James Dustin Chaney v. Cvs Pharmacy, Inc.

Court of Appeals of Kentucky·Decided April 24, 2026·No. 2024-CA-0962·Published

Opinion

RENDERED: APRIL 24, 2026; 10:00 A.M.

TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2024-CA-0798-MR

CVS PHARMACY, INC. APPELLANT

APPEAL FROM PERRY CIRCUIT COURT v. HONORABLE ALISON C. WELLS, JUDGE ACTION NO. 15-CI-00115

JAMES DUSTIN CHANEY, D.O. AND RITE AID OF KENTUCKY, INC. APPELLEES

AND

NO. 2024-CA-0962-MR

JAMES DUSTIN CHANEY CROSS-APPELLANT

CROSS-APPEAL FROM PERRY CIRCUIT COURT v. HONORABLE ALISON C. WELLS, JUDGE ACTION NO. 15-CI-00115

CVS PHARMACY, INC. CROSS-APPELLEE

OPINION

REVERSING AND REMANDING

AS TO APPEAL NO. 2024-CA-0798-MR AND DISMISSING

AS TO CROSS-APPEAL NO. 2024-CA-0962-MR

** ** ** ** **

BEFORE: CETRULO, L. JONES, AND MCNEILL, JUDGES. MCNEILL, JUDGE: Following a jury trial in which the jury found in favor of James Dustin Chaney, D.O. (“Chaney”) on his negligence and false light claims against CVS Pharmacy, Inc. (“CVS”), the Perry Circuit Court entered a judgment against CVS in the amount of $7,560,000.00, which was later reduced to $2,160,000.00. CVS appeals, arguing it was entitled to a directed verdict on Chaney’s claims. Chaney cross-appeals the reduction of his damage award. Because we find that the trial court erred in denying CVS’s motion for a directed verdict, we reverse the circuit court’s judgment and dismiss Chaney’s cross-appeal as moot.

BACKGROUND

Chaney is a former practicing physician from Eastern Kentucky. In 2011, the Kentucky Board of Medical Licensure (“KBML”) began investigating Chaney’s prescribing habits for controlled substances. Based upon Chaney’s

KASPER1 data, KBML pharmacy consultant Chris Johnson identified sixteen of Chaney’s patients based on “age, addictive drug combinations, distance traveled to the pharmacy, polypharmacy, duplicate refills, and similar last names” and recommended further investigation by the KBML. A physician consultant reviewed the sixteen patient charts and found that Chaney’s care fell below the acceptable standard in eleven charts regarding diagnosis, in ten regarding treatment, and in four regarding recordkeeping. The consultant also found that Chaney had demonstrated gross negligence in ten of the patient charts reviewed. On December 12, 2012, the KBML and Chaney entered into an agreed order, which found that Chaney had violated KRS2 311.595 and KRS 311.597 and required, among other things, that Chaney keep a controlled substances log and complete further training on prescribing controlled substances.

Contemporaneous with the KBML investigation, state and federal law enforcement were looking into Chaney’s pain management clinic, Clarion. In 2015, Chaney was federally indicted on multiple charges in connection with his ownership of Clarion, including conspiracy to distribute and dispense controlled substances unlawfully. Ultimately, Chaney pled guilty to one count of conspiracy

1 The Kentucky All Schedule Prescription Electronic Reporting (“KASPER”) System is an electronic system established by Kentucky Revised Statutes (“KRS”) 218A.202 to monitor prescriptions of controlled substances. 2 Kentucky Revised Statutes.

to commit money laundering and was sentenced to thirty months in federal prison. Based upon his conviction, Chaney agreed to surrender his medical license in lieu of revocation.

Amid the federal prosecution, Chaney learned that CVS had filled prescriptions under his Drug Enforcement Administration (“DEA”) number that he did not write. Chaney contacted CVS and requested that they perform an audit of all prescriptions written by Chaney and two other physicians with the same last name, James “Ace” Chaney (Chaney’s uncle), and George Chaney (apparently unrelated). As a result of their investigation, CVS identified 101 prescriptions that had been falsely attributed to Chaney in KASPER.

In March of 2015, Chaney filed a lawsuit against CVS in Perry Circuit Court, alleging that CVS was negligent in misattributing prescriptions to Chaney written by other medical providers and then reporting those misattributions to KASPER.3 The lawsuit further alleged that CVS’s negligence caused Chaney to be investigated by the KBML and state and federal authorities, to be indicted, and to lose his license. An amended complaint later added a false light claim. Chaney sought damages for emotional pain and suffering and impairment of his ability to earn income.

3 The lawsuit also named Rite Aid, local pharmacy R/X Discount Co., several CVS and Rite Aid pharmacists, and some John Does.

Following a jury trial, the jury found in Chaney’s favor and awarded $7,560,000.00 in damages, which was later reduced to $2,160,000.00. This appeal and cross-appeal followed.

STANDARD OF REVIEW

CVS argues the trial court erred in denying their motion for a directed verdict on Chaney’s negligence and false light claims. “Upon review of the evidence supporting a judgment entered upon a jury verdict, the role of an appellate court is limited to determining whether the trial court erred in failing to grant the motion for directed verdict.” Lewis v. Bledsoe Surface Min. Co., 798 S.W.2d 459, 461 (Ky. 1990). A motion for directed verdict “raises only questions of law as to whether there is any evidence to support a verdict.” Harris v. Cozatt, Inc., 427 S.W.2d 574, 575 (Ky. 1968) (emphasis added). “[A] trial judge cannot enter a directed verdict unless there is a complete absence of proof on a material issue or if no disputed issues of fact exist upon which reasonable minds could differ.” Bierman v. Klapheke, 967 S.W.2d 16, 18–19 (Ky. 1998) (citation omitted).

“All evidence which favors the prevailing party must be taken as true and . . . [t]he prevailing party is entitled to all reasonable inferences which may be drawn from the evidence.” Lewis, 798 S.W.2d at 461. “[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.” Toler v. Süd–Chemie, Inc., 458 S.W.3d 276, 285 (Ky. 2014), as corrected (Apr. 7, 2015) (internal quotation marks and citation omitted). Finally, “[a]ppellate review of the trial court’s denial of a motion for directed verdict is not limited to evaluating the reasons proffered by the trial court for its denial.” Louisville Metro Government v. Ward, 610 S.W.3d 295, 307 (Ky. App. 2020). “Rather, we must make our own review of the entire record to determine whether the trial court’s ruling was clearly erroneous.” Brooks v. Lexington-Fayette Urban Cnty. Housing Auth., 132 S.W.3d 790, 798 (Ky. 2004).

ANALYSIS

As to Chaney’s negligence claim, CVS contends it was entitled to a directed verdict because Chaney failed to prove that its negligence was the cause of his injuries. “The elements of a negligence claim are (1) a legally-cognizable duty, (2) a breach of that duty, (3) causation linking the breach to an injury, and (4) damages.” Patton v. Bickford, 529 S.W.3d 717, 729 (Ky. 2016) (citation omitted). “The absence of proof on any one of the required elements is fatal to a negligence claim.” Keaton v. G.C. Williams Funeral Home, Inc., 436 S.W.3d 538, 542 (Ky. App. 2013) (citing M & T Chemicals, Inc. v. Westrick, 525 S.W.2d 740, 741 (Ky. 1974)).

Traditionally, “causation [has] consist[ed] of two distinct components:

‘but-for’ causation, also referred to as causation in fact, and proximate causation.” Patton, 529 S.W.3d at 730. “But-for causation requires the existence of a direct, distinct, and identifiable nexus between the defendant’s breach of duty (negligence) and the plaintiff’s damages such that the event would not have occurred ‘but for’ the defendant’s negligent or wrongful conduct in breach of a duty.” Id. “An act or omission is not regarded as a cause of an event if the particular event would have occurred without it.” Id. (quoting Gross v. FBL Financial Services, Inc., 557 U.S. 167, 176–77 (2009)).

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