John Byrnes v. Kentucky Farm Bureau Insurance Company

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NOT TO BE PUBLISHED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
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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).
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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
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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.
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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.
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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).
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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
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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,
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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.
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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.
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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.
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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
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