive damages. Appellant did not personally participate in the litigation although she was before the court and was represented by counsel. Appellee was unable to take appellant's deposition and appellant did not appear at trial or make an in-person defense.

At trial and after the close of all the evidence, appellant objected to the giving of an instruction on punitive damages. She asserted that the evidence did not support such an instruction due to the absence of evidence of her subjective awareness that her conduct would result in death or bodily harm. In response to this contention the trial court agreed with appellant, and for appellee's failure to present proof required by KRS 411.184, refused to give a punitive damages instruction. Appellee then modified her position asserting that the punitive damages statute was unconstitutional and sought a punitive damages instruction based on common law gross negligence. Upon review of the evidence the trial court held that such an instruction was warranted and submitted the case to the jury for a determination of punitive damages upon an instruction from Horton v. Union Light, Heat & Power Co., Ky., 690 S.W.2d 382, 388 (1985), which requires proof of "wanton or reckless disregard for the lives, safety or property of others." 2

In its findings of fact and conclusions of law rendered in support of its judgment holding

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KRS 411.184 unconstitutional, the trial court analyzed the statutory requirements and the common law requirements to determine whether the statute actually changed the common law. While the trial court believed the fact of appellant's intoxication would authorize a finding that she acted with flagrant indifference, the court found no evidence of appellant's subjective awareness that her conduct would result in death or bodily harm. On the other hand, the court found the evidence sufficient to satisfy the gross negligence standard of "wanton or reckless indifference to the rights of others." Id. Unmistakably, the trial court believed the statutory standard went far beyond the common law gross negligence standard, particularly with respect to knowledge of the inevitability of harm.

[T]he Court found that the evidence did not support a jury finding of "malice" as defined in the statutes sufficient to warrant a jury instruction on the issue. No evidence was introduced at trial that the Defendant specifically intended to cause tangible or intangible injury to the Plaintiff. In addition, although this Court believes the evidence of the Defendant's intoxication at the time of the accident was sufficient to support a jury finding that the Defendant acted with flagrant indifference to the rights of the Plaintiff, no evidence was introduced regarding the Defendant's "subjective awareness (underlining added) that such conduct [would] result in human death or bodily harm." Therefore, the evidence did not support an instruction to the jury on punitive damages under KRS 411.184.

Slip op. at 3. The Court of Appeals agreed with the trial court. It observed that in the pre-1891 cases in which gross negligence was defined, that neither intentional wrong nor the implication of bad faith belonged in the definition.

Despite its view that the pre-1891 cases represented "[d]ivergent lines of authority," Judge Johnstone, writing for the Court of Appeals' majority, stated:

[W]hen Kentucky's highest court allowed the plaintiff to recover punitive damages for gross negligence using an objective, "reasonable person" standard, it fixed that recovery avenue as a "jural right." Consequently, by denying the plaintiff a common law gross negligence instruction and further imposing a subjective awareness standard in the definition of "malice," we find the legislature has limited punitive damage recovery in circumstances otherwise allowing these damages prior to the adoption of our Constitution.

Slip op. at 13.

THE STATUTE VERSUS COMMON LAW

Appellant contends that KRS 411.184 is not a departure from the common law standard as there was no "well-established" standard prior to adoption of our Constitution. She argues that the statute merely clarified the confusion existing in common law and codified an existing standard which would be applicable to all claims for punitive damages. Appellant also argues that pre-1891 case law and decisions in this century reveal that malice, as expressed in various forms, is no different than subjective awareness under the statute; that malice necessarily presumes actual awareness. Appellee responds that the right to recover punitive damages for gross negligence was well established prior to 1891 and that the statutory requirement of subjective awareness of death or bodily harm represents the effective abolishment of negligence-based recovery of punitive damages and substitution of a requirement of knowledge or intent.

The decisions of this Court which bear upon the legal question under consideration have been rendered over the course of a century and a half. While the numbers of such decisions are not vast, neither are they insubstantial. In the process of this analysis we will focus on a few of the leading cases trusting that they sufficiently express the major concepts and the development of the law.

Going first to the pre-1891 cases, one encounters Chiles v. Drake, 59 Ky. (2 Met.) 146 (1859), in which the right to recover vindictive damages was allowed on the basis of recklessness although the killing was "not intentional." In Louisville & Nashville R.R. v. McCoy, 81 Ky. 403 (1883), gross neglect

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was the basis for recovery of punitive damages, and the court held that the definition of gross negligence required no proof of a defendant's intention to cause harm or show bad faith. This definition was upheld in Louisville & Nashville R.R. Co. v. Sheets, 11 Ky. L. Rptr. 781, 13 S.W. 248 (1890). Other cases from this period are not inconsistent. Fleet and Sample v. Hollenkemp, 52 Ky. 219, 227, 56 Am.Rep. 563 (1852) (punitive damages were allowed for inexcusable gross negligence "whether ignorantly or by design, whether with or without knowledge of the defendants."); Kountz v. Brown, 55 Ky. (16 B. Mon.) 577, 586 (1856) (allowed recovery of exemplary damages for injuries "recklessly committed"); and Hawkins Co. v. Riley, 56 Ky. (17 B. Mon.) 101, 110...

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