RENDERED: JANUARY 13, 2023; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2022-CA-0462-MR
JEREMY DOTSON APPELLANT
APPEAL FROM WOODFORD CIRCUIT COURT v. HONORABLE ROBERT W. MCGINNIS, SPECIAL JUDGE ACTION NO. 16-CI-00058
VERSAILLES FARM HOME & GARDEN APPELLEE
OPINION AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
** ** ** ** **
BEFORE: THOMPSON, CHIEF JUDGE; CALDWELL AND GOODWINE, JUDGES.
THOMPSON, CHIEF JUDGE: Jeremy Dotson appeals from an order of the
Woodford Circuit Court which dismissed Count 2 of his counterclaim. Appellant
argues that the claim should not have been dismissed. We affirm in part, reverse in
part, and remand. FACTS AND PROCEDURAL HISTORY
On March 9, 2016, Versailles Farm Home & Garden filed a complaint
against Appellant to collect a balance owed by him on a charge account with
Appellee. The amount alleged owed was $15,144. On April 12, 2016, Appellant
filed an answer and counterclaims.1 Appellant admitted that he had made no
payments toward the debt owed, but claimed that Appellee owed him certain
amounts that should be used to offset the recovery amount.
One of the counterclaims revolved around Appellant’s personal
vehicle. Appellant began working for Appellee in January of 2013.2 During the
period of his employment, Appellant allowed Appellee to use his personal truck to
tow heavy equipment. Appellant alleged that Appellee’s owner, Jim Gibbs, agreed
to pay for any damage done to the vehicle during the scope of it being used by
Appellee or its employees. In November or December of 2013, employees of
Appellee allegedly used the truck in a negligent manner and caused significant
damage to the truck’s engine. Appellant spent over $4,000 to repair the truck.
Appellee did not reimburse Appellant for the repair costs.
On May 25, 2016, Appellee filed a motion for judgment on the
pleadings arguing that the counterclaim revolving around the truck damages should
1 Appellant raised two counterclaims; however, only one is at issue in this case. 2 Appellant’s employment with Appellee lasted about a year.
-2- be dismissed because it was time-barred pursuant to Kentucky Revised Statutes
(KRS) 413.125. KRS 413.125 states that actions for the damage to personal
property must be brought within two years from the time the cause of action
accrues. Appellee argued that it had been over two years since the truck was
damaged. Appellant argued that KRS 413.120 was the applicable statute of
limitations. KRS 413.120(1) states that claims regarding oral contracts must be
brought within five years. Appellant claimed that Appellee’s agreement to pay for
any work-related damages to the truck was an oral contract. Appellant also argued
that this claim was an offsetting claim; therefore, it was not subject to a statute of
limitations defense. The trial court denied the motion for judgment on the
pleadings at that time because it believed Appellant had pled sufficient facts to
support a finding of an implied oral contract regarding the repair of the truck.
There was little movement in the case for the next several years. On
January 27, 2022, Appellee moved for summary judgment as to the same
counterclaim. Appellee again claimed that the two-year statute of limitations was
the proper statute. Appellee also argued that the counterclaim was not an
offsetting claim because it did not grow out of the charge account debt. Appellant
responded by arguing that the five-year statute of limitations was applicable and
the claim could not be barred by any statute of limitations because it was an
offsetting claim.
-3- On March 21, 2022, the trial court entered an order which held that
the two-year statute of limitations applied; therefore, Appellant’s counterclaim
regarding his truck repairs was barred. That claim was dismissed with prejudice.
One month later, the trial court made the March 21 order final and appealable.
This appeal followed.
ANALYSIS
Appellant’s first argument on appeal is that the KRS 413.120(1) five-
year limitation period applies in this case and not the KRS 413.125 two-year
limitation period. “Whether an action is barred by the statute of limitations is a
question of law to be decided by the courts[.]” Cuppy v. General Acc. Fire & Life
Assur. Corp., 378 S.W.2d 629, 631 (Ky. 1964). We review questions of law de
novo. Commonwealth v. Long, 118 S.W.3d 178, 181 (Ky. App. 2003).
Here we have a cause of action that could ostensibly apply to both
limitation periods. Appellant claims that he and Appellee had an agreement that
Appellee would pay for any work-related damage to his vehicle. This would seem
to fit within the five-year limitation period for oral agreements. On the other hand,
the underlying issue is that his vehicle was damaged, which would seem to fit
within the two-year limitation period for damage to personal property.
-4- We agree with the trial court that the two-year limitation period found
in KRS 413.125 applies. We believe that the case of Carr v. Texas Eastern
Transmission Corporation, 344 S.W.2d 619 (Ky. 1961), is directly on point.
On November 23, 1956, Texas Eastern Transmission Corporation, an interstate pipe-line company, entered into an easement agreement with the owners of the land on which appellant, James C. Carr, as a tenant, was grazing 161 head of cattle. [Appellant], Carr, was also a party to the easement agreement, with the result that he stands on the same footing as the owners of the land in respect to any violation of its terms. The agreement recites, in part, that appellee ‘. . . will not damage any buildings or ponds or other property off the right-of-way easement.’
On May 23, 1959, appellant filed his action seeking recovery under the quoted clause of the contract for damages in the sum of $2,500 allegedly caused to his cattle. He averred that appellee in constructing its pipe line in August of 1957 across the lands of his landlords ‘made weird and strange noises’ that caused his cattle to run and stampede and to become scared and nervous so that they refused to eat and, as a result, they lost weight and quality.
Id. at 620.
Carr’s cause of action was dismissed by the trial court based on a
statute of limitations. KRS 413.140(1)(b) states that a cause of action against a
corporation based on the injury to livestock must be brought within one year. The
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RENDERED: JANUARY 13, 2023; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2022-CA-0462-MR
JEREMY DOTSON APPELLANT
APPEAL FROM WOODFORD CIRCUIT COURT v. HONORABLE ROBERT W. MCGINNIS, SPECIAL JUDGE ACTION NO. 16-CI-00058
VERSAILLES FARM HOME & GARDEN APPELLEE
OPINION AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
** ** ** ** **
BEFORE: THOMPSON, CHIEF JUDGE; CALDWELL AND GOODWINE, JUDGES.
THOMPSON, CHIEF JUDGE: Jeremy Dotson appeals from an order of the
Woodford Circuit Court which dismissed Count 2 of his counterclaim. Appellant
argues that the claim should not have been dismissed. We affirm in part, reverse in
part, and remand. FACTS AND PROCEDURAL HISTORY
On March 9, 2016, Versailles Farm Home & Garden filed a complaint
against Appellant to collect a balance owed by him on a charge account with
Appellee. The amount alleged owed was $15,144. On April 12, 2016, Appellant
filed an answer and counterclaims.1 Appellant admitted that he had made no
payments toward the debt owed, but claimed that Appellee owed him certain
amounts that should be used to offset the recovery amount.
One of the counterclaims revolved around Appellant’s personal
vehicle. Appellant began working for Appellee in January of 2013.2 During the
period of his employment, Appellant allowed Appellee to use his personal truck to
tow heavy equipment. Appellant alleged that Appellee’s owner, Jim Gibbs, agreed
to pay for any damage done to the vehicle during the scope of it being used by
Appellee or its employees. In November or December of 2013, employees of
Appellee allegedly used the truck in a negligent manner and caused significant
damage to the truck’s engine. Appellant spent over $4,000 to repair the truck.
Appellee did not reimburse Appellant for the repair costs.
On May 25, 2016, Appellee filed a motion for judgment on the
pleadings arguing that the counterclaim revolving around the truck damages should
1 Appellant raised two counterclaims; however, only one is at issue in this case. 2 Appellant’s employment with Appellee lasted about a year.
-2- be dismissed because it was time-barred pursuant to Kentucky Revised Statutes
(KRS) 413.125. KRS 413.125 states that actions for the damage to personal
property must be brought within two years from the time the cause of action
accrues. Appellee argued that it had been over two years since the truck was
damaged. Appellant argued that KRS 413.120 was the applicable statute of
limitations. KRS 413.120(1) states that claims regarding oral contracts must be
brought within five years. Appellant claimed that Appellee’s agreement to pay for
any work-related damages to the truck was an oral contract. Appellant also argued
that this claim was an offsetting claim; therefore, it was not subject to a statute of
limitations defense. The trial court denied the motion for judgment on the
pleadings at that time because it believed Appellant had pled sufficient facts to
support a finding of an implied oral contract regarding the repair of the truck.
There was little movement in the case for the next several years. On
January 27, 2022, Appellee moved for summary judgment as to the same
counterclaim. Appellee again claimed that the two-year statute of limitations was
the proper statute. Appellee also argued that the counterclaim was not an
offsetting claim because it did not grow out of the charge account debt. Appellant
responded by arguing that the five-year statute of limitations was applicable and
the claim could not be barred by any statute of limitations because it was an
offsetting claim.
-3- On March 21, 2022, the trial court entered an order which held that
the two-year statute of limitations applied; therefore, Appellant’s counterclaim
regarding his truck repairs was barred. That claim was dismissed with prejudice.
One month later, the trial court made the March 21 order final and appealable.
This appeal followed.
ANALYSIS
Appellant’s first argument on appeal is that the KRS 413.120(1) five-
year limitation period applies in this case and not the KRS 413.125 two-year
limitation period. “Whether an action is barred by the statute of limitations is a
question of law to be decided by the courts[.]” Cuppy v. General Acc. Fire & Life
Assur. Corp., 378 S.W.2d 629, 631 (Ky. 1964). We review questions of law de
novo. Commonwealth v. Long, 118 S.W.3d 178, 181 (Ky. App. 2003).
Here we have a cause of action that could ostensibly apply to both
limitation periods. Appellant claims that he and Appellee had an agreement that
Appellee would pay for any work-related damage to his vehicle. This would seem
to fit within the five-year limitation period for oral agreements. On the other hand,
the underlying issue is that his vehicle was damaged, which would seem to fit
within the two-year limitation period for damage to personal property.
-4- We agree with the trial court that the two-year limitation period found
in KRS 413.125 applies. We believe that the case of Carr v. Texas Eastern
Transmission Corporation, 344 S.W.2d 619 (Ky. 1961), is directly on point.
On November 23, 1956, Texas Eastern Transmission Corporation, an interstate pipe-line company, entered into an easement agreement with the owners of the land on which appellant, James C. Carr, as a tenant, was grazing 161 head of cattle. [Appellant], Carr, was also a party to the easement agreement, with the result that he stands on the same footing as the owners of the land in respect to any violation of its terms. The agreement recites, in part, that appellee ‘. . . will not damage any buildings or ponds or other property off the right-of-way easement.’
On May 23, 1959, appellant filed his action seeking recovery under the quoted clause of the contract for damages in the sum of $2,500 allegedly caused to his cattle. He averred that appellee in constructing its pipe line in August of 1957 across the lands of his landlords ‘made weird and strange noises’ that caused his cattle to run and stampede and to become scared and nervous so that they refused to eat and, as a result, they lost weight and quality.
Id. at 620.
Carr’s cause of action was dismissed by the trial court based on a
statute of limitations. KRS 413.140(1)(b) states that a cause of action against a
corporation based on the injury to livestock must be brought within one year. The
trial court held that because Carr failed to file his cause of action in time, it should
be dismissed. Carr appealed and argued that his cause of action was for a breach
-5- of contract which would be controlled by the fifteen-year statute of limitations
found in KRS 413.090(2). The Court held that
[t]he rule . . . is that it is the object rather than the form of the action which controls in determining the limitation period. The form in the case at bar may derive indirectly from a contract but the object of the action is to recover for alleged injuries . . . to cattle.
Carr, 344 S.W.2d at 620 (emphasis in original).
This holding is determinative of this case. Appellant’s counterclaim
may indirectly stem from an oral agreement, but the object of his cause of action is
to recover for damages to his vehicle; therefore, the two-year statute of limitations
found in KRS 413.125 applies. The trial court did not err in its holding.
Appellant also argues that his truck-related counterclaim should not
have been dismissed because it is an offsetting claim. Appellant is correct that, in
some instances, an offsetting claim can still move forward even when it violates a
statute of limitations.
The statute of limitation is intended to close the door of the courts to the bringing of suits on stale claims. It is intended to be used as a blanket to smother any faint respiration of moribund claims of plaintiffs in regular causes of action or those of defendants asserted by counterclaims. Limitation law is not intended to bar nor smother any mere defense of a party so as to compel him to stand dumb and mute while his antagonist bludgeons his head with every weapon in the book of legal, offensive warfare. For, so long as the courts will hear a plaintiff’s cause of action, they will also hear a [defendant’s] retort of vindication for the attitude he has
-6- assumed, provided always that the cause of action and the asserted defense are closely and [logically] related in a sort of legal affinity.
The purpose of statutes of limitations is to bar actions rather than to suppress defenses. Such statutes, as a general rule, are not applicable to defenses but are only applicable against assertions of affirmative relief. Thus, so long as the courts will hear the plaintiff’s case, time will not bar the defense which might be urged thereto and which grew out of the transaction connected with the plaintiff’s claim.
Liter v. Hoagland, 305 Ky. 329, 332, 204 S.W.2d 219, 220 (1947) (emphasis in
original) (citations omitted). In other words, counterclaims “connected with and
growing out of the matter that was the basis of the suit” cannot be barred by a
statute of limitations. Luscher v. Security Tr. Co., 178 Ky. 593, 199 S.W. 613, 614
(1918). If the two matters are “separate and distinct,” then the statute of
limitations will still apply. Id.
Appellant argues that the charge account debt and damages to his
truck arose out of his employment relationship with Appellee; therefore, the statute
of limitations does not bar this offsetting claim. Appellant claims that he allowed
Appellee to use his truck during his employment and that he was allowed to
maintain a charge account with Appellee as part of his employment. Appellee
argues that it is simply trying to collect on a debt and that its lawsuit has nothing to
do with Appellant’s previous employment. Appellee also claims that Appellant
has had a charge account with it since the 1990s, long before Appellant’s
-7- employment with Appellee, and there is documented evidence in the record to
support this claim.
When examining this issue, we must keep in mind the summary
judgment standard of review.
The standard of review on appeal of a summary judgment is whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law. . . . “The record must be viewed in a light most favorable to the party opposing the motion for summary judgment and all doubts are to be resolved in his favor.” Summary “judgment is only proper where the movant shows that the adverse party could not prevail under any circumstances.” Consequently, summary judgment must be granted “[o]nly when it appears impossible for the nonmoving party to produce evidence at trial warranting a judgment in his favor[.]”
Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996) (citations omitted).
“Because summary judgment involves only legal questions and the existence of
any disputed material issues of fact, an appellate court need not defer to the trial
court’s decision and will review the issue de novo.” Lewis v. B & R Corporation,
56 S.W.3d 432, 436 (Ky. App. 2001).
Here, Appellant alleges that his use of the charge account was part of
his employment agreement with Appellee. Appellee disputes this. This is a
genuine issue of material fact. If the use of the charge account was a term of
Appellant’s employment, then it would be directly related to Appellee’s use of
-8- Appellant’s vehicle. Both would be terms of his employment and connected. The
truck-related counterclaim would then be a proper offsetting claim and would not
be barred by the two-year limitation period.
CONCLUSION
Based on the foregoing, we affirm in part, reverse in part, and remand.
We affirm the trial court’s judgment that the two-year statute of limitations applies
to the truck-related counterclaim; however, we believe the court erred in granting
summary judgment. There is still a genuine issue of material fact regarding
whether Appellant’s use of the charge account was a term of his employment. If it
was, then the counterclaim at issue in this appeal would be a proper offsetting
claim as it too was related to his employment, and the two-year limitation period
would not apply. We reverse the dismissal of Appellant’s counterclaim and
remand for additional proceedings.
ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
Shelby C. Kinkead, Jr. Cassie W. Barnes Lexington, Kentucky Versailles, Kentucky
-9-