Rodney Grimes v. Auto Venture Acceptance, LLC ( 2023 )

RENDERED: APRIL 7, 2023; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2022-CA-0319-MR
RODNEY GRIMES APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
v. HONORABLE AUDRA J. ECKERLE, JUDGE
ACTION NO. 19-CI-003155
AUTO VENTURE ACCEPTANCE,
LLC APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: ACREE, EASTON, AND JONES, JUDGES.
EASTON, JUDGE: Appellant Rodney Grimes (“Grimes”) seeks reversal of an
order of the Jefferson Circuit Court granting summary judgment in favor of
Appellee Auto Venture Acceptance, LLC (“Auto Venture”). Grimes argues Auto
Venture failed to safeguard Grimes’ vehicle while it was at a storage lot used by
Auto Venture. As a result, someone broke into the vehicle and stole personal
property. Finding no error, we affirm.
FACTUAL AND PROCEDURAL HISTORY
In August 2018, Grimes entered into a Retail Installment Contract and
Security Agreement (“Contract”) with Auto Venture for the purchase of a 2007
Cadillac Escalade. Under the Contract, Grimes was to pay the sum of $12,146.05
in biweekly installments of $195.00. The Contract gave Auto Venture a security
interest in Grimes’ vehicle.
With this Contract, Grimes executed a separate document entitled
“Right of Repossession.” The Right of Repossession authorized Auto Venture to
repossess the vehicle if Grimes failed to make payments under the Contract. The
Right of Repossession states, in relevant part:
I agree that I will not keep any personal property of any
great value in the vehicle during the term of this contract,
but in the event I do, I assume any and all responsibility
for any personal property left in the vehicle by me or by
other persons, should that property be lost or missing for
any reason from the vehicle after it has been taken back
by you and stored in a reasonably safe place.
Grimes failed to make the payments under the Contract, and the
vehicle was repossessed in March 2019. A few weeks later, Grimes claims he
discovered his vehicle, which had remained at the storage lot, had been vandalized.
Grimes claims he had left seat back televisions, a laptop computer, cell phones,
designer purses, and jewelry (identified at one point as diamond rings) in the
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vehicle. Grimes says the supposedly stolen items had a value of $9,000.1 Grimes
alleged he had delivered his vehicle to Auto Venture for repairs thus suggesting a
claim of bailment for hire as opposed to a repossession. Auto Venture offered
proof that the dashboard of the vehicle had been removed prior to the repossession
with the GPS wires cut.2 Armed with this information, Auto Venture suggests
Grimes removed anything of value from the vehicle himself prior to repossession.
As a trial date approached, the circuit court conducted an oral
argument on Auto Venture’s Motion for Summary Judgment. By Order entered on
March 2, 2022, the circuit court granted Auto Venture’s Motion for Summary
Judgment. This appeal followed.
STANDARD OF REVIEW
“The standard of review on appeal of a summary judgment is whether
the circuit judge correctly found that there were no issues as to any material fact
and that the moving party was entitled to a judgment as a matter of law.” Pearson
ex rel. Trent v. Nat’l Feeding Systems, Inc., 90 S.W.3d 46, 49 (Ky. 2002).
Summary judgment is only proper when ‘it would be impossible for the respondent
to produce evidence at the trial warranting a judgment in his favor.” Steelvest, Inc.
1
Complaint Paragraph 6.
2
Auto Venture letter to Grimes dated June 20, 2019. Grimes’ initial counsel withdrew from this
case soon after receipt of this letter.
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v. Scansteel Service Center, Inc., 807 S.W.2d 476, 480 (Ky. 1991). In ruling on a
motion for summary judgment, the Court is required to construe the record “in a
light most favorable to the party opposing the motion . . . and all doubts are to be
resolved in his favor.” Id. A party opposing a summary judgment motion cannot
rely on the hope that the trier of fact will disbelieve the movant’s denial of a
disputed fact but must present affirmative evidence to defeat a properly supported
motion for summary judgment. Id. at 481. In Steelvest the word “impossible’ is
used in a practical sense, not in an absolute sense.” Perkins v. Hausladen, 828
S.W.2d 652, 654 (Ky. 1992). As summary judgment involves only legal questions
because there can be no genuine issues of material fact, an appellate court does not
defer to the trial court’s decision and will review the issue de novo. Lewis v. B & R
Corp., 56 S.W.3d 432, 436 (Ky. App. 2001).
ANALYSIS
Grimes argues the circuit court erred in granting summary judgment
for three reasons, which we will address in this order: (1) the trial court did not
give Grimes a reasonable opportunity to complete discovery; (2) the circuit court
relied on an alleged misstatement by Auto Venture that Grimes failed to respond to
discovery requests; and (3) genuine issues of material fact exist in the record,
including whether a bailment existed.
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With respect to a reasonable opportunity to complete discovery,
summary judgment “is proper only after the party opposing the motion has been
given ample opportunity to complete discovery and then fails to offer controverting
evidence.” Suter v. Mazyck, 226 S.W.3d 837, 841 (Ky. App. 2007). It is not
required to show discovery has been completed, but only that the non-moving
party has had an opportunity to do so. Carberry v. Golden Hawk Transp. Co., 402
S.W.3d 556, 564 (Ky. App. 2013).
Grimes filed this action in May of 2019. Auto Venture filed its
motion for summary judgment in November of 2021. Grimes had over two years
to complete discovery. Further, Grimes’ counsel moved for a trial date in May of
2021. It cannot be said that the circuit court did not give Grimes ample
opportunity to complete discovery.
The next contention relates to discovery responses and provides this
Court with an opportunity to discuss important procedural rules which were not
followed in this case. On September 14, 2021, Auto Venture sent interrogatories
and requests for admissions to Grimes. Alleging they had never received the
responses to the requested admissions, Auto Venture proceeded to seek summary
judgment in November 2021.
Grimes subsequently filed interrogatory answers and responses to the
requests for admissions. They are dated October 14, 2021, the last day for a timely
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answer, with a certificate of service stating the same date. Grimes did not file them
with the circuit court until December 6, 2021, the same day he filed his response to
the summary judgment motion.
CR3 5.06 provides an exception for filing discovery requests with the
court. It is unclear whether the rule exempts discovery answers and responses. 6
Ky. Prac. R. Civ. Proc. Ann. Rule 5.06. Local practice varies. Id. Regardless, this
material is in the file even though filed after the summary judgment motion had
been made.
We will next address the sufficiency of the discovery responses. CR
33.01(2) requires interrogatory answers to be sworn “under oath.” Grimes signed
his interrogatory answers under a heading entitled “Verification.” This does not
suffice for being under oath. See Taylor v. Kentucky Unemployment Ins. Comm’n,
382 S.W.3d 826, 833-34 (Ky. 2012). Auto Venture’s interrogatory answers were
not signed by a representative of Auto Ventures at all.
Neither Auto Venture’s nor Grimes’ answers are proper answers by
operation of this rule. CR 56.03 permits consideration of “papers” or other
information submitted. Conley v. Hall, 395 S.W.2d 575, 582-82 (Ky. 1965). Still,
the evidentiary value of the submitted documents is impacted by the failure to
provide a sworn evidentiary foundation for them. Since both parties are non-
3
Kentucky Rules of Civil Procedure.
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compliant and neither raised this insufficiency of the interrogatory answers, we
will consider their answers alike.
Responses to admissions requests do not have to be sworn and may be
signed by counsel as in this case. CR 36.01. Accepting the timeliness of the
responses to the requested admissions, Grimes conclusively admitted he signed the
Right of Repossession document, he failed to make the required payments on the
vehicle, and the vehicle was repossessed. CR 36.02.
In the Right of Repossession, Grimes agreed he “will not keep any
personal property of any great value in the vehicle during the term of this
contract.” Grimes further agreed that, in the event the vehicle is repossessed, he
would assume “any and all responsibility for any personal property left in the
vehicle by me or by other persons, should that property be lost or missing for any
reason from the vehicle after it has been taken back by you and stored in a
reasonably safe place.”
Grimes argues there are genuine issues of material fact as to whether a
bailment for hire4 existed. But Grimes admitted the vehicle was repossessed
contrary to his unsworn assertions he had it in for repairs. Even if no such
bailment existed, Grimes further argues Auto Venture owed a duty to reasonably
safeguard the vehicle as collateral when repossessing it under provisions of the
4
Grimes cited Webb v. McDaniels, 205 S.W.2d 511 (Ky. 1947).
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Uniform Commercial Code. KRS5 355.9-207. It is true Auto Venture had a
purchase money lien on the vehicle (but not on the removable personal property
within). This is one reason for the waiver contained in the Right of Repossession.
This presents the next problem with non-compliance with the civil
rules, this time by Auto Venture. CR 8.03 requires affirmative defenses to be pled
in an answer. Among these are assumption of risk, release, and waiver. The rule
states such a defense is to be “set forth” in the answer. Auto Venture did not do
this. Instead, Auto Venture’s Answer just “provisionally” incorporated all of CR
8.03 by reference.
This failure is not fatal to the summary judgment entered. First, the
Answer does allege contributory or comparative negligence. Traditionally,
assumption of risk is understood to be within a defense of contributory negligence.
See Roberts v. Davis, 422 S.W.2d 890 (Ky. 1967). Still, the apparent defense
specifically relied upon is a release or waiver. A court may allow consideration of
a defense not specifically stated in an initial answer, but the record must show the
circuit court authorized the late defense. See American Founders Bank, Inc. v.
Moden Investments, LLC, 432 S.W.3d 715, 722 (Ky. App. 2014).
The Right of Repossession document was part of the documents
governing this case from the beginning. Both sides argued the factual
5
Kentucky Revised Statutes.
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circumstances and legal effects of the document before the circuit court decided
the issue. Even so, Auto Venture did not specifically raise the correct affirmative
defense based upon the Right of Repossession. Ultimately, this failure to plead an
affirmative defense does not compel a different result, because the duty imposed
on Auto Venture in a repossession situation is not different from that imposed by
the Right of Repossession. Since the circuit court based its decision on the Right
of Repossession, which included the duty for preservation of the items repossessed,
we will address it.
The Right of Repossession is an example of an exculpatory contract.
Exculpatory contracts waiving future liability for negligence, whether ordinary or
gross, are not invalid per se. Hargis v. Baize, 168 S.W.3d 36, 47 (Ky. 2005).
Exculpatory contracts are disfavored and are strictly construed against the parties
relying on them. Id. The wording of such a contract must be “so clear and
understandable that an ordinarily prudent and knowledgeable party to it will know
what he or she is contracting away; it must be unmistakable.” Id.An exculpatory contract will be upheld only if (1) it explicitly
expresses an intention to exonerate by using the word “negligence”; or (2) it
clearly and specifically indicates an intent to release a party from liability for a
personal injury caused by that party’s own conduct; or (3) protection against
negligence is the only reasonable construction of the contract language; or (4) the
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hazard experienced was clearly within the contemplation of the provision. Id.(emphasis added). “Thus, an exculpatory clause must clearly set out the
negligence for which liability is to be avoided.” Id.The Right of Repossession signed by Grimes does not mention the
word “negligence.” However, it does indicate an intent to release Auto Venture
from liability from damages caused by its own conduct. Also, the protection
against negligence is the only reasonable construction of the contractual language.
Further, the hazard experienced was clearly within the contemplation of the
provision as Grimes agreed not to store personal property of great value in the
vehicle and that he would assume responsibility for any personal property left in
the vehicle. The Right of Repossession satisfies three out of the four factors found
in Hargis. The circuit court correctly determined the Right of Repossession is
valid.
The only remaining issue was the contractual condition within the Right
of Repossession for the storage provided by Auto Venture to be in a “reasonably
safe place.” Auto Venture would have the same duty under KRS 355.9-207 and a
bailment. Again, the unsworn discovery suggests a history of other thefts but no
substantiated evidence about the prior incidents.
A photo is provided showing vehicles in a fenced lot with razor or
barbed wire at the top and a “No Trespassing” sign. The sign also suggests video
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surveillance. Auto Venture stored repossessed vehicles at a lot operated by Auto
Smart at nearby 6309 Shepherdsville Road. In its unsworn interrogatory answers,
Auto Venture explains: “The premises is fully staffed during the day, and all
vehicles are placed within a fenced area which features razor wire and a locked
gate.”6
Grimes points out there was no video provided about the theft claimed
here, and because Auto Venture did not mention operational video in their
interrogatory answer, then there must not have been operational cameras. If so, a
sign still insinuated this to would-be thieves. We cannot say a genuine issue of
fact was presented by this record about a “reasonably safe” storage of the vehicle.
Finally, we note again this case really does not depend on the Right of
Repossession document itself because the duty to preserve collateral required the
same duty to preserve the property as the Right of Repossession document
required. We note this because Grimes did not raise an argument about KRS
190.100(1)(a)2. in his prehearing statement or initial brief but attempted to
resurrect it in his Reply Brief. This statute directs all agreements be part of a
single retail instalment contract.
The Contract here does not refer to the Right of Repossession nor is this
separate agreement part of Contract. This contention of a statutory violation was
6
Auto Venture’s Answer to Interrogatory No. 19.
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waived by Grimes. RAP7 22(C)(2); Best v. West American Insurance Co., 270
S.W.3d 398, 405 (Ky. App. 2008). This statutory issue would not have compelled
a different result in the case had it not been waived.
CONCLUSION
In this case, which presents the duty of a creditor after a repossession
(not a bailment for hire), the circuit court correctly determined the Right of
Repossession is valid. This Right of Repossession contained the same duty as that
imposed by statute for repossessed collateral. The record in this case does not
illustrate any genuine issues of material fact. The order of the Jefferson Circuit
Court granting summary judgment in favor of Auto Venture is AFFIRMED.
ALL CONCUR.
BRIEF FOR APPELLANT: BRIEF FOR APPELLEE:
Zachary Taylor Joshua W. Davis
Louisville, Kentucky Kristen A. Johnson
Louisville, Kentucky
7
Kentucky Rules of Appellate Procedure.
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