Commonwealth of Kentucky, Transportation Cabinet, Department of Highways v. Romeo Delrosario

RENDERED: MARCH 17, 2023; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2021-CA-1487-MR
COMMONWEALTH OF KENTUCKY,
TRANSPORTATION CABINET,
DEPARTMENT OF HIGHWAYS APPELLANT
APPEAL FROM FLOYD CIRCUIT COURT
v. HONORABLE JOHNNY RAY HARRIS, JUDGE
ACTION NO. 19-CI-00324
ROMEO DELROSARIO APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: JONES, KAREM, AND LAMBERT, JUDGES.
KAREM, JUDGE: The Commonwealth of Kentucky, Transportation Cabinet,
Department of Highways (“the Cabinet”) appeals from the Floyd Circuit Court’s
order1 directing the Kentucky Claims Commission, now the Board of Claims,
(“KCC”) to award damages to Romeo Delrosario for injuries sustained in a
rockslide. Because the circuit court’s order was fully in accordance with its prior
order, which was never appealed and had become final, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Delrosario filed a claim against the Cabinet for damages he sustained
after he hit a rockslide on Route 321, north of Prestonsburg. The accident occurred
at approximately 5:00 a.m. on November 19, 2015, as he drove to work. The rocks
had fallen from the vertical cut face of a mountain situated immediately adjacent to
the road and they covered both lanes of travel. Although he swerved to avoid
some large rocks in the right lane, he hit a smaller rock in the left lane. Delrosario
was injured and his vehicle was damaged. Delrosario’s claim alleged the Cabinet
had been negligent in creating an improperly steep rock cut with no benching or
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The final order directing the KCC to award damages to Delrosario was entered on August 18,
2021. The Cabinet’s notice of appeal, however, designates the circuit court’s order of October
21, 2021, denying the Cabinet’s subsequent Kentucky Rules of Civil Procedure (“CR”) 59.05
motion to alter, amend, or vacate the August 18, 2021 order, as the order from which the appeal
is taken. “Orders granting or denying motions brought pursuant to CR 59.05 are non-final and
non-appealable[.]” Tax Ease Lien Investments 1, LLC v. Brown, 340 S.W.3d 99, 103 n.5 (Ky.
App. 2011) (quoting Mingey v. Cline Leasing Service, Inc., 707 S.W.2d 794, 796 (Ky. App.
1986)). In such a situation, “this Court applies a substantial compliance analysis, see Lassiter v.
American Exp. Travel Related Services Co., Inc., 308 S.W.3d 714, 718 (Ky. 2010), and, under
circumstances void of prejudice, considers the appeal properly taken from the final judgment that
was the subject of the CR 59.05 motion.” Id. Because the designation of the later order in the
notice has not led to any identifiable prejudice, we have determined that the Cabinet’s appeal
was properly taken from the underlying order of August 18, 2021.
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appropriate barriers. The only safety measures in place appeared to be unlit
warning signs along the route.
Following a hearing, the hearing officer issued findings of fact,
conclusions of law, and recommended order denying Delrosario’s claim. The
officer found that the Cabinet had not breached its duty of care, basing this
determination on evidence that the Cabinet had posted signs along Route 321
warning of potential rock falls, with one such sign located approximately half a
mile from the accident site; that the rock cut in question was adequately
constructed based on the standards in place when it was originally created in the
1930s or 1940s; and that the Cabinet had no actual notice of the rockslide. The
hearing officer acknowledged testimony that was offered regarding possible
preventative measures such as netting, fencing, and benching, and the need for
additional funding and legislation, but characterized the evidence as unnecessary
because it related to the Cabinet’s discretionary functions. Kentucky Revised
Statutes (“KRS”) 49.070(5) permits recovery from the Commonwealth before the
KCC only for the negligent performance of ministerial acts.
After finding no liability on the part of the Cabinet, the hearing officer
addressed the issue of damages. Damages awarded in cases brought before the
KCC are capped by statute at $250,000. See KRS 49.040(1) (“[A] single claim for
the recovery of money or a single award of money shall not exceed two hundred
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fifty thousand dollars ($250,000), exclusive of interest and costs.”). The hearing
officer reviewed the evidence presented by Delrosario’s witnesses, Dr. Ryan
Maynard, and Ernest Campbell. Dr. Maynard, a chiropractor, examined Delrosario
in May 2016 and February 2017 for purposes of preparing his claim. As of March
2, 2017, however, Dr. Maynard had provided no treatment or treatment
recommendations. Ernest Campbell, a tax preparer, offered evidence of
Delrosario’s lost wages attributable to the accident, based on a gross annual
income of $104,000. The hearing officer pointed out several flaws in Campbell’s
calculations, including a mistaken assumption that Delrosario was sixty-seven at
the time of the hearing in the spring of 2017 when he was actually sixty-nine, and
his inclusion of the year prior to the accident in his calculation of lost wages.
Notwithstanding these shortcomings in the evidence, the hearing
officer made the following finding regarding Delrosario’s damages: “[B]ased
upon what is in the record, there is a finding that the damages exceed the statutory
maximum of $250,000. However – as stated earlier – there is no finding of
liability against the Respondent [Cabinet].”
The KCC overruled Delrosario’s exceptions and entered the
recommended order as its final order.
Delrosario filed an appeal from the decision in Floyd Circuit Court on
May 22, 2019. Upon review, the circuit court determined, based on the evidence,
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that the Cabinet had constructive notice of a propensity to rock falls in the area of
the accident, that it had a duty to protect the public, and that the sufficiency of the
warnings it had provided was in dispute. The circuit court also expressed concern
about the finding that an unnecessary amount of time had been spent discussing
“discretionary functions” such as netting, fencing, benching, funding, and
legislation.
The circuit court remanded the case for a more specific finding
concerning the sufficiency of the warnings given by the Cabinet and the possible
remedial measures not addressed in the hearing. The court affirmed the finding of
the hearing officer regarding the testimony of Dr. Maynard and Mr. Campbell and
directed that the only matter that would need to be addressed by the hearing officer
on remand would be a claim for past medical expenses and property damage.
On remand, the hearing officer conducted a second hearing and issued
a second recommended findings of fact, conclusions of law, and order, in which he
incorporated the original findings of fact and conclusions of law and made
additional findings to the effect that there were sufficient warning signs in the
vicinity of the rockslide and that any remedial measures addressing potential rock
falls were discretionary rather than ministerial. He expressed concern that any
discretionary act of funding for purposes of benching or other remedial measures
would be “an expensive task that would pose a fiscal burden and is further
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complicated by geography.” Significantly, for purposes of this appeal, the order
adopted the previous analysis on damages “as if set forth verbatim.” It
recommended, based on the findings of fact and conclusions of law, that
Delrosario’s claim for damages be denied. The KCC denied Delrosario’s
exceptions and adopted the recommended order as the final order on April 18,
2019.
Delrosario appealed for a second time to the circuit court, which
entered an order on January 29, 2020, rejecting the final order of the KCC and
ruling that the Cabinet did not have sovereign immunity in the matter. It held that
the placement of warning signs in the area of the accident was not adequate and did
not meet the Cabinet’s duty of care. It further held that the Cabinet was on actual
notice of the high likelihood of rock falls occurring in the exact area where
Delrosario was injured and had taken no remedial measures, such as placing
appropriate lights or warnings, to correct the grave situation.
The circuit court noted that in its earlier order, remanding in part and
affirming in part, it ordered and adjudged that Delrosario’s damages exceeded the
statutory maximum. The circuit court stated that because the Cabinet had not
taken issue with or appealed from that decision, it had become final. The order
awarded Delrosario judgment against the Cabinet and remanded the matter for the
hearing officer to determine the amount of damages, which in the circuit court’s
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view appeared to be the statutory maximum, based upon the initial findings of the
hearing officer.
Delrosario and the Cabinet both filed motions to alter, amend, or
vacate. The circuit court denied the motions and entered a final order on July 29,
2020, which it designated as a final and appealable order with no just delay for its
entry.
Both sides filed motions for discretionary review before this Court,
which denied review for the following reasons:
Kentucky Revised Statutes (KRS) 49.150 allows for an
appeal from the Kentucky Claims Commission (“KCC”),
also known as the Board of Claims, to the circuit court of
the county where the hearing was held. In this case, the
Movant appealed the KCC’s decision to the Floyd Circuit
Court. That is considered a statutory appeal.
The Kentucky Constitution guarantees an appeal from
one court to the next level court, and a statutory appeal
from an administrative agency, like the KCC, does not
count as a matter of right appeal. See Vessels by Vessels
v. Brown-Forman Distillers Corp., 793 S.W.2d 795, 798
(Ky. 1990) (citing Ky. Const. Section 115). Furthermore,
KRS 49.160 expressly provides:
Appeals may be taken to the
Court of Appeals under the
same conditions and under the
same practice as appeals are
taken from judgments in civil
causes rendered by the Circuit
Court, but no motion for a new
trial or bill of exceptions shall
be necessary.
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Therefore, Movant should have filed a notice of appeal,
not a motion for discretionary review.
Following entry of this Court’s order, Delrosario sought summary judgment
against the Cabinet in the amount of $250,000, the statutory maximum under KRS
49.040, and costs and attorney’s fees. Delrosario contended that the circuit court’s
order holding that the Cabinet had failed to meet its duty of care and its award of
the statutory maximum of damages based on the finding of the hearing officer had
never been appealed and was consequently now final. The Cabinet responded that
the circuit court would be exceeding its authority in rendering such a decision
because a hearing on damages before the KCC was mandatory.
The circuit court entered an order on August 18, 2021, ruling that it
was not statutorily empowered to make an award of damages when the KCC had
refused to make one. It further determined, however, that it could direct the KCC
to enter an award commensurate with the unchallenged finding of the hearing
officer that the damages were in excess of the statutory limit of $250,000. This
appeal by the Cabinet followed.
STANDARD OF REVIEW
In reviewing a grant of summary judgment, we are required to
determine “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
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a matter of law. . . . Because summary judgment involves only legal questions and
the existence of any disputed material issues of fact, an appellate court need not
defer to the trial court’s decision and will review the issue de novo.” Lindsey v.
Board of Trustees of University of Kentucky, 552 S.W.3d 77, 87-88 (Ky. App.
2018) (internal quotation marks and citations omitted).
ANALYSIS
The Cabinet argues that the circuit court acted in excess of its
statutory authority under KRS 49.150 in reviewing the Board of Claims’ final
orders in this matter. The statute provides in relevant part as follows:
On appeal no new evidence may be introduced, except as
to fraud or misconduct of some person engaged in the
hearing before the board. The court sitting without a jury
shall hear the cause upon the record before it, and dispose
of the appeal in a summary manner, being limited to
determining: Whether or not the board acted without or
in excess of its powers; the award was procured by fraud;
the award is not in conformity to the provisions of KRS
49.040 to 49.180; and whether the findings of fact
support the award. The court shall enter its findings on
the order book as a judgment of the court, and such
judgment shall have the same effect and be enforceable
as any other judgment of the court in civil causes.
The Cabinet argues that the circuit court’s order exceeded the powers given to it by
the statute in numerous respects and that it was unauthorized to direct an award of
damages based on the hearing officer’s finding.
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The circuit court’s order of January 29, 2020, held that the Cabinet
had been negligent and awarded judgment to Delrosario. The order remanded the
matter solely for the hearing officer to determine the amount of damages, which,
based on the earlier, unchallenged finding of the hearing officer, exceeded the
statutory minimum of $250,000.
This order was never challenged on direct appeal and consequently
the issues resolved in that order have become res judicata. “[T]he doctrine of res
judicata (also known as the doctrine of the finality of judgments) is basic to our
legal system and stands for the principle that once the rights of the parties have
been finally determined, litigation should end. Thus, where there is an identity of
parties and an identity of causes of action, the doctrine precludes further litigation
of issues that were decided on the merits in a final judgment.” Whittaker v. Cecil,
69 S.W.3d 69, 71-72 (Ky. 2002) (citations omitted).
Thus, the Cabinet’s arguments that the circuit court exceeded its
authority under KRS 49.150(5) are precluded from our review because they could
have been raised on direct appeal from the earlier order. The Cabinet is in effect
seeking to bypass the finality of a judgment from which it failed to appeal and to
obtain appellate review of that decision. This approach is not permitted, because
“[a]n existing final judgment rendered upon the merits, without fraud or collusion,
by a court of competent jurisdiction, is conclusive of causes of action and of facts
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or issues thereby litigated, as to the parties and their privies, in all other actions in
the same or any other judicial tribunal of concurrent jurisdiction.” Bartley v.
Culbertson, 365 S.W.3d 593, 596 (Ky. App. 2012) (citations omitted).
Under the summary judgment standard, the circuit court correctly
found that in light of its earlier order there were no remaining genuine issues as to
any material fact and Delrosario was entitled to judgment as a matter of law. The
hearing officer’s finding that his damages exceeded the statutory maximum was
adopted in full by the KCC twice and never challenged by the Cabinet on direct
appeal. “Kentucky has for many years followed the rule that the decisions
of administrative agencies acting in a judicial capacity are entitled to the
same res judicata effect as judgments of a court.” Godbey v. University Hospital
of Albert B. Chandler Medical Center, Inc., 975 S.W.2d 104, 105 (Ky. App. 1998)
(citations omitted). “An administrative board acts in a judicial capacity when it
hears evidence, gives the parties an opportunity to brief and argue their versions of
the facts, and the parties are given an opportunity to seek court review of any
adverse findings.” Waldridge v. Homeservices of Kentucky, Inc., 384 S.W.3d 165,
170 (Ky. App. 2011) (quoting Nelson v. Jefferson County, Kentucky, 863 F.2d 18,
19 (6th Cir. 1988)). There is no question that the KCC acted in a judicial capacity
in this matter. Its adoption in full of the hearing officer’s finding regarding
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Delrosario’s damages is entitled the same res judicata effect as a judgment of the
court.
CONCLUSION
For the foregoing reasons, the circuit court’s order directing the KCC
to enter an award of damages in accordance with its earlier order is affirmed.
ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
Stacey D. Conley Jerry A. Patton
Pikeville, Kentucky Prestonsburg, Kentucky
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