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Barbara Ann Ditto v. Jerry T. Mucker ( 2022 )


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  •                 RENDERED: NOVEMBER 18, 2022; 10:00 A.M.
    TO BE PUBLISHED
    Commonwealth of Kentucky
    Court of Appeals
    NO. 2021-CA-1488-MR
    BARBARA ANN DITTO AND
    ROBERT E. MURRAY, JR.                                                APPELLANTS
    APPEAL FROM BRECKINRIDGE CIRCUIT COURT
    v.              HONORABLE KENNETH H. GOFF, II, JUDGE
    ACTION NO. 17-CI-00222
    JERRY T. MUCKER                                                         APPELLEE
    OPINION
    AFFIRMING
    ** ** ** ** **
    BEFORE: ACREE, CETRULO, AND GOODWINE, JUDGES.
    CETRULO, JUDGE: Appellants appeal an order from the Breckinridge Circuit
    Court dismissing their lawsuit for failure to revive their personal injury action
    within one year of the death of the Appellee. We affirm.
    I.     BRIEF HISTORY
    On November 7, 2015, Robert E. Murray, Jr. and Barbara Ann Ditto
    (collectively, “the Appellants”) were involved in a two-vehicle accident with
    Appellee Jerry Mucker (“Mucker”). In November 2017, the Appellants filed a
    complaint in circuit court claiming Mucker acted negligently while driving his
    vehicle. First Chicago Insurance Company (“First Chicago”), Mucker’s vehicle
    insurer, represented him in the action.
    On September 16, 2020, the parties held an unsuccessful mediation.
    At the end of mediation, Appellants’ counsel informed First Chicago that Mucker
    had recently died of COVID-19. Thereafter, First Chicago contacted Mucker’s
    niece who confirmed he had died one week prior, on September 9, 2020. Then,
    First Chicago filed a notice of death of defendant with service to the Appellants.
    No personal representative was appointed for the deceased Mucker; no estate was
    opened for Mucker.
    On September 24, 2021, First Chicago filed a motion for summary
    judgment, claiming the Appellants had one year from Mucker’s death to substitute
    a personal representative for him to revive the action, but – because they made no
    substitution – the statute of limitations mandated dismissal of the action. After
    both parties briefed the issue, the Breckinridge Circuit Court granted the motion
    for summary judgment and dismissed the underlying action. The trial court found
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    that, despite having received proper notice of Mucker’s death, the Appellants failed
    to revive their action – by substituting a personal representative for Mucker –
    within the one-year statute of limitations. Additionally, the trial court determined
    that any agency relationship that may have existed between First Chicago and
    Mucker terminated upon Mucker’s death. Finally, the trial court found no conflict
    of interest or ethical violations “for a plaintiff to take action to revive claims
    against a deceased defendant.” This appeal resulted.
    II.    STANDARD OF REVIEW
    The standard of review upon appeal of an order granting 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.” Scifres v. Kraft, 
    916 S.W.2d 779
    , 781 (Ky. App. 1996) (citing
    Kentucky Rule of Civil Procedure (“CR”) 56.03). Upon a motion for summary
    judgment, all facts and inferences in the record are viewed in a light most favorable
    to the non-moving party and “all doubts are to be resolved in his favor.” Steelvest,
    Inc. v. Scansteel Serv. Ctr., Inc., 
    807 S.W.2d 476
    , 480 (Ky. 1991) (citation
    omitted). A summary judgment looks only to questions of law, and we review de
    novo. Brown v. Griffin, 
    505 S.W.3d 777
    , 781 (Ky. App. 2016) (citation omitted).
    -3-
    III.   ANALYSIS
    Kentucky Revised Statute (“KRS”) 395.278 and CR 25.01(1) act in
    tandem to provide the process of revival – when a defendant dies during the course
    of litigation – as well as the window within which it must be completed. Est. of
    Benton by Marcum v. Currin, 
    615 S.W.3d 34
    , 36 (Ky. 2021).
    When a party to an action dies while that action is
    pending, that action is abated and lies dormant until it is
    revived by a proper successor-in-interest. Hardin Cnty.
    v. Wilkerson, 
    255 S.W.3d 923
    , 926 (Ky. 2008). KRS
    395.278 provides that “[a]n application to revive an
    action in the name of the representative or successor of a
    plaintiff, or against the representative or successor of a
    defendant, shall be made within one (1) year after the
    death of a deceased party.” CR 25.01, which operates in
    conjunction with KRS 395.278, provides, in pertinent
    part:
    (1) If a party dies during the pendency of an action
    and the claim is not thereby extinguished, the
    court, within the period allowed by law, may order
    substitution of the proper parties. If substitution is
    not so made the action may be dismissed as to the
    deceased party. The motion for substitution may
    be made by the successors or representatives of the
    deceased party or by any party[.]
    
    Id.
    On appeal, the Appellants contend that dismissal was improper
    because First Chicago had a duty to have an administrator appointed in Mucker’s
    stead for the underlying negligence claim to proceed. More specifically, the
    Appellants argue that First Chicago – as Mucker’s insurer – had a duty to represent
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    Mucker in the negligence action and that duty made First Chicago a
    “representative” of Mucker. By being his “representative,” First Chicago was also
    an “agent” of Mucker.1 Therefore, as his “agent,” First Chicago had a duty to
    continue that representation through, and including, the appointment of an
    administrator for the deceased.2 Additionally, the Appellants argue that they were
    ethically prohibited from filing for the appointment of an administrator for
    Mucker’s estate because Supreme Court Rule (“SCR”) 3.130 (1.7) prohibits
    attorneys from representing opposing parties in an action.
    To the contrary, First Chicago, as Mucker’s representative, argues it
    did not have a duty to revive the underlying negligence action after Mucker’s
    death; that ethical rules did not bar the Appellants from opening an estate for the
    deceased; and finally, that the trial court properly granted the summary judgment
    1
    Appellants make this leap from “representative” to “agent” through Black’s Law Dictionary,
    5th Edition, and Kentucky precedent from 1932. Appellants – citing this early edition of Black’s
    Law Dictionary – define a “representative” as “[o]ne who represents or stands in the place of
    another. One who represents another in a special capacity as an ‘agent’ and the term is
    interchangeable with ‘agent.’” Representative, BLACK’S LAW DICTIONARY (5th ed. 1979). Also,
    Appellants argue that “agency’ is a contractual relationship that may be “implied from the acts
    and conduct of the parties[,]” paraphrasing Monohan v. Grayson Cnty. Supply Co., 
    245 Ky. 781
    ,
    
    54 S.W.2d 311
    , 312 (1932).
    2
    Appellants argue “Restatement of Agency, § 387 sets forth the general principle that . . . an
    agent is subject to a duty to his principal to act solely for the benefit of the principal in all
    matters connected with his agency.” (Emphasis in Appellants’ brief, not in original.)
    Appellants argue that First Chicago – upon Mucker’s death – was obligated to protect his assets
    which included any settlement or award granted to Appellants in the underlying action.
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    because the underlying lawsuit was not properly revived before the expiration of
    the statute of limitations. We agree, as does Kentucky precedent.
    “It is fundamental to our jurisprudential system that a court cannot, in
    an in personam action acquire jurisdiction until a party defendant is brought before
    it. The party defendant must actually or legally exist and be legally capable of
    being sued.” Jackson v. Est. of Day, 
    595 S.W.3d 117
    , 122 (Ky. 2020) (quoting
    Ratliff v. Oney, 
    735 S.W.2d 338
    , 341 (Ky. App. 1987)). However, a defendant’s
    death during the pendency of an action does not necessarily extinguish the claim.
    CR 25.01(1). If a defendant dies after a complaint is filed but before legal
    resolution, the attorney for the deceased has a duty to disclose his or her client’s
    death to the opposing party. Harris v. Jackson, 
    192 S.W.3d 297
    , 307 (Ky. 2006).
    Yet, the deceased’s attorney is not required to file the motion for substitution.
    CR 25.01(1) (“The motion for substitution may be made by the successors or
    representatives of the deceased party or by any party[.]”) (emphasis added). See
    also Harris, 192 S.W.3d at 304 and Est. of Day, 595 S.W.3d at 124. If the
    representative or other party decides to revive the action, they must file a motion
    for substitution within one year after the defendant’s death. KRS 395.278.
    In Harris, the Kentucky Supreme Court discussed a similar situation.
    Harris, 
    192 S.W.3d 297
    . Harris and Jackson were involved in a two-vehicle
    accident. 
    Id. at 299
    . Jackson filed an action against Harris alleging personal injury
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    claims. 
    Id.
     Harris died during the course of the litigation, but Harris’s legal
    representative did not inform the opposing party of Harris’s death. 
    Id.
     Harris’s
    attorney contacted the Kentucky Ethics hotline in regard to his duties of disclosure.
    
    Id. at 300
    . He was advised he did not have to take affirmative action adverse to his
    client, as long as his conduct did not amount to a fraud upon the court. 
    Id.
    Following that advice, Harris’s counsel continued with the legal
    proceedings without notifying the opposing party of Harris’s death. 
    Id.
     One year
    after Harris’s death, his counsel filed a motion to dismiss because Jackson had not
    filed a revivor. 
    Id. at 301
    . The circuit court dismissed Jackson’s claims for failure
    to revive pursuant to KRS 395.278. Harris, 
    192 S.W.3d at 301
    . On appeal – in
    pertinent part – the Kentucky Supreme Court determined that Harris’s legal
    counsel had a duty to disclose his client’s death and because of that failure, Harris
    was estopped from using the statute of limitations defense. 
    Id. at 307
    . However,
    our Supreme Court did not extend that duty beyond the obligation to report the
    death.
    As in Harris, here, the alleged tortfeasor died after the complaint was
    filed but before legal resolution. Here, the duty to disclose Mucker’s death was not
    at issue; all parties were aware of his death approximately one week after it
    occurred. Instead, the Appellants attempt to expand the duty beyond disclosure,
    but Harris does not support that expansion. The Harris Court did not find that the
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    deceased’s attorney must also file the revivor. In fact, 14 years later – when
    discussing the Harris opinion – the Kentucky Supreme Court referred to the fact
    that “[t]he plaintiffs [i.e., Jackson] in the case were required to revive the action
    pursuant to KRS 395.278 within one year of [Harris’s] death, which they failed to
    do . . . .” Est. of Day, 595 S.W.3d at 124. Again, our Supreme Court emphasized
    the clear direction in CR 25.01: the motion for substitution “may be made by the
    successors or representatives of the deceased party or by any party. . . .” CR
    25.01(1).
    Next, the Appellants argue that First Chicago had a duty to file the
    revivor because of the ongoing agency relationship between Mucker and his
    insurer. Simply, we do not agree. There is no need to discuss if an agency
    relationship existed because even if an agency relationship existed, the agency
    ended at Mucker’s death. The trial court stated it clearly and it is worth repeating:
    “An agency . . . is the fiduciary relation which results
    from the manifestation of consent by one person [the
    principal] to another [the agent] that the other shall act on
    his behalf and subject to his control, and consent by the
    other so to act.” Ping v. Beverly Enterprises, Inc., 
    376 S.W.3d 581
    , 591 (Ky. 2012) (citing Phelps v. Louisville
    Water Company, 
    103 S.W.3d 46
    , 50 (Ky. 2003)[)]. The
    death of the principal brings the agency relationship to an
    end since the principal’s control of the agent is generally
    deemed an essential element of the agency relationship.
    
    Id.
     (See also, Restatement 2d of Agency, § 120). Even if
    an agency relationship existed, the relationship would
    have ended on September 9, 2020 with the death of Mr.
    Mucker.
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    (Internal quotation marks omitted.)
    While Appellants agree that Ping, 376 S.W.3d at 591, correctly
    addresses the creation of an agency relationship, they disagree with the trial court’s
    application of Ping to the end of this agency relationship. The Appellants argue
    that death should not terminate this agency relationship because, under these
    circumstances, (1) an insurer requires little to no interaction with the client in order
    to reach a resolution in a legal action (thereby not requiring “control”), and (2)
    First Chicago was continuing the agency after Mucker’s death by proceeding in the
    underlying litigation, i.e., by filing the motion for summary judgment.
    First, while in practice it may be true that insurers require little, if any,
    input from their clients when approaching a settlement, we are a precedent-
    following court. Special Fund v. Francis, 
    708 S.W.2d 641
    , 642 (Ky. 1986). We
    are not at liberty to create a unique exception to the well-established rule that
    agency relationships terminate at the death of the principal. Ping, 376 S.W.3d at
    591. See also Moore v. Garred, 
    223 Ky. 20
    , 
    2 S.W.2d 1036
    , 1037 (1928) (citation
    omitted) (“It is a well-established rule of the common law that, since an agent can
    and does act only in the name of the principal and executes his will, the death of
    the principal ordinarily works an immediate termination of the authority of the
    agent by operation of law, unless the agent’s authority is coupled with an interest
    in the subject-matter.”).
    -9-
    Second, as reiterated by Harris, the doctrine of virtual representation
    allows for a non-party insurance provider to continue representation because it is a
    real party in interest as the primary obligor. Harris, 
    192 S.W.3d at 302-03
    . First
    Chicago, like the insurance company in Harris, “has the duty to defend, and pay
    the defense’s costs, as well as the right to settle as it consider[s] appropriate[,]”
    thereby making it a “real party in interest.” 
    Id. at 304
     (internal quotation marks
    omitted). Therefore, First Chicago was not acting as Mucker’s agent after his
    death, but rather continuing with the action through virtual representation.
    Finally, Appellants argue that if they had filed a petition on Mucker’s
    behalf, that would be – in a limited capacity – the same as representing both sides
    of the litigation, thereby violating SCR 3.130 (1.7).3 However, from our view, not
    petitioning for the appointment is contrary to the Appellants’ own interest because
    without the appointment, as we have discussed, the litigation could be properly
    dismissed under CR 25.01 and KRS 395.278. Additionally, the appointment,
    under these circumstances, is more akin to joining an essential party than it is
    representing an opposing party. Moreover, our Kentucky Supreme Court
    addressed the issue of revivor without imposing a duty to file the petition for
    3
    SCR 3.130 (1.7) states, in pertinent part, “a lawyer shall not represent a client if the
    representation involves a concurrent conflict of interest. A concurrent conflict of interest exists
    if: [] the representation of one client will be directly adverse to another client; . . . a lawyer may
    represent a client if: . . . [] the representation does not involve the assertion of a claim by one
    client against another client represented by the lawyer in the same litigation or other proceeding
    before a tribunal; . . . .”
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    substitution on a particular party. See Harris, 
    192 S.W.3d at 307
    ; see also Est. of
    Day, 595 S.W.3d at 123. Lastly, we agree with First Chicago’s argument:
    If Appellants believed that opening an estate for Jerry
    Mucker was in violation of ethics rules, they could have
    filed a motion at any time seeking the trial court to allow
    Appellants the right to open an estate, to order defense
    counsel to provide whatever information was needed to
    open an estate, or even to order the defense to open an
    estate. That did not happen.
    Therefore, we find that First Chicago, on behalf of Mucker, was
    entitled to judgment as a matter of law.
    IV.    CONCLUSION
    Accordingly, we AFFIRM the Breckinridge Circuit Court’s order
    granting summary judgment and dismissing the action.
    ALL CONCUR.
    BRIEFS FOR APPELLANTS:                       BRIEF FOR APPELLEE:
    Alan W. Roles                                Galen L. Clark
    Louisville, Kentucky                         Louisville, Kentucky
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