John Byrnes v. Kentucky Farm Bureau Insurance Company

• Court: Court of Appeals of Kentucky
• Decided: April 22, 2021
• Docket: 2019 CA 001790
• Status: Unknown

Opinion

RENDERED: APRIL 23, 2021; 10:00 A.M. NOT TO BE PUBLISHED

Commonwealth of Kentucky Court of Appeals NO. 2019-CA-1790-MR

JOHN BYRNES APPELLANT

APPEAL FROM JEFFERSON CIRCUIT COURT v. HONORABLE BARRY WILLETT, JUDGE ACTION NO. 19-CI-001454

KENTUCKY FARM BUREAU APPELLEE INSURANCE COMPANY

OPINION AND ORDER VACATING AND REMANDING

** ** ** ** **

BEFORE: JONES, MAZE, AND TAYLOR, JUDGES.

TAYLOR, JUDGE: John Byrnes brings this appeal from a November 1, 2019,

Final Judgment of the Jefferson Circuit Court determining that Byrnes was not

entitled to attorney’s fees pursuant to Kentucky Revised Statutes (KRS) 304.39-

070(5). We vacate and remand. MOTION TO STRIKE BYRNES’ BRIEF

Before addressing the merits of the appeal, pending before this Court

is Kentucky Farm Bureau Insurance Company’s (Kentucky Farm Bureau) motion

to strike Byrnes’ appellate brief. By order entered July 29, 2020, a motion panel of

this Court granted Byrnes’ motion for additional time to file his brief and further

passed Kentucky Farm Bureau’s motion to strike Byrnes’ brief to the merits panel

that was ultimately assigned this case. No response to the motion to strike was

filed.

The primary argument presented by Kentucky Farm Bureau is that

Byrnes’ brief fails to comply with Kentucky Rules of Civil Procedure (CR) 76.12.

The argument is well taken. More specifically, Byrnes’ brief completely fails to

comply with CR 76.12(4)(c). First, Byrnes’ brief fails to comply with CR

76.12(4)(c)(iv):

A “STATEMENT OF THE CASE” consisting of a chronological summary of the facts and procedural events necessary to an understanding of the issues presented by the appeal, with ample references to the specific pages of the record, or tape and digital counter number in the case of untranscribed videotape or audiotape recordings, or date and time in the case of all other untranscribed electronic recordings, supporting each of the statements narrated in the summary.

CR 76.12(4)(c)(iv) (emphasis added); see Commonwealth v. Roth, 567 S.W.3d

591, 593 (Ky. 2019). Byrnes’ statement of the case contains a one-sentence

-2- paragraph which does nothing more than outline the underlying legal issue on

appeal. The brief sets out no factual premise or procedural events and makes no

reference to the record whatsoever.

Second, and equally noncompliant, Byrnes’ brief does not comply

with CR 76.12(4)(c)(v):

An “ARGUMENT” conforming to the statement of Points and Authorities, with ample supportive references to the record and citations of authority pertinent to each issue of law and which shall contain at the beginning of the argument a statement with reference to the record showing whether the issue was properly preserved for review and, if so, in what manner.

CR 76.12(4)(c)(v) (emphasis added). Byrnes’ argument does not contain any

supportive references to the record on appeal nor any statements showing how the

issue below was properly preserved for review.

The rules of appellate procedure are “critical” to effective appellate

review and substantial compliance is mandatory. Oakley v. Oakley, 391 S.W.3d

377, 380-81 (Ky. App. 2012). And, it is not this Court’s duty to scour the record

on appeal to ensure that issues have been properly preserved for our review.

Koester v. Koester, 569 S.W.3d 412, 414-15 (Ky. App. 2019). Compliance with

CR 76.12(4)(c)(v) is a substantial requirement of appellate practice in Kentucky.

Elwell v. Stone, 799 S.W.2d 46, 47 (Ky. App. 1990).

-3- As this Court stated in Hallis v. Hallis, 328 S.W.3d 694 (Ky. App.

2010):

It is a dangerous precedent to permit appellate advocates to ignore procedural rules. Procedural rules “do not exist for the mere sake of form and style. They are lights and buoys to mark the channels of safe passage and assure an expeditious voyage to the right destination. Their importance simply cannot be disdained or denigrated.

....

Compliance with this rule permits a meaningful and efficient review by directing the reviewing court to the most important aspects of the appeal: what facts are important and where they can be found in the record[.]

Id. at 696 (citations omitted).

This Court has three options when a party fails to comply with the

substantial requirements of CR 76.12: ignore the deficiency, strike the brief in

whole or in part, or review only for manifest injustice. Hallis, 328 S.W.3d at 696;

see also CR 76.12(8)(a). Given the singular legal issue presented as well the

meager record on appeal, we decline to strike Byrnes’ brief. Rather, we will

consider the appeal on its merits with the admonition to Byrnes’ counsel that future

noncompliance will not be tolerated. We note that Byrnes, who is also an attorney,

has at least two other pending appeals in this Court with the identical legal issue

raised in this appeal. Failure of counsel to comply with CR 76.12 in those appeals

-4- will likely result in having Byrnes’ briefs being stricken and the appeals

dismissed.1

BACKGROUND

Byrnes was retained as attorney to represent Jorge Frontela Machin,

Luis Gutierres, and Marisleydi Miranda in relation to a motor vehicle accident that

occurred on January 20, 2016. It appears that Machin, Gutierres, and Miranda

were insured by Kentucky Farm Bureau Insurance Company (Kentucky Farm

Bureau) and received Basic Reparations Benefits (BRB) from Kentucky Farm

Bureau.

By letter dated April 13, 2016, Kentucky Farm Bureau informed

Byrnes that it would “pursue its own [Personal Injury Protection] PIP [BRB]

subrogation.” In conformity therewith, Kentucky Farm Bureau filed an arbitration

proceeding to enforce its subrogation rights under KRS 304.39-070(3) against the

alleged tortfeasor’s insurance company.

Byrnes eventually secured a settlement from the alleged tortfeasor’s

insurance carrier, and Kentucky Farm Bureau obtained reimbursement for BRB in

the arbitration proceeding. Byrnes then requested Kentucky Farm Bureau pay

attorney’s fees pursuant to KRS 304.39-070(5) based upon the recovery of BRB.

1 We caution counsel for attorney John Byrnes that other panels of this Court may not be as willing to consider the merits of the appeal upon noncompliance with appellate rules.

-5- Kentucky Farm Bureau refused the request and stated it was not legally obligated

to pay such a fee to Byrnes.

As a result, Byrnes filed a complaint, as amended, in the Jefferson

Circuit Court against Kentucky Farm Bureau.2 Byrnes claimed that Kentucky

Farm Bureau improperly failed to pay the mandated statutory attorney’s fees under

KRS 304.39-070(5). Byrnes sought recoupment of the appropriate fee and

punitive damages for bad faith on behalf of Kentucky Farm Bureau.

Kentucky Farm Bureau answered the original complaint and

subsequently filed a motion for judgment upon the pleadings after the amended

complaint was filed. CR 12.03. In the motion, Kentucky Farm Bureau stated that

it did not hire Byrnes, and he did not represent its subrogation interests. In

particular, Kentucky Farm Bureau maintained that Byrnes did not confer a benefit

upon the insurance company and that he was not entitled to any fee.

By Final Judgment entered November 1, 2019, the circuit court held

that Byrnes was not entitled to attorney’s fees under KRS 304.39-070(5). Relying

upon MFA Insurance Company v. Carroll, 687 S.W.2d 553 (Ky. App. 1985), the

Court concluded that Byrnes was “not entitled to a statutory attorney fee under

2 The complaint was filed on March 6, 2019, and the amended complaint was ordered filed on May 7, 2019.

-6- KRS 304.39-070(5) because [Kentucky Farm Bureau] elected to pursue arbitration

to enforce its subrogation rights.” Final Judgment at 2.

On appeal, Byrnes contends that the circuit court erred as a matter of

law by concluding that he was not entitled to attorney’s fees pursuant to KRS

304.39-070(5). Byrnes argues that the circuit court misinterpreted MFA Insurance,

687 S.W.2d at 553, in applying it to this case and erroneously disregarded the

Kentucky Supreme Court’s subsequent opinion in Baker v. Motorists Insurance

Companies, 695 S.W.2d 415 (Ky. 1985). Citing to Baker, 695 S.W.2d 415, Byrnes

asserts that he is entitled to reasonable attorney’s fees under KRS 304.39-070(5) as

he conferred a benefit upon Kentucky Farm Bureau.3

ANALYSIS

We begin our analysis by setting forth KRS 304.39-070(5):

An attorney representing a secured person in any action filed under KRS 304.39-060 shall be entitled to a reasonable attorneys’ fee in the event that reparation benefits paid to said secured person by that secured person’s reparation’s obligor are reimbursed by any insurance carrier on behalf of a tortfeasor who is the defendant in any such action filed by the said secured person or in the event such potential “action” is settled by said potential tortfeasor’s insurance carrier on his behalf prior to the filing of any such suit.

3 While relying on Baker v. Motorists Insurance Companies, 695 S.W.2d 415 (Ky. 1985), in his argument on appeal, Byrnes also criticizes the opinion, saying it is “a bridge too far.” Byrnes Brief at 9. Byrnes cannot have it both ways, and we are duty bound to follow Supreme Court precedent. Supreme Court Rule 1.030(8)(a).

-7- The seminal case interpreting KRS 304.39-070(5) is the Kentucky

Supreme Court’s Opinion in Baker, 695 S.W.2d 415. In Baker, an attorney

represented a victim of a motor vehicle accident. Id. The victim was insured by

Motorists Insurance Companies (Motorists), and Motorists paid its insured BRB

after the accident. The attorney did not represent Motorists. As liability was not at

issue, the attorney settled the case with the tortfeasor’s insurance carrier, and

Motorists recovered BRB from said insurance carrier. Thereafter, the attorney

sought payment of attorney’s fees from Motorist under KRS 304.39-070.

Motorists refused to pay such fees and filed the action. In concluding that

attorney’s fees were not mandated under its facts, the Supreme Court reasoned:

This is a statutory attorney’s fee. It is not dependent upon the reparation obligor employing the insured’s attorney to represent its subrogation interest. Morris and McGlincy v. Nationwide Mutual Ins. Co., Ky.App., 657 S.W.2d 248 (1983); Meridian Mutual Ins. Co. v. Walker, Ky.App., 602 S.W.2d 181 (1980). It is not dependent upon the reparation obligor joining in the personal injury action filed by the attorney filed on behalf of the reparation obligor’s insured. Subsection Five (5) also applies “in the event such potential ‘action’ is settled by said potential tortfeasor’s insurance carrier on his behalf prior to the filing of any such suit.”

Indeed, if the facts show that the attorney’s representation of the insured conferred a benefit on the reparation obligor, Subsection Five (5) establishes the attorney’s right to collect a reasonable fee from the reparation obligor for the benefit conferred which cannot be evaded or avoided. Meridian Mutual Ins. Co. v. Walker, supra at 182. Such a benefit results from

-8- establishing liability, from establishing the right to payment of disputed medical expenses or wages, or by other proof of benefit conferred. . . .

It is not necessary that the reparations obligor employ the services of the injured party’s attorney, either directly or impliedly, for the statutory fee to apply. If the attorney confers a benefit on the reparations obligor the reparations obligor cannot avoid the statutory fee by contingency agreement with the tortfeasor’s carrier to abide by the results in the injured party’s case, or otherwise. Nor is the statutory fee dependent upon proof that the attorney intended by his services to confer a benefit on the reparations obligor in addition to his client, if the proof shows that the result of his services did in fact confer such a benefit.

Baker, 695 S.W.2d at 416-17.

The Supreme Court held that the attorney was only entitled to the

statutory fee if the attorney provided a benefit to the reparations obligor (insurance

company). Id. The Court particularly stated, “[s]uch a benefit results from

establishing liability, from establishing the right to payment of disputed medical

expenses or wages, or by other proof of benefit conferred.” Id. at 417 (emphasis

added). Relying upon the particular facts therein, the Supreme Court in Baker

determined that the attorney failed to demonstrate any benefit conferred, either

directly or indirectly, upon Motorists.4 Id.

4 We do not view Baker v. Motorists Insurance Companies, 695 S.W.2d 415 (Ky. 1985) and MFA Insurance Company v. Carroll, 687 S.W.2d 553 (Ky. App. 1985) as conflicting. Contrary to the arguments set out in both parties’ briefs, the Supreme Court in Baker, 695 S.W.2d 415, 417, approvingly cited to MFA Insurance Company v. Carroll, 687 S.W.2d 553. Citing to MFA,

-9- In its Final Judgment, the circuit court noted that Byrnes did not

represent Kentucky Farm Bureau and that Kentucky Farm Bureau sent Byrnes a

letter informing him that it would pursue arbitration to recover BRB. Importantly,

the circuit court concluded that Byrnes was not entitled to the statutory fee because

Kentucky Farm Bureau “elected to pursue arbitration to enforce its subrogation

rights.” Final Judgment at 2. This is the extent of the circuit court’s reasoning to

support its decision. Notably absent is any discussion of whether Byrnes conferred

a benefit upon Kentucky Farm Bureau as required by Baker, 695 S.W.2d at 417.

However, the circuit court did note that Byrnes contends he conferred a benefit

upon Kentucky Farm Bureau. And, in an attached affidavit to his amended

complaint, Byrnes averred:

2. My office assisted the clients in obtaining and filling out the PIP applications.

3. My office translated the pip [sic] applications and translated the answers from the clients in order to return the form to Kentucky Farm Bureau.

4. My office returned the PIP applications to Kentucky Farm Bureau.

5. I opened the claims with the at fault drivers [sic] insurance company, Safeco.

the Baker Court specifically stated that “the Court of Appeals reached a similar result on similar facts.” Baker, 695 S.W.2d at 417. In both Baker, 695 S.W.3d 415 and MFA, 687 S.W.2d 553, the attorneys sought a fee under Kentucky Revised Statutes 304.39-070(5), the attorneys did not represent the reparations obligor, liability was not in issue, and the attorneys did not confer a benefit upon the reparations obligor.

-10- 6. I directed the PIP benefits to be paid as the clients requested.

7. I obtained and gave to Kentucky Farm Bureau supporting documentation for lost wage claims.

8. I gave to Kentucky Farm Bureau the civilian report that was completed since no police report was done.

9. I made the clients available to Kentucky Farm Bureau to do taped statements in my office to support the claims asserted.

10. My office obtained all the medical records and bills and forwarded them to Safeco in order to assert the claim.

12. There was no police report done on the collision, so my office had to document and attend recorded statements with both insurance companies to establish liability.

13. On or about November 29, 2016[,] the claims for Mr. Frontela Machin were resolved in favor of the Kentucky Farm Bureau insured paving the way for Kentucky Farm Bureau to recoup the PIP benefits paid on the claim.

The above actions taken by Byrnes could possibly be construed to constitute a

benefit conferred upon Kentucky Farm Bureau. However, as noted, the circuit

court did not address whether Byrnes’ actions conferred a benefit, limiting the

court’s analysis to the arbitration proceeding initiated by Kentucky Farm Bureau.

-11- Additionally, from the meager record on appeal, this Court is unable

to conclude whether liability in the motor vehicle accident was contested or

established.5 In its motion for judgment on the pleadings, Kentucky Farm Bureau

curiously argued:

[A]s counsel for Machin, Gutierres, and Miranda, [Byrnes] had to prove liability and damages in order for his clients to establish entitlement to pain and suffering in tort from the at-fault party as a result of the motor vehicle accident. Any action [Byrnes] may have taken as counsel for Machin, Gutierres, and Miranda was neither a direct benefit nor a directly authorized service conferred onto Kentucky Farm Bureau in exercising its subrogation rights, and thus, cannot justify any award of attorney’s fees.

Motion for judgment on the pleadings at 5-6. If Byrnes did in fact establish

liability, the Baker Court specifically recognized that the establishment of liability

would constitute a benefit conferred upon the reparations obligor. See Baker, 695

S.W.2d at 417.

Accordingly, we vacate and remand the Final Judgment rendered by

the circuit court. Upon remand, the circuit court shall conduct an evidentiary

hearing following the dictates of Baker, 695 S.W.2d at 417, and determine whether

5 The settlement agreement entered into with the liability insurance carrier, Safeco, was not entered into the record of this case. Similarly, the arbitration award obtained by Kentucky Farm Bureau is also not a part of the record on appeal. The case was decided upon a Kentucky Rules of Civil Procedure 12.03 motion for judgment on the pleadings filed by Kentucky Farm Bureau, without any discovery having been taken. The hearing on the motion lasted approximately 17 minutes.

-12- Byrnes conferred a benefit upon Kentucky Farm Bureau. If Byrnes conferred such

a benefit, he is entitled to reasonable attorney’s fees under KRS 304.39-070(5).

On the other hand, as mandated by the Supreme Court in Baker, if there is no proof

that Byrnes’ work conferred any benefit on Kentucky Farm Bureau, directly or

indirectly, then an award of the statutory fees will not be allowed. Baker, 695

S.W.2d at 417. After the determination of entitlement to the statutory fees, the

circuit court then shall address Byrnes’ remaining claims, if not otherwise rendered

moot by the court’s ruling.

For the foregoing reasons, the Final Judgment of the Jefferson Circuit

Court is vacated and remanded for proceedings consistent with this Opinion. The

motion to strike Byrnes’ brief is DENIED.

ALL CONCUR.

ENTERED: April 23, 2021 _/s/ Jeff S. Taylor____________ JUDGE, COURT OF APPEALS

BRIEF FOR APPELLANT: BRIEF FOR APPELLEE:

Jeffrey A. Sexton Brian D. Stempien Louisville, Kentucky Jessica M. Stemple Louisville, Kentucky

-13-