RENDERED: JUNE 17, 2022; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2020-CA-1115-MR
CUSTOM FOOD PRODUCTS, LLC AND THERESA BALENTINE APPELLANTS
APPEAL FROM BATH CIRCUIT COURT v. HONORABLE ROBERT W. MCGINNIS, JUDGE ACTION NO. 16-CI-90163
STELLA SHROUT APPELLEE
AND
NO. 2020-CA-1180-MR
STELLA SHROUT CROSS-APPELLANT
CROSS-APPEAL FROM BATH CIRCUIT COURT v. HONORABLE ROBERT W. MCGINNIS, JUDGE ACTION NO. 16-CI-90163
CUSTOM FOOD PRODUCTS, LLC AND THERESA BALENTINE CROSS-APPELLEES OPINION AFFIRMING IN PART AND REVERSING IN PART
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; GOODWINE AND MCNEILL, JUDGES.
MCNEILL, JUDGE: Custom Food Products, LLC (“Custom Food”) and Theresa
Balentine (“Balentine”) appeal from a Bath Circuit Court judgment awarding
Stella Shrout (“Shrout”) $1,087,440 in damages following a jury trial. Shrout
cross-appeals from the same judgment. For the reasons set forth below, we reverse
the judgment as to the appeal and affirm the judgment as to the cross-appeal, with
directions that new judgment be entered in conformity this Opinion.
Custom Food manufactures processed beef, chicken, and pork for
consumption across the United States. Shrout worked as an at-will employee at
Custom Food’s Owingsville, Kentucky facility until she was terminated on
October 6, 2016. On that date, a forklift hit Shrout as she was showing a new
employee around the production floor.1 Pursuant to company policy, Shrout was
taken to a nearby medical clinic to be drug tested.
1 Shrout was not physically injured as a result of this incident.
-2- Shrout tested positive for oxycodone, opiates, and methamphetamine.2
Based upon these results, Balentine, Custom Food’s Human Resources Director at
the time, terminated Shrout’s employment. Shrout disputed the positive test result
and requested the opportunity to be retested. Shrout was emotional and crying and
tried to convince Balentine to change her mind. According to Shrout, Balentine
authorized her to be tested again by a different medical facility and told her if the
result was different she would reconsider.
Shrout went to St. Claire Medical Center to be retested. While
awaiting the results, Shrout called Balentine multiple times denying the positive
drug test and asking for her job back. The second test was negative for oxycodone
and methamphetamine; however, the document provided by the medical review
service that confirmed the test simply states, “Negative Opiates.” Shrout informed
Balentine of the negative result but Balentine refused to reconsider Shrout’s
termination.
On December 2, 2016, Shrout filed a complaint in the Bath Circuit
Court against Custom Food and Balentine alleging defamation, workers’
compensation retaliation, wrongful use of administrative proceeding, negligence,
2 Shrout apparently had a prescription for hydrocodone (an opiate) and had provided a list of her medications to Custom Food when she was hired. It is unclear if Balentine was aware of this information at the time Shrout was terminated.
-3- intentional infliction of emotional distress (IIED), and negligent infliction of
emotional distress (NIED). A jury trial was held on February 26, 2020.
At trial, Shrout presented evidence that her termination caused her
great emotional distress. She testified that employees from Custom Food would
approach her in public about the positive drug test and that she carried her negative
drug test in her pocket to prove she was clean. She further testified the negative
drug test prevented her from getting another job because she had to notify
prospective employers that she had been fired for a “dirty” drug test. She stated
she had many “dark days” where she would just sit in her apartment for days at a
time and do nothing.
Shrout’s expert psychologist testified that she suffered from a form of
post-traumatic stress disorder because of her termination. He testified that Shrout
took great pride in her work and that losing her job was traumatic. It impacted her
self-esteem and caused financial stress. He further opined that Shrout would need
continued therapy and medication and would unlikely be able to work for the
remainder of her life.
At the close of Shrout’s case, appellants moved for directed verdict on
all claims. The trial court granted the motion as to defamation and wrongful use of
administrative proceeding. Following the evidence, the trial court denied
appellants’ renewed motion for directed verdict on the remaining claims.
-4- The jury returned a verdict in favor of appellants on the workers’
compensation retaliation and IIED claims and in favor of Shrout on the negligence
and NIED claims. Shrout was awarded $750,000 for pain and suffering, $37,440
for medical expenses, and $300,000 for loss of income and loss of ability to earn
income in the future for a total award of $1,087,440 in damages. This appeal and
cross-appeal followed. Further facts will be set forth as necessary below.
Appellants maintain they were entitled to a directed verdict as a
matter of law on Shrout’s negligence and NIED claims because Shrout was an at-
will employee and was owed no duty of care regarding her termination. As an
initial matter, Shrout contends appellants have waived this argument by failing to
tender jury instructions on negligence and NIED.3 However, appellants’ challenge
is to the giving of the instruction itself, not the language of the instruction.
Appellants moved for directed verdict at the close of Shrout’s case and again at the
close of all evidence thus preserving the issue for appeal. Ray v. Commonwealth,
611 S.W.3d 250, 266 (Ky. 2020), cert. denied sub nom. Ray v. Kentucky, No. 20-
8236, 2021 WL 4508153 (U.S. Oct. 4, 2021).
Turning first to the negligence claim, to prove negligence, a plaintiff
must show “(1) a duty on the part of the defendant; (2) a breach of that duty; and
3 Appellants did in fact tender jury instructions on negligence and NIED at trial following the court’s denial of their motion for directed verdict, while maintaining they owed no duty of care to Shrout as a matter of law.
-5- (3) consequent injury.” Mullins v. Commonwealth Life Ins. Co., 839 S.W.2d 245,
247 (Ky. 1992) (citation omitted). “If no duty is owed by the defendant to the
plaintiff, there can be no breach thereof, and therefore no actionable
negligence.” Ashcraft v. Peoples Liberty Bank & Trust Co., Inc., 724 S.W.2d 228,
229 (Ky. App. 1986). Whether a duty exists is a question of law and is reviewed
de novo. Pathways, Inc. v. Hammons, 113 S.W.3d 85, 89 (Ky. 2003). “When a
court resolves a question of duty it is essentially making a policy determination.”
Mullins v. Commonwealth Life Ins. Co., 839 S.W.2d 245, 248 (Ky. 1992).
The trial court’s ruling concerning duty is somewhat unclear from the
record, both as to the exact nature of the duty owed and the basis for finding a
duty. The Court’s negligence instruction to the jury provided: “You will find for
Stella Shrout on her Negligence claim if you are satisfied from the evidence that
Defendants failed to use ordinary care regarding Ms. Shrout’s drug testing process
and that this failure was a substantial factor in the harm suffered by Ms. Shrout.”
Throughout trial, Shrout argued that appellants were negligent for
terminating Shrout’s employment based upon a faulty initial drug test instead of
using a more accurate confirmatory test. Shrout has not cited, and the Court has
not found, any Kentucky law imposing a duty on employers to drug test reasonably
in connection with terminating an employee. “[T]his Court will not recognize . . .
-6- a duty where no such duty has existed before in the Commonwealth.” Johnson v.
United Parcel Serv., Inc., 326 S.W.3d 812, 815 (Ky. App. 2010).
Other jurisdictions have explicitly declined to find a duty under the
same or similar circumstances. E.g., Mission Petroleum Carriers, Inc. v. Solomon,
106 S.W.3d 705, 716 (Tex. 2003) (“Just as we have consistently preserved the
doctrine of employment-at-will from encroachment by other liability theories, we
decline Solomon’s invitation to adopt a new theory of liability for negligent drug
testing.”); Bellinger v. Weight Watcher Gourmet Food Co., 756 N.E.2d 1251, 1257
(Ohio Ct. App. 2001) (“Weight Watchers owed no duty to appellant as to drug
testing as appellant was an employee-at-will. Weight Watchers could have
discharged appellant without even conducting drug tests.”); Baca v. Fisher Sand &
Gravel, Co., No. CV-09-0221-DJS-RHS, 2010 WL 11493830, at *7 (D.N.M.
2010) (interpreting New Mexico law) (“In this case, Plaintiffs Baca and Ulibarri do
not dispute they were at-will employees. Consequently, Fisher owed no duty to
Plaintiffs Baca and Ulibarri to conduct drug testing in any particular manner, and it
was entitled to discharge them whether they failed or passed the drug test or give
no reason at all for their termination.”).
Shrout makes several arguments in support of the trial court’s ruling,
none of which are persuasive. First, she focuses on appellants’ alleged negligent
conduct, without identifying any duty, which is the subject of the directed verdict
-7- motion and this appeal. As to duty, she cites a “universal duty of care” but
“Kentucky has never recognized a general ‘universal duty of care,’ that would
allow for new causes of action to arise that did not previously exist.” Johnson, 326
S.W.3d at 816.
She also argues that appellants assumed a duty to drug test her
reasonably based upon Custom Food’s drug testing policy. Shrout cites Estep v.
B.F. Saul Real Estate Investment Trust, 843 S.W.2d 911 (Ky. App. 1992), for the
“well-known rule that a duty voluntarily assumed cannot be carelessly undertaken
without incurring liability therefore.” Id. at 914. However, Kentucky has adopted
the Restatement (Second) of Torts § 324A (1965) “regarding the elements
necessary for liability for the breach of a voluntarily assumed duty.” Morgan v.
Scott, 291 S.W.3d 622, 632 (Ky. 2009). Under the facts of this case, “[w]e do not
find that [appellants] undertook to render any ‘services’ (as the term is
contemplated by the Restatement (Second) of Torts ) to [Shrout], and can find no
support in this jurisdiction or others for such a proposition.” Johnson, 326 S.W.3d
at 817. Without a duty, appellants cannot be liable for negligence. Therefore, they
were entitled to directed verdict as a matter of law.
Appellants were also entitled to a directed verdict on Shrout’s claim
for NIED. A party seeking to recover damages for emotional distress “must
present evidence of the recognized elements of a common law negligence claim[.]”
-8- Osborne v. Keeney, 399 S.W.3d 1, 17 (Ky. 2012). Because Shrout’s negligence
claim fails as a matter of law, her NIED claim likewise fails. Therefore, the trial
court erred in failing to direct a verdict in favor of appellants on Shrout’s NIED
claim.
Because we conclude the trial court should have entered a directed
verdict in favor of appellants, it is not necessary to address their other claims of
error.
Shrout has cross-appealed from the Bath Circuit Court judgment,
arguing the trial court erred: (1) in directing a verdict on her defamation claim; (2)
in directing a verdict on her wrongful use of an administrative proceeding claim;
(3) in incorrectly instructing the jury on her workers’ compensation retaliation
claim; and (4) in excluding a statement from a co-worker that he was going to be
fired for filing a workers’ compensation claim.
As to claims of error one and two,
[o]ur directed-verdict standard of review is well settled. First of all, when presented with a motion for directed verdict, a trial court must draw all fair and reasonable inferences from the evidence in favor of the party opposing the motion. As a reviewing court, we must ascribe to the evidence all reasonable inferences and deductions which support the claim of the prevailing party. . . . The judgment of the trial court in such matters will only be substituted when clearly erroneous. In the end, a trial court should only grant a directed verdict when there is a complete absence of proof on a material issue or if no disputed issues of fact exist upon which
-9- reasonable minds could differ.
Toler v. Süd-Chemie, Inc., 458 S.W.3d 276, 285 (Ky. 2014), as corrected (Apr. 7,
2015) (internal quotation marks and citations omitted).
Turning to the defamation claim, the requisite elements of defamation
are “(a) a false and defamatory statement concerning another; (b) an unprivileged
publication to a third party; (c) fault amounting at least to negligence on the part of
the publisher; and (d) either actionability of the statement irrespective of special
harm or the existence of special harm caused by the publication.” RESTATEMENT
(SECOND) OF TORTS § 558 Elements Stated (1977).
Here, because Shrout’s complaint only alleged defamation against
Balentine, only Balentine’s alleged defamatory statements are at issue. According
to Shrout, when Balentine called her into her office to discuss her drug test results,
Balentine told her that she “was so high on meth that she could not believe that of
me, that she ought to call the law and have me arrested.”4 Balentine made this
statement in the presence of Jeff Boggs and Karen Bailey, two of Custom Food’s
managers. Boggs had investigated the forklift incident and requested that Shrout
be drug tested and Bailey had accompanied Shrout to the testing center.
4 While Shrout suggests additional defamatory statements based upon employee statements to her concerning her negative drug test, we consider any argument based upon these alleged additional statements to be waived. While arguing the motion for directed verdict, Shrout conceded on the record that the only statements at issue were those Balentine made in her office in the presence of Jeff Boggs and Karen Bailey.
-10- Balentine tells the story differently. She testified that when Shrout
returned from the drug screen she was already very upset, crying, and yelling,
saying, “you’re not going to tell me these results.” When Balentine told her of the
positive drug test results, Shrout argued the results must be incorrect. Shrout
became angry and began cursing at Balentine. Balentine stated she was
uncomfortable with Shrout’s reaction and wanted Boggs and Bailey in the room.
She further stated that Boggs and Bailey had been part of the events of that day and
had informed her previously of some of the explanations for the positive drug test
Shrout had made on the return from the clinic.
The trial court determined that Balentine’s statements in the presence
of Boggs and Bailey were privileged. We agree. “The determination of the
existence of privilege is a matter of law.” Harstad v. Whiteman, 338 S.W.3d 804,
810 (Ky. App. 2011) (citation omitted). “Unflattering language made within the
scope of the employment relationship – and particularly ‘[i]n matters involving
communications between employees in the chain of command[,]’ – are qualifiedly
privileged, and ‘no recovery [for defamation] can be had.’” Fortney v. Guzman,
482 S.W.3d 784, 790 (Ky. App. 2015) (citations omitted). This is because “society
benefits when employers, or others who share common interests, are permitted to
discuss matters freely, even if those discussions are found to be based on erroneous
beliefs or misinformation.” Toler, 458 S.W.3d at 286.
-11- However, “[a] qualified privilege can be lost if abused or exceeded.”
Fortney, 482 S.W.3d at 790 (citation omitted). “The burden of showing such
abuse of privilege is the plaintiff’s.” Toler, 458 S.W.3d at 284. A plaintiff must
show both malice and falsity to overcome the qualified privilege. Id. at 287.
Abuse of the privilege may be shown by (1) “the publisher’s knowledge or reckless
disregard as to the falsity of the defamatory matter”; (2) the “publication of the
defamatory matter for some improper purpose”; (3) “excessive publication”; or (4)
“the publication of defamatory matter not reasonably believed to be necessary to
accomplish the purpose for which the occasion is privileged.” RESTATEMENT
(SECOND) OF TORTS § 596 Common Interest, cmt. a (1977).
Here, Shrout has presented no evidence that Balentine’s statements
were the result of malice. “With the qualified privilege, it is not so much what was
said as it is how it was said.” Toler, 458 S.W.3d at 284. Instead, Shrout’s
arguments pertain mainly to the falsity of Balentine’s statements. However, she
“was required to do more than assert that these statements were false; people are
sometimes wrong without even suspecting it.” Harstad, 338 S.W.3d at 813.
Adapting the words of the Harstad Court:
It was [Shrout]’s burden to present some evidence that would incline a reasonable person to believe that [Balentine]’s perception was not simply the product of mistaken observation, but the result of malice, i.e., some evidence that [Balentine] knew she was lying or making
-12- wholly unfounded statements without regard to their truth or falsity.
Id. Here, there is no such evidence. In fact, Shrout testified that she believed
Balentine thought she was on drugs and terminated her because of that actual, if
inaccurate, belief.
While Shrout is correct that “[t]he abuse-of-privilege question
typically is one for the jury,” Toler, 458 S.W.3d at 287, “a directed verdict is
appropriate where there is no evidence of probative value to support an opposite
result because [t]he jury may not be permitted to reach a verdict upon speculation
or conjecture.” Id. at 285 (internal quotation marks and citation omitted). Because
there was no evidence of malice, the trial court was not clearly erroneous in
granting Balentine’s motion for directed verdict on Shrout’s defamation claim.
Shrout next argues the trial court erred in granting a directed verdict
on her claim for wrongful use of administrative proceedings.5 We disagree. In
Martin, 507 S.W.3d at 11-12, our Supreme Court set forth the elements of a claim
for wrongful use of civil proceedings or malicious prosecution:
5 As an aside, we have serious doubts whether Shrout has stated a cognizable claim for wrongful use of civil proceedings. Also known as malicious prosecution, this claim requires proof, among other things, that “the defendant initiated, continued, or procured a criminal or civil judicial proceeding, or an administrative disciplinary proceeding against the plaintiff[.]” Martin v. O'Daniel, 507 S.W.3d 1, 11 (Ky. 2016). Unemployment proceedings are not an “administrative disciplinary proceeding against the plaintiff.” At least one court has declined to recognize such a claim under similar facts. See Wilkinson v. Shoney’s, Inc., 4 P.3d 1149, 1159 (Kan. 2000) (declining to recognize cause of action for malicious defense based upon an employer’s challenge of a claim for unemployment compensation benefits).
-13- A malicious prosecution action may be established by showing that:
1) the defendant initiated, continued, or procured a criminal or civil judicial proceeding, or an administrative disciplinary proceeding against the plaintiff;
2) the defendant acted without probable cause;
3) the defendant acted with malice, which, in the criminal context, means seeking to achieve a purpose other than bringing an offender to justice; and in the civil context, means seeking to achieve a purpose other than the proper adjudication of the claim upon which the underlying proceeding was based;
4) the proceeding, except in ex parte civil actions, terminated in favor of the person against whom it was brought; and
5) the plaintiff suffered damages as a result of the proceeding.
The trial court directed a verdict in favor of appellants, finding there
was no evidence any action by appellants “continued” the proceedings. It
specifically noted the lack of evidence from the Kentucky Division of
Unemployment Insurance (“Division”) showing that any action by appellants
influenced its decision respecting Shrout’s benefits. Shrout argues on appeal, as
she did below, that Custom Food’s submissions to the Division concerning her
termination effectively “continued” the unemployment proceedings against her,
delaying her benefits. She specifically points to the fact that Balentine had in the
-14- past entered into settlement agreements with employees to not challenge their
receipt of benefits, which she argues shows that Balentine (and thus Custom Food)
was aware that responding to the Division’s request for information would delay or
prevent the receipt of benefits.
We agree with the trial court that Shrout failed to present evidence
concerning this element of her wrongful use of civil proceedings claim. There is
no evidence in the record that Custom Food’s submissions to the Division delayed
or affected its decision concerning Shrout’s benefits in any way. Shrout seems to
believe that if Custom Food had not responded to the Division’s requests for
information concerning Shrout’s termination she would have automatically
qualified for benefits. However, “[n]o Kentucky authority stands for the
proposition that if an employer fails to contest a worker’s claim for unemployment
benefits, the worker must be awarded unemployment benefits.” Kentucky
Unemployment Ins. Comm’n v. Watts, 407 S.W.3d 569, 574-75 (Ky. App. 2013).
Further, Shrout’s own submissions to the Division contain
substantially the same information as Custom Food’s. Thus, without further
evidence, she cannot prove that it was Custom Food’s action, as opposed to her
own, that continued the proceeding. As noted above, “a directed verdict is
appropriate where there is no evidence of probative value to support an opposite
result because [t]he jury may not be permitted to reach a verdict upon speculation
-15- or conjecture.” Toler, 458 S.W.3d at 285 (Ky. 2014) (internal quotation marks and
citation omitted). Without evidence that appellants continued the unemployment
proceeding, Shrout could not prove an essential element of her claim and directed
verdict was proper.
Next, Shrout alleges the trial court’s instruction on her workers’
compensation retaliation claim misled the jury into believing she had to prove she
was pursuing a workers’ compensation claim prior to being terminated, rather than
simply intending to pursue such. We review alleged errors in jury instructions de
novo. Lawson v. Commonwealth, 425 S.W.3d 912, 915 (Ky. App. 2014) (citations
omitted). The trial court’s instruction provided in relevant part:
You will find for Stella Shrout on her Workers’ Compensation Retaliation claim if you are satisfied from the evidence that: Plaintiff was pursuing a Workers’ Compensation claim at the time she was terminated . . . [and] Plaintiff’s pursuit of a Workers’ Compensation claim was a substantial and motivative factor in Defendants’ decision to discharge Stella Shrout.
Shrout now contends the trial court’s instruction should have stated
that Shrout “intended to file and pursue” a workers’ compensation claim, citing
First Prop. Management Corporation v. Zarebidaki, 867 S.W.2d 185 (Ky. 1993).
We find Shrout’s argument is not preserved for appellate review because Shrout
never argued the suggested language to the trial court; neither is it located in her
-16- tendered instructions. See CR6 51(3); Sand Hill Energy, Inc. v. Smith, 142 S.W.3d
153, 163 (Ky. 2004) (citation omitted) (noting that an allegation of instructional
error is not preserved for appellate review when “the omitted language or
instruction was not contained in the instruction tendered to the trial court; i.e.,
when the allegation of error was not presented to the trial court at all[.]”).
Finally, Shrout argues the trial court erred in excluding a co-worker’s
statement to her that he was going to be fired for pursuing a workers’
compensation claim. Shrout argues this evidence is relevant to her state of mind
concerning why she was afraid to file a workers’ compensation claim. A trial
court’s evidentiary rulings are reviewed for abuse of discretion. Goodyear Tire &
Rubber Co. v. Thompson, 11 S.W.3d 575, 577 (Ky. 2000) (citations omitted).
At trial, Shrout attempted to testify that a co-worker, Ernie Anderson,
told her he was going to be fired for filing a workers’ compensation claim.
Appellants objected that the testimony was inadmissible hearsay and Shrout
countered that the statement went to her state of mind. The trial court excluded the
statement stating, “if he’s not going to be a witness, I’m going to sustain the
6 Kentucky Rules of Civil Procedure.
-17- objection.” We interpret the trial court’s ruling as holding the statement was
hearsay7 and find no error in excluding it.
Hearsay evidence is not admissible unless it qualifies for
an exception. KRE8 802. While Shrout argues the statement goes to her state of
mind, “KRE 803(3), by its very language, only applies to prove the state of mind
of the declarant[.]” Moseley v. Commonwealth, 960 S.W.2d 460, 462 (Ky. 1997).
For the foregoing reasons, the judgment of the Bath Circuit Court is
reversed as to the appeal and affirmed as to the cross-appeal, with directions for the
trial court to set aside the jury verdict and enter a new judgment in favor of Custom
Food.
ALL CONCUR.
BRIEFS FOR APPELLANTS/ BRIEFS FOR APPELLEE/CROSS- CROSS-APPELLEES: APPELLANT:
Jacinta F. Porter Laraclay Parker Keith Moorman J. Dale Golden Lexington, Kentucky Alexandra DeMoss-Campbell Lexington, Kentucky
7 Prior to trial, the court granted appellants’ general motion in limine to exclude evidence of other Custom Food employees allegedly being terminated for workers’ compensation retaliation based upon Shrout’s lack of personal knowledge. 8 Kentucky Rules of Evidence.
-18-