Cathy Stone v. Dean Dairy Holdings, LLC D/B/A Dean Milk Company, LLC

RENDERED: JANUARY 14, 2022; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2017-CA-1179-MR
CATHY STONE, THROUGH EDWIN
STONE, IN HIS CAPACITY AS THE
EXECUTOR OF THE ESTATE OF
PLAINTIFF, CATHY STONE APPELLANT
ON REMAND FROM KENTUCKY SUPREME COURT
(FILE NO. 2019-SC-0047-DG)
APPEAL FROM JEFFERSON CIRCUIT COURT
v. HONORABLE BARRY WILLETT, JUDGE
ACTION NO. 15-CI-003483
DEAN DAIRY HOLDINGS, LLC,
d/b/a DEAN MILK COMPANY, LLC;
AND THOMAS PHILP APPELLEES
OPINION
REVERSING AND REMANDING
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BEFORE: CLAYTON, CHIEF JUDGE; COMBS AND JONES, JUDGES.
CLAYTON, CHIEF JUDGE: This case is before us on remand from the Kentucky
Supreme Court for further consideration in light of that Court’s recent decision in
Estate of Benton by Marcum v. Currin, 615 S.W.3d 34 (Ky. 2021). Upon further
review, we reverse the Jefferson Circuit Court’s order and remand for further
proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
Dean Dairy Holdings, LLC (“Dean Milk”) employed Cathy Stone.
On July 15, 2015, Ms. Stone filed an action against Dean Milk and Thomas Philp,
her former supervisor, based on her claims of discrimination, retaliation, and
intentional infliction of emotional distress. Dean Milk and Mr. Philp removed the
case to the United States District Court for the Western District of Kentucky on
August 10, 2015, alleging that Ms. Stone had fraudulently included Mr. Philp as a
party to the action to prevent the federal court from having diversity jurisdiction.
Thereafter, on September 5, 2015, while briefing was underway as to
why the federal court should remand the case to Jefferson Circuit Court, Ms. Stone
passed away. On December 13, 2015, Ms. Stone’s counsel filed a statement with
the federal court pursuant to Federal Rule of Civil Procedure (“FRCP”) 25(a),
noting Ms. Stone’s death. Ms. Stone’s counsel served the statement on all parties.
On December 21, 2015, Carl Edwin Stone, Ms. Stone’s husband, filed a motion
with the federal court to substitute himself as the named plaintiff in the action,
again in compliance with FRCP 25(a). On March 21, 2016, the federal court
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granted Mr. Stone’s motion for substitution, with the order’s caption indicating that
Mr. Stone, in his representative capacity, replaced Ms. Stone as the named party.
Ten days later, the federal court remanded the case back to Jefferson
Circuit Court on the basis that Ms. Stone had a colorable claim for retaliation
against Mr. Philp. On September 14, 2016, a few days after the first anniversary of
Ms. Stone’s death, Dean Milk and Mr. Philp filed a motion with the circuit court
under Kentucky Rule of Civil Procedure (“CR”) 12.02(f) to dismiss the lawsuit,
alleging that Mr. Stone, as the executor of Ms. Stone’s estate (the “Estate”), had
failed to file an application for revival of the action within one year of Ms. Stone’s
death as required under Kentucky Revised Statutes (KRS) 395.278. The Estate did
not file a motion to revive the action under KRS 395.278 with the trial court until
January 26, 2017, over sixteen months after Ms. Stone’s death.
The trial court granted the motion, finding that it must dismiss Ms.
Stone’s claims because the Estate had failed to properly revive the action in
accordance with KRS 395.278 and in contravention of the statute’s one-year
statute of limitations. The Estate thereafter filed a motion to alter, amend, or
vacate the trial court’s ruling, which the trial court overruled.
This appeal followed, with the Estate arguing that: (1) Mr. Stone was
substituted correctly under the federal rules while the case was pending in federal
court, making a motion for revival under KRS 395.278 unnecessary under the
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Rules Enabling Act, 28 United States Code (U.S.C.) § 2072; (2) if this Court found
that revival was necessary under KRS 395.278, Mr. Stone’s motion for substitution
under the federal rules was sufficient to revive the action for purposes of KRS
395.278; and (3) if Mr. Stone’s motion for substitution under the federal rules was
insufficient to revive the action, Kentucky’s tolling statute applied and extended
the time for the Estate to file a separate motion to revive.
ANALYSIS
We originally held in this appeal that, because KRS 395.278 and
FRCP 25 did not conflict, any analysis under the Rules Enabling Act was
unnecessary; that the Estate was required to file a motion in accordance with KRS
395.278 to revive Ms. Stone’s claim; that Mr. Stone’s motion for substitution
under FRCP 25 was not adequate to serve as an application for revival under KRS
395.278; and that the provisions of KRS 413.270 did not toll the un-revived action.
The Supreme Court thereafter granted discretionary review, vacated
our decision, and remanded for our reconsideration under the subsequently-decided
Currin case. In Currin, the Kentucky Supreme Court held that “KRS 395.278 is a
statute of limitation, and . . . a motion for substitution properly filed with the court
in accordance with CR 25.01(1) within the one-year allotted by the legislature
constitutes revival.” 615 S.W.3d at 39 (emphasis added). Thus, while the revival
statute – or KRS 395.278 – “grant[ed] a substantive right to the would-be litigant,
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. . . CR 25.01 was the appropriate procedural means by which it was to be
achieved.” Id. at 37 (citing Daniel v. Fourth & Market, Inc., 445 S.W.2d 699, 701
(Ky. 1968)).
Consequently, according to the Kentucky Supreme Court’s decision in
Currin, a litigant need not make a separate motion for revival under KRS 395.278.
615 S.W.3d at 37. Because Mr. Stone took the appropriate steps under federal law
to substitute himself as a party in his representative capacity, because Mr. Stone’s
motion for substitution was ultimately granted by the federal court while the case
was still pending in federal court, and because no separate motion for revival was
required, we find that Mr. Stone properly complied with all the applicable
substitution requirements. Id. at 39; see also Boggs v. Blue Diamond Coal Co.,
497 F. Supp. 1105, 1107 (E.D. Ky 1980).
CONCLUSION
Accordingly, we reverse the circuit court’s order granting Dean
Milk’s motion to dismiss for failure to revive and denying the Estate’s motion to
substitute and revive. Further, we remand this matter to the circuit court for
findings of fact and conclusions of law concerning Dean Milk’s partial motion to
dismiss Ms. Stone’s claims for retaliation and intentional infliction of emotional
distress against Dean Milk and Mr. Philp, which the circuit court had originally
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denied as moot based on its decision to grant Dean Milk’s motion to dismiss for
failure to revive.
ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEES:
John S. Friend John O. Sheller
Robert W. “Joe” Bishop Steven T. Clark
Tyler Z. Korus Louisville, Kentucky
Louisville, Kentucky
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