STEEL TECHNOLOGIES, INC. V. JASON CONGLETON (INDIVIDUALLY; IN HIS CAPACITY AS ADMINISTRATOR FOR THE ESTATE OF MELISSA CONGLETON; AND IN HIS CAPACITY AS PARENT AND NEXT FRIEND OF JASON AND SAMANTHA CONGLETON)
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STEEL TECHNOLOGIES, INC.
V.
APPELLAN
ON REVIEW FROM COURT OF APPEALS
2003-CA-002090
GALLATIN CIRCUIT COURT
NO. 02-CI-000162, 02-CI-000172, 02-CI-000180
JASON CONGLETON (INDIVIDUALLY; IN HIS CAPACITY AS
ADMINISTRATOR FOR THE ESTATE OF MELISSA
CONGLETON ; AND IN HIS CAPACITY AS PARENT AND
NEXT FRIEND OF JACOB AND SAMANTHA CONGLETON)
APPELLEES
OPINION OF THE COURT BY JUSTICE NOBLE
AFFIRMING IN PART AND REVERSING IN PART
In this wrongful death action, the Gallatin County Circuit Court jury returned a
significant verdict awarding damages for wrongful death, loss of parental consortium,
and pre-impact fright against Appellant Steel Technologies, Inc. The jury also awarded
punitive damages . Steel Technologies challenges the loss of parental consortium
award as being unsupported by the evidence ; the pre-impact fright damages as being
unavailable under Kentucky law; and the punitive damages as being in violation of KRS
411 .184(3), improperly imposed for mere negligence, and in violation of due process .
1. Background
This case arose from a tractor-trailer accident that resulted in the death of
Melissa Congleton . The driver of the tractor-trailer, Ralph Arnold, was employed by
Steel Technologies to haul the large steel coils produced in Ghent, Kentucky to other
facilities . The steel coils were hauled using a flatbed trailer, secured with steel chains
and other equipment. On the day of the accident, Arnold was hauling a steel coil that
weighed approximately 37,000 pounds. He had secured the coil with three steel chains,
though regulations promulgated by the Federal Motor Carrier Safety Administration
required at least five chains given the weight of the cargo and the type of chains in use.
On Highway 421 in Henry County, an unidentified car stopped in the path of
Arnold's tractor-trailer, causing him to brake suddenly. Two of the chains holding the
steel coil broke, and the coil fell through the side of the flatbed trailer, directly in the path
of an oncoming pick-up truck in the next lane. The pick-up struck the steel coil and
bounced off the side of the road, where it struck a stone wall before coming to a stop.
The front driver's side quarter of the pick-up was crushed, and the driver, Melissa
Congleton, died at the scene from the impact .
Congleton's husband filed multiple suits against Steel Technologies, Inc. : one on
behalf of his wife's estate seeking damages for wrongful death, intentional infliction of
emotional distress, pain and suffering, and punitive damages ; one on his own behalf for
loss of spousal consortium ; and one on behalf of their two children for loss of parental
consortium . The various suits were later consolidated.
Prior to trial, the trial court granted summary judgment in favor of Steel
Technologies as to the claims of loss of spousal consortium and intentional infliction of
emotional distress ; however, the court granted summary judgment against Steel
Technologies on the issue of liability, holding that the company was vicariously liable for
its driver's actions as a matter of law. That left only the issue of damages for the
remaining claims to be resolved at trial.
The jury heard evidence for two days. At the close of the plaintiff's case, the trial
court determined that instructions on pain and suffering after the impact would be
improper. At the close of the defendant's case, the trial court decided that the evidence
supported giving an instruction on the emotional distress caused by Congleton's
perception of the impending impact (pre-impact fear), and also gave damages
instructions on wrongful death, punitive damages, and loss of parental consortium for
the two children . The jury returned an award of $667,267 in compensatory damages for
the wrongful death; $1,000,000 in loss of consortium damages for each child ; $100,000
in pre-impact fear damages ; and $1,000,000 in punitive damages . The total award was
for $3,767,267.
Steel Technologies satisfied the judgment in part, but appealed the awards for
punitive damages, pre-impact fear, and loss of parental consortium . The Court of
Appeals affirmed . Steel Technologies sought and was granted discretionary review by
this Court.
11. Analysis
A. Preservation
Several of Steel Technologies' claims consist of challenges to the sufficiency of
the evidence. The Appellees respond to the merits of all claims, but also argue that the
claims of error related to the sufficiency of the evidence were not properly preserved for
appellate review because there was no motion for a directed verdict at the close of all
the evidence . In support, the Appellees point to an order from the Court of Appeals,
which they claim held that no directed verdict motion was made and which has now
become the law of the case, since no appeal was taken from that order.
Steel Technologies responds by noting that the record shows it did move for a
directed verdict at the end of the Appellees' proof, followed by a motion for a judgment
notwithstanding the verdict (JNOV) after the trial, and that there is some evidence that it
moved for a directed verdict at the close of all the proof. In the alternative, Steel
Technologies argues that the Appellees are barred from raising the preservation issue
at this point because the matter was implicitly decided against them by the Court of
Appeals, yet no cross-motion for discretionary review was filed addressing it.
The record does not show whether a motion for a directed verdict was made at
the close of Steel Technologies' proof. The record of the trial is on three video tapes .
The testimony of Steel Technologies' last witness is included near the end of the
second tape . After the witness left the stand, the trial judge took a short recess and
allowed the jury to leave the court room. The tape shows that after the jury left, the
attorneys and the judge remained in the court room and discussed what to do about a
police officer having taken photographic exhibits with him when he finished testifying .
The tape then ends; the final time stamp is 10:56:49 a.m. The next tape picks up at
11 :15 :40 a .m. with the attorneys conferring with the judge about the proposed jury
instructions . The gap of approximately 20 minutes between the tapes is the period
during which a motion for a directed verdict, if any, was likely made.
Steel Technologies has cited to the following comment by one of its attorneys as
proof that the directed verdict motion was made : "Judge, I don't want to waive any of
our objections to instructing the jury on any of these counts, but without waiving these,
in light of the court's ruling." The comment, made approximately ten minutes into the
jury instructions discussion, was made in support of the use of Steel Technologies'
proposed punitive damages instruction .
Whether a motion for a directed verdict was made became an issue after the trial
when Steel Technologies moved for JNOV and began the appeals process . The trial
court denied the JNOV motion. No notice of appeal was filed within the first thirty days
after entry of the judgment. The Appellees moved to execute the judgment, arguing that
the JNOV motion had not extended the time for filing the appeal since there had been
no directed verdict motion at the close of all the proof. The trial court held execution of
the judgment at that time, holding that the time for filing an appeal began to run the day
after it ruled on the JNOV motion, assuming that Steel Technologies had been entitled
to file the JNOV motion .
The court also noted that whether the JNOV motion had been properly filed was
not yet ripe and reserved ruling on the issue since it could be rendered moot by Steel
Technologies's failure to file a notice of appeal . Nevertheless, the court noted that it
had reviewed the record to determine whether a directed verdict motion had been made
and found that "[t]he portions of the tape viewed are not conclusive on this issue." The
court also noted that it did "not recall such a motion having been made but that is not
conclusive even in the court's own mind" and that a hearing on the issue would be
necessary should a notice of appeal be filed. Steel Technologies filed a notice of
appeal the same day the court entered this order and had filed a supersedeas bond
several days before.
The Appellees subsequently objected in the trial court to the notice of appeal as
untimely, again claiming that the JNOV motion had not been preceded by a directed
verdict motion . The parties then filed multiple other motions and responses quibbling
about the details and addressing the validity of the supersedeas bond, the notice of
appeal, and the trial court's handling of the motion to execute the judgment. Competing
affidavits about whether a directed verdict motion had been made were included with
these filings . The trial court ultimately approved the supersedeas bond and stayed
execution of the judgment during the appeal. The court's last order on this issue,
however, did not address the propriety of the JNOV motion or its effect on the timelines
of the appeal . No further action related to whether the directed verdict motion had been
made was taken at the trial court level .
The Appellees continued to complain about the lack of a directed verdict motion
once the appellate process began . They filed a motion to dismiss the appeal, arguing
that the appeal was untimely because the motion for JNOV was void due to the failure
to move for a directed verdict and could not be relied on to stop the running of time for
an appeal. Steel Technologies responded that it had moved for a directed verdict, but
that a twenty-minute gap in the trial court's video record indicated that the motion simply
had not been recorded . The Court of Appeals initially passed the motion to its
consideration of the merits of the appeal, which allowed the briefing of the case to
proceed . In their brief to the Court of Appeals, in a very short section titled "Appellant's
Appeal Was out of Time, and the Issues Presented Were Not Preserved for Appeal,"
the Appellees "restate[d] and reiterate[d] as if reprinted every argument presented" in
the motion to dismiss and noted that they "stand by [their] previously stated position."
Eventually, the Court of Appeals addressed the motion in a separate order that was
entered approximately two weeks before the opinion on the merits of the appeal was
rendered .
The Court of Appeals noted in this order "that the record does not reflect that
Steel Technologies moved for a directed verdict at the close of all the evidence" and
"that a portion of the proceedings when such a motion might have been made appears
to have been omitted from the videotape," but that "it is an appellant's duty to see that
the record is complete on appeal." The Court of Appeals noted that lack of a directed
verdict motion at the close of all evidence meant that the trial court could not have
granted a subsequent JNOV motion .
Nevertheless, the Court of Appeals held that the appeal was timely filed because
the fact that the trial court could not have granted the JNOV motion did not mean that it
could not consider the motion . It further held that the filing of the motion was sufficient
to stop the running of the time for filing the appeal, and time began to run only upon the
denial of the JNOV motion. Based on this reasoning, the Court of Appeals denied the
motion to dismiss .
The Appellees now claim the Court of Appeals thus determined that various
issues raised by Steel Technologies were not preserved for appeal . The Appellees
claim that the record does not show that a directed verdict motion was made at the
close of Steel Technologies' proof is correct, and given the conflicting opinions about
whether it was made, this Court must conclude in this instance that it was not.
Steel Technologies can only prevail on an insufficiency of the evidence claim if
preserved through a motion for a JNOV, which in turn must be predicated on a directed
verdict motion at the close of all the proof. A mid-trial directed verdict motion alone, like
the one made and relied on in part now by Steel Technologies, is insufficient to
preserve an insufficiency of the evidence claim. Baker v. Commonwealth , 973 S .W.2d
54, 55 (Ky. 1998) ("A defendant must renew his motion for a directed verdict, thus
allowing the trial court the opportunity to pass on the issue in light of all the evidence, in
order to be preserved for our review."). Allegations in post-trial affidavits that the midtrial motion was renewed at the end of trial are no substitute for an actual record of such
a renewed motion being made, especially when contradicted by opposing affidavits.
Vague comments about preserving objections to the granting of any instructions are
also insufficient .
If a portion of a trial is not recorded, whatever the reason, the parties
are not without recourse . See CR 75.13 (allowing narrative supplements where there
are gaps in the record). This was not done here .
Ultimately, Steel Technologies has not shown sufficient evidence that an
appropriate motion was made . It is the appellant's duty to present a complete record on
appeal . Failure to show preservation of claims prohibits this Court's review of those
claims.
Steel Technologies argues that the Appellees should be barred from raising
preservation at this point. Steel Technologies is correct that any issues decided against
the Appellees at the Court of Appeals cannot be raised before this Court without a
cross-motion for discretionary review. See Perry v. Williamson , 824 S .W.2d 869,
871 (Ky.1992) ("Our rules are specific that if the motion for discretionary review made
by the losing party in the Court of Appeals is granted, it is then incumbent upon the
prevailing party in the Court of Appeals to file a cross-motion for discretionary review if
respondent wishes to preserve the right to argue issues which respondent lost in the
Court of Appeals, or issues the Court of Appeals decided not to address. If the party
prevailing in the Court of Appeals wishes further consideration of such issues along with
the issues for which discretionary review has been granted, the prevailing party must file
a cross motion for discretionary review."); Commonwealth Transp . Cabinet, Dept. of
Highways v. Taub, 766 S.W.2d 49, 51-52 (Ky.1988) ("Upon our grant of the
Commonwealth's motion for discretionary review, this Court undertook review of the
decision of the Court of Appeals. We will not address issues raised but not decided by
the Court below. It is the rule in this jurisdiction that issues raised on appeal but not
decided will be treated as settled against the appellant in that court upon subsequent
appeals unless the issue is preserved by cross-motion for discretionary review. CR
76.21(1) ; Nashville, C. & St.L. Ry.Co. v . Banks, 168 Ky. 579, 182 S.W. 660 (1916); and
Eagle Fluorspar Co. v. Large , 237 Ky. 263, 35 S.W.2d 303 (1931).
. . . [F]ailure to file a
cross-motion for discretionary review precludes further review in this Court .").
Steel Technologies' argument, however, incorrectly assumes that preservation of
an error is a separate issue from the claim of error itself. Rather, preservation is simply
one aspect of Steel Technologies' insufficiency-of-the-evidence claims. Essentially, the
Appellees' allegation that some of Steel Technologies' claims of error were not properly
preserved is simply an alternate ground for affirming the Court of Appeals. Such an
allegation is not required to be cross-appealed . See Hale v. Combs, 30 S.W.3d 146,
150 (Ky. 2000) ("[T]he prevailing party need not file a cross-appeal in order to assert
that the lower court (or administrative agency) reached the right result for the wrong
reason ."); Commonwealth, Corr. Cabinet v. Vester, 956 S.W.2d 204, 205-06 (Ky. 1997)
("Where the prevailing party seeks only to have the judgment affirmed, it is entitled to
argue without filing a cross-appeal that the trial court reached the correct result for the
reasons it expressed and for any other reasons appropriately brought to its attention.") .
The Appellees are not now barred from asserting that Steel Technologies' claims were
not preserved.
The question then becomes which of Steel Technologies' claims of error were
not preserved for review.
Steel Technologies challenges the punitive damages award on three grounds,
claiming that they are not allowed under KRS 411 .184(3), which limits vicarious liability
for punitive damages to instances where the employer authorized, ratified, or should
have anticipated the bad conduct of its employee; that they cannot be imposed for
ordinary negligence ; and that they violated due process limitations .
Steel Technologies' claim under KRS 411 .184(3) is that there is a "complete
absence of any evidence that [it] authorized, ratified or should have anticipated those
acts . . . ." The second claim is basically that the proof at most showed that Steel
Technologies was negligent, which alone is insufficient to impose punitive damages.
These two claims are essentially that the evidence was insufficient to allow the punitive
damages . As such, they were not preserved and will not be addressed by this Court.
Steel Technologies challenges the loss of parental consortium damages on the
ground that they were not supported by the evidence because the children did not
testify, nor was any other evidence offered that would support damages . This argument
was also not preserved for review and will not be addressed . In the course of this
argument, Steel Technologies also claims that the trial court failed to properly instruct
the jury that damages were to be limited to the children's minority, that the Appellees'
counsel urged the jury to grant damages beyond that limited period, and that Appellees'
counsel invoked the "golden rule" by asking the jury to step into the shoes of the
children in determining the damages . No contemporaneous objection was made at trial
to any of these. As such, they also were not preserved for review.
Insofar as the Court of Appeals affirmed the trial court on all of these issues, its
judgment is affirmed, albeit for different reasons. Steel Technologies' remaining claims
were preserved for review and are addressed below.
B. Pre-impact Fear
Steel Technologies argues that the award for pre-impact fear conflicts with longstanding Kentucky law. Specifically, the company argues that the jury instructions and
the award violated the impact rule for negligently inflicted mental damages. The
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Appellees respond that the impact rule was satisfied, since Mrs. Congleton was struck
by the steel coil. They also imply that the impact rule should be abandoned since a
negligence action need only show that the negligent conduct caused harm.
The Appellees' complaint included a claim for pain and suffering of Mrs .
Congleton . However, at the close of their case, the trial court determined that there had
been no evidence of pain and suffering after the impact because the evidence indicated
that Mrs. Congleton was struck unconscious by the impact . Nevertheless, the court
chose to instruct the jury on whether an award for pre-impact fear was appropriate . The
judge referred to several unnamed cases for the proposition that under Kentucky law,
pre-impact emotional distress damages are allowed when there is a "touching" involved ;
he also distinguished this case from those where someone is scared, for example, "by a
mean look" without any contact. The court then gave the following instruction to the
jury:
If you believe from the evidence that Melissa Congleton, as a result of the
steel coil falling off the truck and colliding with her vehicle suffered serious
emotional anxiety arising from the fear of injury, and that said fear was
reasonable, that the occurrence of such injury was a reasonable medical
likelihood, and that the anxiety was caused by exposure to the risk for
which Steel Technologies, Inc. is legally responsible, then you may decide
to award damages for emotional distress suffered by Melissa Congleton, if
any, from the time she may have anticipated said event, and up until the
moment she lost consciousness .
Under this instruction, the jury awarded $100,000 in such damages . The evidence to
support the damages included skid marks, implying that Mrs . Congleton saw the coil
before she hit it, and testimony that even after death, her face was fixed in the
expression of a scream .
Though it is not clear what cases the trial judge relied on, his characterization of
the law was partly accurate in that a touching has traditionally been required before
recovery may be had for negligently inflicted emotional distress. "lt is well established in
this jurisdiction that `an action will not lie for fright, shock or mental anguish which is
unaccompanied by physical contact or injury ."' Deutsch v. Shein, 597 S.W.2d 141, 14546 (Ky. 1980) (quoting Morgan v. Hightower's Adm'r, 291 Ky. 58, 59-60, 163 S.W.2d 21,
22 (1942)); see also Brown v. Crawford, 296 Ky. 249, 253, 177 S.W.2d 1, 3 (1943)
("This court is committed to the doctrine that in ordinary actions for mere negligence or
where the injury to another is not willful, there can be no recovery for mental suffering
where there has been no physical contact ."). In fact, the Appellees' brief relies heavily
on Deutsch , describing its holding as requiring only a touching, which could be remote
from any emotional injury . In fact, the case does note that "[c]ontact, however slight,
trifling, or trivial, will support a cause of action ." Id.
The Appellees argue that cases like Deutsch have followed the "spirit and
essence" of the Restatement (Second) of Torts, which allows recovery for "fright, shock,
or other emotional disturbance resulting from the bodily harm or from the conduct which
causes it . . . ." Restatement (Second) of Torts § 456(a) (1965) . A comment to that
section indicates that recovery should be allowed in a situation similar to this one . Id . §
456(a) cmt. e ("Thus one who is struck by a negligently driven automobile and suffers a
broken leg may recover not only for his pain, grief, or worry resulting from the broken
leg, but also for his fright at seeing the car about to hit him.") . The Court of Appeals
relied heavily on this section of the Restatement in reaching its decision .
However, this reading of the Deutsch is incomplete . As Deutsch goes on to note,
"it is necessary that the damages for mental distress sought to be recovered be related
to, and the direct and natural result of, the physical contact or injury sustained ." Id.
(emphasis added) . Kentucky also has a line of cases holding that a cause of action
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does not even accrue until physical injury manifests . See also Wood v. Wyeth-Ayerst
Laboratories, Div. of American Home Products , 82 S .W.3d 849 (Ky. 2002); Capital
Holding Corp. v. Bailey , 873 S .W.2d 187 (Ky. 1994) ; Davis v. Graviss , 672 S .W .2d 928
(Ky. 1984); Louisville Trust Co. v. Johns-Manville Products , 580 S.W.2d 497 (Ky. 1979).
The rule derived from these cases then is clear: It is not enough that emotional distress
be accompanied by contact-it must be caused by the contact . This also means that
any contact must precede the emotional distress before recovery is permissible under a
negligence theory. The approach found in the Restatement does not reflect the law as
it currently stands in Kentucky.
The rationale for the current rule is that pre-impact fear, like other alleged
negligently caused emotional distress, is possibly trivial and simply too speculative and
difficult to measure unless is it directly linked to and caused by a physical harm .
Deutsch , 597 S .W .2d at 145-46 ("`The reason being that such damages are too remote
and speculative, are easily simulated and difficult to disprove, and there is no standard
by which they can be justly measured ."' (quoting Morgan v. Hightower's Adm'r, 291 Ky.
58, 59-60, 163 S.W .2d 21, 22 (1942)). The proof of the fear in this case-the testimony
of a person at the scene of the accident that the decedent's facial expression showed
she saw the accident coming and was terrified-simply underscores the speculative
nature of such harm. Mrs. Congleton's mental distress, if any, simply was caused not
by the impact she suffered, but by fear of the impact. Under the impact rule as currently
applied in Kentucky, her pre-impact fear and shock cannot serve as the basis of a claim,
and any damages for such a claim are not recoverable .
The approach to the impact rule urged by the Appellees (and applied by the
Court of Appeals) amounts to an alteration of the impact rule making it merely an
13
accompanied-by-impact rule . The Appellees have also implied the Court should simply
do away with the impact rule altogether; the amicus brief submitted by the Kentucky
Academy of Trial Attorneys (KATA) explicitly argues that the rule should be abandoned.
That, however, is easier said than done. Crafting a new, reasonable rule that would still
take into account the concerns about the danger of fraud and speculative nature of
mental harms would be difficult without the proper case. Even the rule on intentional
infliction of emotional distress, for which no contact has traditionally been required,
recognizes these concerns and imposes greater restrictions than would come under the
non-traditional and non-impact rules proposed by the Appellees and KATA. See Craft
v. Rice, 671 S .W .2d 247, 249 (Ky. 1984) (holding that tort of outrage requires that the
conduct be outrageous and intolerable in that it offends against the generally accepted
standards of decency and morality, and that the emotional distress be severe).
Divining a new rule is further exacerbated in this case by the speculative nature
of the proof at trial, which consisted primarily of the opinion of an emergency services
worker about what the grimace on the victim's face meant. There was no scientific or
medical proof of mental injury, and the victim herself was not available to testify, having
been killed by the impact. In fact, wrongful death actions such as this are not
susceptible to the sort of proof that might counsel in favor of altering or abandoning the
impact rule.
On the other hand, injury actions could well give rise to a strong challenge to the
impact rule in the future if the victim can give a first-hand account or reliable eyewitness testimony is available, and there is demonstrable evidence of mental distress
manifesting in a medical injury proven through expert testimony . Absent such proof in
this case, the Court declines to alter the impact rule.
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Since the pre-impact fright damages in this case conflict with the impact rule as it
currently stands, that portion of the judgment must be reversed .
C . Constitutionality of the Punitive Damages Award
Steel Technologies claims that the award of $1,000,000 in punitive damages
violated due process under BMW of N . America v. Gore, 517 U .S . 559,116 S.Ct. 1589,
134 L.Ed.2d 809 (1996), State Farm Mutual Automobile Insurance Co . v. Campbell , 538
U .S. 408,123 S .Ct 1513, 155 L .Ed .2d 585 (2003), and related cases. The company
claims that the jury instruction on punitive damages was flawed because it included no
limits on the amount available and that the punitive damages award itself was
unconstitutionally excessive.
When discussing the punitive damages instructions after the close of proof, the
parties discussed the due process cases and their effect on limiting punitive damages
awards. However, Steel Technologies' attorney agreed to omit a specific limitation on
the amount of the damages in the instruction, while reserving an objection to any award
that was excessive and noting, "We don't have to argue that today." This was the
correct approach, as the due process analysis requires a review of a punitive damages
award after the fact. It also means that even if limitations in the instructions were
appropriate, Steel Technologies waived them in favor of a post award review.
After the trial, Steel Technologies challenged the constitutionality of the punitive
damages award in its JNOV motion, arguing that the award should be set aside entirely
as requested in the directed verdict motions allegedly made at trial . Such a claim
should actually be brought under CR 59.05, since it is a challenge to the amount of
damages in light of due process requirements rather than a challenge to the sufficiency
of the evidence. However, the form of the claim will not control the substance . Steel
15
Technologies challenged the constitutionality of the award after trial; such a claim is
sufficient to invoke the due process clause of the Fourteenth Amendment and therefore
require review pursuant to the United States Supreme Court's punitive damages
jurisprudence .
It is unclear whether the trial court engaged in the substantive analysis required
by that jurisprudence, since the JNOV motion was summarily denied . As the trial court
is also required to engage in the due process review, specific findings and conclusions
by the court are preferred because they aid appellate review. However, the failure to
make such findings does not bar review on appeal because the appellate court's review
is de novo. Cooper Industries, Inc . v. Leatherman Tool Group, Inc . , 532 U.S . 424, 436,
121 S .Ct. 1678, 1685-86 (2001) ("[C]ourts of appeals should apply a de novo standard
of review when passing on district courts' determinations of the constitutionality of
punitive damages awards ."). It is unclear what standard of review is required on a
subsequent appeal, since in Cooper Industries the Court remanded the case to the
Court of Appeals for the due process review. However, since in Campbell the Supreme
Court engaged in the de novo analysis itself, that standard of review appears
appropriate even on subsequent, discretionary appeals such as this one. Regardless of
the appropriate standard of review, the Court of Appeals' review in this case simply was
not in error .
Gore and Campbell require that punitive damages awards be reviewed under
three "guideposts": "(1) the degree of reprehensibility of the defendant's misconduct; (2)
the disparity between the actual or potential harm suffered by the plaintiff and the
punitive damages award; and (3) the difference between the punitive damages awarded
by the jury and the civil penalties authorized or imposed in comparable cases."
16
Campbell , 538 U .S. at 418,123 S.Ct. at 1520; Gore, 517 U .S . at 575,116 S.Ct. at
1598-99 .
The first guidepost, which is the "most important indicium of the reasonableness
of a punitive damages award," Gore, 517 U .S. at 575, 116 S.Ct. at 1599, requires the
review of a variety of factors :
the harm caused was physical as opposed to economic; the tortious
conduct evinced an indifference to or a reckless disregard of the health or
safety of others ; the target of the conduct had financial vulnerability ; the
conduct involved repeated actions or was an isolated incident; and the
harm was the result of intentional malice, trickery, or deceit, or mere
accident .
Campbell , 538 U .S. at 419,123 S.Ct. at 1521 . Unlike the harm involved in Campbell
and Gore, the harm in this case was not economic . Rather, it consisted of the violent
death of a young mother. The jury also found that the conduct in question involved
reckless disregard for the lives or safety of others . While the other factors were not
present, meaning the degree of reprehensibility involved is certainly lower than if Steel
Technologies had intentionally harmed Mrs . Congleton, there is no doubt that some
reprehensibility is present.
Under the second guidepost, it is clear that the difference between the
compensatory damages and the punitive damages awarded was not outrageously
disparate . The Supreme Court has held that few punitive damages awards that exceed
a single digit multiplier of compensatory damages will survive constitutional scrutiny,
and that the constitutional limit may be closer to a 4-to-1 ratio of punitive to
compensatory damages . Id . at 425, 123 S.Ct at 1524. The punitive damages award of
$1,000,000 fell well within these ranges. The direct compensatory damages for Mrs .
Congleton's wrongful death were $667,267. That makes for a ratio of approximately 1'/2
to 1 . When the children's compensatory damages awards totaling $2,000,000 are taken
17
into account, the ratio of punitive damages to compensatory damages is significantly
lower, approximately 3/8 to 1 . Both these ratios are significantly lower than those found
to be inappropriate by the Supreme Court. See id . (ratio of 145 to 1) ; Gore, 517 U .S . at
582, 116 S.Ct . at 1603 (ratio in the range of 500 to 1) .
With regard to the third guidepost, the civil penalty allowed by the Motor Vehicle
Carrier Administration for the sort of violation in this case is $10,000 . In fact, Steel
Technologies did pay a fine of $10,000 for this incident. While the civil fine is
significantly less than the punitive damages awarded in this case, the difference is
significantly less than that encountered in Gore and Campbell , both of which also
discussed $10,000 civil penalties. Campbell , 538 U .S . at 428, 123 S.Ct. at 1526 ("The
most relevant civil sanction under Utah state law for the wrong done to the Campbells
appears to be a $10,000 fine . . . ."); Gore, 517 U.S . at 584, 116 S .Ct. at 1603 (noting
that the maximum fine under the law of the state where the conduct occurred was
$2,000 but noting that other states allowed up to $10,000) . The disparity between the
fine in this case and the punitive damages is several orders of magnitude less than that
encountered in both Gore and Campbell .
While the degree of reprehensibility in this case may not even approach the
conceivable maximum, it is balanced by the fact that the ratios of punitive damages to
compensatory damages and to civil fines are significantly lower than those in the
Supreme Court's jurisprudence . In light of this, the punitive damages in this case were
not excessive or exorbitant and therefore survive the due process challenge.
The decision of the Court of Appeals is affirmed in part and reversed in part, and
this case is remanded to the circuit court with instructions to vacate that portion of the
judgment awarding damages for emotional anxiety.
18
Lambert, C.J. ; Cunningham, Schroder and Scott, JJ ., concur. McAnulty, J.,
concurs by separate opinion . Minton, J., not sitting .
COUNSEL FOR APPELLANT :
Charles S . Cassis
Frost, Brown & Todd
40 West Market Street
32nd Floor
Louisville, Kentucky 40202-3363
Stockard R. Hickey, 111
Frost, Brown & Todd
40 West Market Street
32 nd Floor
Louisville, Kentucky 40202-3363
COUNSEL FOR APPELLEES :
Meredith L. Lawrence
107 East High Street
PO Box 1330
Warsaw, Kentucky 41095
COUNSEL FOR AMICUS CURIAE, KENTUCKY ACADEMY OF TRIAL ATTORNEYS :
Joe C. Savage
Savage, Elliott, Houlihan, Moore, Mullins & Erdmann
PNC Bank Building
Suite 810
200 West Vine Street
Lexington, Kentucky 40507
Cory Michael Erdmann
Savage, Elliott, Houlihan, Moore, Mullins & Erdmann
PNC Bank Building
Suite 810
200 West Vine Street
Lexington, Kentucky 40507
COUNSEL FOR AMICUS CURIAE, TRUCKING INDUSTRY DEFENSE
ASSOCIATION :
F. Larkin Fore
Fore, Miller & Schwartz
Suite 700 North, First Trust Centre
200 South Fifth Street
Louisville, Kentucky 40202
Sarah Megan Fore
Fore, Miller & Schwartz
Suite 700 North, First Trust Centre
200 South Fifth Street
Louisville, Kentucky 40202
RENDERED : JUNE 21, 2007
TO BE PUBLISHED
su~rr~ar faoix~ Of
ettfurkV
2005-SC-000551-DG
STEEL TECHNOLOGIES, INC.
V.
APPELLANT
ON REVIEW FROM COURT OF APPEALS
2003-CA-002090
GALLATIN CIRCUIT COURT
NO. 02-CI-000162, 02-CI-000172, 02-CI-000180
JASON CONGLETON (INDIVIDUALLY ; IN HIS CAPACITY AS
ADMINISTRATOR FOR THE ESTATE OF MELISSA
CONGLETON ; AND IN HIS CAPACITY AS PARENT AND
NEXT FRIEND OF JACOB AND SAMANTHA CONGLETON)
APPELLEES
CONCURRING OPINION BY JUSTICE McANULTY
I agree with the Majority that the amount of punitive damages awarded did not
violate due process as promulgated by Gore and Campbell . I also agree that Steel
Technologies did not preserve the other two issues relating to punitive damages - (1)
whether the award violated KRS 411 .184(3) and (2) whether Steel Technologies'
conduct rose to the level of gross negligence . The record is incomplete as to the
preservation of these issues and it is Appellant's duty to ensure a complete record for
appeal . CR 75 .13 allows an appellant to prepare a narrative statement to supplement
the record in places where a gap may exist in the recording or transcript . Steel
Technologies failed to avail itself of this rule, instead choosing to cite instances in the
record from which it might be inferred that the issue was properly preserved. Inferential
preservation does not satisfy the requirements of the rules . See Hall v. King , 432
S .W .2d 394 (1968) (requiring motion for directed verdict at the close of all the evidence
for entitlement to JNOV) ; CR 76.12(4)(c)(v) (Appellant's brief must contain "a statement
with reference to the record showing whether the issue was properly preserved for
review[ .J") .
I write separately out of concern that future plaintiffs will analogize their cases to
the facts of this one and feel likewise entitled to punitive damages . This is a regrettable
and tragic case, resulting in the death of a young mother, but it is also a case of
ordinary negligence . The Majority opinion should not be construed as setting a new
culpability standard for an award of punitive damages ; gross negligence is still required
by both our statutory and common laws . "If the act was willful or the negligence gross,
punitive damages may be recovered." KRS 411 .130 . Gross negligence requires "a
finding of failure to exercise reasonable care, and then an additional finding that this
negligence was accompanied by'wanton or reckless disregard for the lives, safety or
property of others ."' Horton v. Union Light, Heat & Power Co., 690 S .W.2d 382, 389390 (1985). In my opinion, although Steel Technologies failed to exercise reasonable
care, the failure did not evince a wanton or reckless disregard for others . This case
should not serve as notice that ordinary negligence cases warrant punitive damages .
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