RENDERED: MAY 3, 2024; 10:00 A.M.

NOT TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2022-CA-1431-MR

CSX TRANSPORTATION, INC. APPELLANT 

v. 

APPEAL FROM GREENUP CIRCUIT COURT

HONORABLE JOHN F. VINCENT, JUDGE

ACTION NO. 18-CI-00348

DANIEL J. CAREY, II, D.C.; CAREY 

CHIROPRACTIC AND 

REHABILITATION, INC.; AND 

SHANNON M. JOHNSON, D.C. D/B/A 

JOHNSON CHIROPRACTIC APPELLEES 

AND

NO. 2022-CA-1477-MR

CRAIG HELIGMAN, M.D. APPELLANT 

v. 

APPEAL FROM GREENUP CIRCUIT COURT

HONORABLE JOHN F. VINCENT, JUDGE

ACTION NO. 18-CI-00348

DANIEL J. CAREY II, D.C.; CAREY 

CHIROPRACTIC AND 

REHABILITATION, INC.; AND 
-2-

SHANNON M. JOHNSON, D.C. D/B/A 

JOHNSON CHIROPRACTIC APPELLEES 

OPINION

VACATING AND REMANDING

**   **  **

BEFORE: THOMPSON, CHIEF JUDGE; KAREM AND MCNEILL, JUDGES.

THOMPSON, CHIEF JUDGE: CSX Transportation, Inc. and Dr. Craig Heligman

appeal from a judgment of the Greenup Circuit Court which found that the 

appellants had defamed the appellees. Appellants raise numerous issues on appeal. 

After reviewing the record and the law, we conclude that the trial court made two 

errors regarding the jury instructions and one evidentiary error. We also conclude 

that Dr. Heligman was not properly served in this action and should have been 

dismissed from the case. We vacate and remand for a new trial. 

FACTS AND PROCEDURAL HISTORY

In 2017, Dr. Heligman was the Chief Medical Officer of CSX. One of 

Dr. Heligman’s responsibilities was to receive Certificates of Ongoing Injury or 

Illness (COII) forms. These forms would be sent to Dr. Heligman’s office from 

medical practitioners and would indicate that a CSX employee would need time off

from work due to injury or illness. Over several weeks in June of 2017, Dr. 

Heligman received COIIs for around seventy employees at CSX’s Huntington, 
-3-

West Virginia mechanical facility. These COIIs were almost identical and came 

from two chiropractic practitioners, Dr. Daniel Carey and Dr. Shannon Johnson. 

The COIIs indicated that the employees had sustained musculoskeletal injuries 

outside of work and would need two months off to recover. Dr. Heligman testified 

that the amount of COIIs coming from two practitioners in that time frame was 

unusual. The COIIs were also received around the same time that furloughs were 

to be announced for that area. 

When an employee is furloughed, CSX pays their health and welfare 

benefits. Also, the Railroad Retirement Board (RRB), a federal agency, pays the 

furloughed employee 60% of his or her compensation, and a private insurance plan 

through Aetna pays the other 40% of the furloughed employee’s compensation. 

Normally, a furloughed employee receives four months of benefits and 

compensation; however, an employee who was on medical leave at the time of 

being furloughed can receive up to two years of benefits and compensation.

Dr. Heligman believed the high number of COIIs received around the 

time of the furlough announcement was suspicious. He drafted a letter, dated July 

14, 2017, and sent it to the Office of the Inspector General of the RRB. This letter 

is the basis for the underlying lawsuit; therefore, we will include it in this Opinion. 

The letter stated as follows:

I [am] writing to inform you of my concern about the 

practices of two chiropractic physicians that provide 
-4-

services to CSX employees in the Huntington, WV area. 

They have both provided services in the region for a long 

time, and we have received numerous documents from 

them in the course of our normal review of medical 

fitness for duty issues related to our employees. In the 

past; we had suspicions that the providers were removing 

our employees from work inappropriately and potentially 

in relationship to business changes in the region that may 

have resulted in furloughs or reduced work hours. It was 

thought that the employees were reporting injuries while 

off duty and seeking out these providers for the purpose 

of inappropriately seeking benefits to offset potential 

wage losses.

In my professional medical opinion, both of these 

providers continued to keep employees off work for 

much longer than is medically appropriate. These 

conditions would be considered minor musculoskeletal 

injuries that generally would resolve without any 

treatment, without more than a few weeks away from 

work, or with no more than a couple of weeks of 

chiropractic care. Therefore, their practices are also 

highly suspicious for excessive and inappropriate 

treatment.

Although we had suspicions, we were not able to identify 

patterns that were clearly fraudulent. Recently, we had a 

significant change in business in the area with facility 

closures and work reductions. Concurrent with the 

announcing of these business changes, we received 

doctor’s notes withholding over fifty employees from 

work between June 19 and July 12, 2017. The list of 

employees has been expanding daily.

In my opinion, the timing of these alleged injuries and 

the volume of cases that spiked just at this time is highly 

suspicious and suggestive of fraudulent practices on the 

part of both the employees and these two providers. I 

have attached a list of the employees who have submitted 

notes in the time period identified. Some are extensions 
-5-

of cases started several months to a year earlier, some 

have no prior events in our records, and a few had 

recently been cleared to work by these providers but 

coincidentally had recurrences at the time the business 

changes were announced. However, all forms were 

submitted within the same short time period.

The two providers of concern are: [Shannon Johnson and 

Daniel Carey.]

I strongly urge you to fully investigate all of these cases 

for potential conspiracy to defraud RRB sickness and 

disability benefit programs by our employees and their 

chiropractors. I will also be notifying the appropriate 

licensing boards and health insurance companies so that 

they may initiate their own investigations.

Please do not hesitate to contact me for any additional 

information that may be of assistance in your 

investigation.

Included with the letter was a list of employees who had received medical care 

from Drs. Carey and Johnson. An identical letter was sent to the Fraud, Waste, and 

Abuse Investigations Departments of the following insurance companies: Aetna, 

Inc., Highmark Blue Cross Blue Shield, and United Health Care. In addition, the 

letter was sent to the Kentucky and Ohio Chiropractic Boards. About a month

after the letter was sent, CSX informed its employees and Appellees that it would 

no longer accept COIIs from Appellees. 

On July 12, 2018, Appellees brought the underlying cause of action. 

Appellees sued Appellants for defamation per se, based on the allegations in the 

letter, and for tortious interference with prospective economic advantage, based on 
-6-

refusing to accept COIIs from Appellees.1 Appellees also sought punitive 

damages.2

On August 8, 2018, Appellants removed the case to the United States

District Court for the Eastern District of Kentucky. In its notice of removal, 

Appellants claimed that Dr. Heligman, along with other individually named 

defendants, had not been served in the matter. Dr. Heligman later moved to be 

dismissed from the case for failure to perfect service. In January of 2019, the 

federal case was remanded to the Greenup Circuit Court for lack of federal 

jurisdiction. The service issue was not resolved before remand. After remand, 

counsel for Appellees requested that counsel for CSX accept service on behalf of 

Dr. Heligman and the other defendants who claimed to have not been served. 

CSX’s counsel declined. Appellees did eventually serve some of the other 

defendants, but did not serve Dr. Heligman. 

Motion practice and discovery then commenced in the circuit court for 

the next four years. During that time, motions for summary judgment were made 

and Dr. Heligman again raised the lack of service issue. Other than dismissing the 

other named defendants, the motions for summary judgment were denied. In 

1 CSX did not refuse to allow employees to see or treat with Appellees; however, refusing to 

accept COIIs from those doctors had the effect of stopping employees from treating with those 

doctors. 

2 Other defendants were named in the lawsuit and an additional claim was raised; however, the 

other defendants were dismissed prior to trial and the other claim was dismissed during trial.
-7-

addition, the court ruled that, even though Dr. Heligman was not properly served, 

he had responded to a request for admissions during the discovery period; 

therefore, he waived the service issue.

A three-day jury trial was held on September 19, 21, and 22 of 2022. 

At the end of the trial, the jury returned verdicts in favor of Appellees. The jury 

awarded Dr. Carey and Dr. Johnson $350,000 each on the defamation claim. The 

jury also awarded Dr. Carey $260,000 for the tortious interference claim. Dr. 

Johnson received $455,000 for that claim. The jury also awarded Dr. Carey and 

Dr. Johnson $10.7 million each in punitive damages. Appellants filed motions to 

alter, amend, or vacate, in which Dr. Heligman again raised the service issue. The 

court denied the motions and specifically found that Dr. Heligman’s interests had 

been protected during the beginning stages of the case by CSX and its counsel. 

These appeals followed.

ANALYSIS

Appellants’ first argument on appeal is that the trial court erred in not 

granting summary judgment or a directed verdict in their favor for the defamation 

claims. Appellants claim that Dr. Heligman’s letter was pure opinion and the 

statements therein were absolutely privileged. 

Defamation is, generally, “the injury to the 

reputation of a person in public esteem.” A prima facie 

case of slander, or [] defamation, requires proof of four 

elements: (1) defamatory language, (2) about the 
-8-

plaintiff, (3) which is published, and (4) which causes 

injury to reputation. The alleged defamatory words must 

be construed in their most natural meaning and 

“measured by the natural and probable effect on the mind 

of the average [listener].”

Cromity v. Meiners, 494 S.W.3d 499, 502 (Ky. App. 2015) (citations omitted). 

[A] defamation claim may be defeated by assertion of a 

“privilege.” A privilege is recognized as a defense to a 

defamation claim; the defense may be either absolute or 

qualified. An absolute privilege affords a defendant a 

complete defense to a claim of defamation; whereas, a 

qualified privilege only affords a defendant a conditional 

defense to a claim of defamation.

Smith v. Martin, 331 S.W.3d 637, 640 (Ky. App. 2011). We review defamation 

privilege issues de novo. Id. 

A defamatory communication may consist 

of a statement in the form of an opinion, but 

a statement of this nature is actionable only 

if it implies the allegation of undisclosed 

defamatory fact as the basis for the opinion.

The key distinction is between statements which are 

“pure” opinion and statements which are “mixed” 

expressions of opinion.

“Pure opinion, which is absolutely 

privileged, occurs where the commentator 

states the facts on which the opinion is 

based, or where both parties to the 

communication know or assume the 

exclusive facts on which the comment is 

clearly based. In contrast, the mixed type is 

apparently based on facts regarding the 

plaintiff or his conduct that have not been 
-9-

stated by the defendant or assumed to exist 

by the parties to the communication.”

With mixed opinion, the defendant is subject to liability 

if the listener draws the reasonable conclusion that the 

opinion expressed by the speaker must have been based 

on undisclosed defamatory facts.

Cromity, 494 S.W.3d at 502-03 (citations omitted). “It is an elementary principle 

of the law of libel that the defamatory matter complained of should be construed as 

a whole.” McCall v. Courier-Journal and Louisville Times Co., 623 S.W.2d 882, 

884 (Ky. 1981) (citations omitted).

Here, Appellants argue that Dr. Heligman’s letter was pure opinion 

and absolutely privileged because the letter used words like “potential conspiracy 

to defraud” and “in my opinion.” In addition, Appellants claim that the letter 

included the facts that substantiated the opinion, the list of names of employees 

who treated with Drs. Carey and Johnson. Appellants argue they were entitled to 

summary judgment or a directed verdict and the defamation claim should not have 

gone to the jury.

The trial court believed there were issues of fact that needed to be 

determined by the jury and absolute privilege did not apply. We agree with the 

trial court because the letter was not an example of pure opinion, but mixed 

opinion. While the letter did use opinion-like statements, such as “potential” and 

“in my opinion,” it also claimed that the doctors were keeping employees off work 
-10-

longer than necessary and that they were providing “excessive and inappropriate 

treatment.” This was an allegation of fraudulent and unethical activity, but the 

letter provided no facts or evidence to support this claim. Additionally, the letter 

indicated that Drs. Carey and Johnson might be involved in a conspiracy with 

some employees to fraudulently receive extended benefits. While the letter did 

include a list of employees who treated with those doctors, this is not, by itself, 

strong factual evidence of inappropriate activity. In summary, the letter provided 

allegations of fraudulent activity on the part of the doctors, but did not support 

those allegations with facts. 

Examining the letter as a whole, it would not be unreasonable for the 

reader of the letter to assume the allegations were based on undisclosed facts. 

While the letter used terms and phrases suggesting it was pure opinion, there were 

no facts to support the claims raised. Dr. Heligman testified that, at the time he 

wrote his letter, he had no evidence of a conspiracy, no statistical evidence to 

suggest the spike in COIIs was unusual, and that he had no reason to doubt the 

truthfulness of the information supplied by the COIIs. Dr. Heligman’s letter 

provided little to no factual support for his statements; therefore, this was not a 

case of pure opinion and the trial court did not err in allowing the jury to decide the 

issue.
-11-

Appellants’ next argument is that, even if the letter was not pure 

opinion, it was still entitled to qualified privilege. 

In certain circumstances . . . otherwise defamatory-per-se 

communications are allowed because the societal interest 

in the unrestricted flow of communication is greater than 

the private interest. Specifically, we have recognized a 

privilege for individuals communicating “where the 

communication is one in which the party has an interest 

and it is made to another having a corresponding 

interest.”

Toler v. Süd-Chemie, Inc., 458 S.W.3d 276, 282-83 (Ky. 2014), as corrected (Apr. 

7, 2015) (footnotes and citations omitted). This is qualified privilege.

What, then, is the impact of the qualified privilege 

on a plaintiff’s claim of defamation per se? . . . 

Ordinarily, because the law does not presume an 

individual’s misconduct, the falsity of defamatory 

statements is presumed. In addition, malice is presumed 

in the defamatory-per-se context. The qualified 

privilege, however, negates this presumption. The result: 

“false and defamatory statements will not give rise to a 

cause of action unless maliciously uttered”; or, perhaps 

better stated, despite the law’s presumption of malice 

“where publications are [defamatory] per se, yet where 

the publication is made under circumstance disclosing 

qualified privileges, it is relieved of that presumption and 

the burden is on the plaintiff to prove actual malice.”

The qualified privilege is just that: qualified. Not 

an absolute defense, the privilege’s protection can be lost 

through unreasonable actions amounting to abuse.

Indeed, the party asserting a qualified privilege may still 

be responsible for falsehoods if both actual malice and 

falsity are affirmatively shown. The qualified privilege 

operates to allow defendants the necessary latitude to 

communicate freely while maintaining accountability 
-12-

when the defendant operates outside of or contrary to the 

privilege. In this context, accordingly, actual malice

refers to “malice in fact” – read: malevolence or ill will. 

A defendant who enjoys the qualified privilege may 

make defamatory statements, “unless maliciously 

uttered.” Our case law and the relevant treatises – by 

focusing on the utterance of the defamatory statement 

rather than its veracity – evidence this distinction. With 

the qualified privilege, it is not so much what was said as 

it is how it was said. After all, the qualified privilege will 

provide protection despite a statement’s falsity, 

assuming, of course, the privilege is not abused.

Abuse of the qualified privilege may be shown in a 

several ways, some indicating ill will or maliciousness 

more directly than others. These include: (1) “the 

publisher’s knowledge or reckless disregard as to the 

falsity of the defamatory matter”; (2) the “publication of 

the defamatory matter for some improper purpose”; (3) 

“excessive publication”; or (4) “the publication of 

defamatory matter not reasonably believed to be 

necessary to accomplish the purpose for which the 

occasion is privileged.”

The burden of showing such abuse of privilege is 

the plaintiff’s. Indeed, “it [ ] falls upon plaintiff to defeat 

this defense by a showing that either there was no 

privilege under the circumstances or that it had been 

abused.”

Id. at 283-84 (footnotes and citations omitted) (emphasis in original).

Here, Appellants submitted a proposed jury instruction to the court 

regarding qualified privilege. The court declined to give the instruction because it 

found that Dr. Heligman sent the letter to inappropriate entities, namely the 
-13-

insurance companies and the licensing boards.3 The court believed Appellants 

were not entitled to the instruction due to the evidence presented.

We have two standards of review for jury instruction issues. “When 

the question is whether a trial court erred by: (1) giving an instruction that was not 

supported by the evidence; or (2) not giving an instruction that was required by the 

evidence; the appropriate standard for appellate review is whether the trial court 

abused its discretion.” Sargent v. Shaffer, 467 S.W.3d 198, 203 (Ky. 2015),

overruled on other grounds by University Medical Center, Inc. v. Shwab, 628 

S.W.3d 112 (Ky. 2021). We can also review jury instructions de novo when the 

issue is “the substantive content of the jury instructions[.]” Id. at 204. In other 

words, if a judge decides to give a jury instruction, we review the instruction de 

novo to determine if the instruction correctly sets forth the law. 

We believe the trial court erred as to this issue because the evidence 

supported giving the qualified immunity instruction. As this concerns an 

erroneous decision regarding whether to give an instruction, we review for an 

abuse of discretion. Id. at 203. “The test for abuse of discretion is whether the 

trial judge’s decision was arbitrary, unreasonable, unfair, or unsupported by sound 

legal principles.” Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999). 

We believe the trial court erred in finding that Dr. Heligman sent the letter to

3

In other words, the court found “excessive publication.”
-14-

inappropriate entities. Dr. Heligman testified that, at the time he wrote the letter,

he was suspicious that Appellees were engaged in fraudulent activity. He then sent 

the letter to those entities who could investigate this alleged suspicious activity and 

asked for such an investigation. All of the entities had a common interest in 

determining if Appellees were committing fraud. Toler, 458 S.W.3d at 282-83. 

The RRB and Aetna both paid benefits to employees; therefore, they would be 

interested to know if these benefits were being unjustly provided. The other 

insurance companies would also be interested to know if their insureds were 

receiving unnecessary treatment, leading to unnecessary insurance payments to 

Drs. Carey and Johnson. Finally, the licensing boards of Kentucky and Ohio 

would be interested in knowing if two doctors that they license were engaged in 

unethical activity. These interests correspond with the interests of Dr. Heligman 

and CSX, to determine whether or not CSX employees were trying to defraud the 

benefits system, a portion of which CSX pays for, with the help of Drs. Carey and 

Johnson. 

Appellants were entitled to raise the issue of qualified privilege. 

Appellees were then required to show that there was actual malice in the 

publishing of the letter or that the privilege was abused. Id. at 283-84. Whether 

Appellees can defeat this privilege will require an examination of the facts and 

should have been given to the jury to determine. Columbia Sussex Corp., Inc. v.
-15-

Hay, 627 S.W.2d 270, 276 (Ky. App. 1981). Because the trial court erred in not 

allowing Appellants to utilize the qualified privilege defense, a new trial is 

warranted on this issue.4

Appellants’ next argument on appeal is that they are entitled to a 

judgment on the tortious interference with prospective economic advantage claim.5 

In the alternative, they argue they are entitled to a new trial on the issue. 

Appellants claim that they had a legitimate reason to stop accepting COIIs from 

Appellees, namely, to stop benefits fraud.

Tortious interference with [prospective economic 

advantage] requires: (1) the existence of a valid business 

relationship or expectancy; (2) that the defendant was 

aware of this relationship or expectancy; (3) that the 

defendant intentionally interfered; (4) that the motive 

behind the interference was improper; (5) causation; and 

(6) special damages. Tortious interference with 

[prospective economic advantage] does not require the 

existence of a contract. Interference which prevents the 

making of future contracts is the equivalent of 

interference which induces the breach of an existing 

contract.

[I]t is clear that to prevail [on a claim for tortious 

interference with prospective contractual 

relations/business advantage] a party seeking recovery 

must show malice or some significantly wrongful 

conduct. The context and the course of the decisions 

4

In a post-trial order, the court indicated that the privilege was not available to Appellants 

because there was no common interest between CSX, Dr. Heligman, and the recipients of the 

letter. While this is a different reason as stated by the court at an earlier time, we have discussed 

why we believe there was a common interest.

5 Also known as tortious interference with business relations and tortious interference with 

prospective contractual relation. 
-16-

make it clear that what is meant is not malice in the sense 

of ill will but merely intentional interference without 

justification. This analysis turns primarily on motive.

PBI Bank, Inc. v. Signature Point Condominiums LLC, 535 S.W.3d 700, 715 (Ky. 

App. 2016) (internal quotation marks and citations omitted).

Our law is clear that a party may not recover under 

the theory presented in the absence of proof that the 

opposing party “improperly” interfered with his 

[prospective economic advantage]. To determine 

whether the interference is improper, [Restatement 

(Second) of Torts § 767 (1979)] sets forth seven factors 

to be considered by the court in ruling on the motion for 

directed verdict and, if the case is submitted, considered 

by the jury. Unless there is evidence of improper 

interference, after due consideration of the factors 

provided for determining such, the case should not be 

submitted to the jury. Even if evidence is presented 

which would otherwise make a submissible case, the 

party whose interference is alleged to have been 

improper may escape liability by showing that he acted in 

good faith to assert a legally protected interest of his 

own. While the party seeking recovery bears the burden 

of proving that the interference was improper, the party 

asserting a right to protect his own interest bears the 

burden of proving his defense.

National Collegiate Athletic Ass’n By and Through Bellarmine College v.

Hornung, 754 S.W.2d 855, 858 (Ky. 1988). Those seven factors are:

(a) the nature of the actor’s conduct,

(b)the actor’s motive,

(c) the interests of the other with which the actor’s

conduct interferes,
-17-

(d)the interests sought to be advanced by the actor,

(e) the social interests in protecting the freedom of action

of the actor and the contractual interests of the other,

(f) the proximity or remoteness of the actor’s conduct to

the interference and

(g) the relations between the parties.

RESTATEMENT (SECOND) OF TORTS § 767 (1979).

Appellants argue that they provided evidence that they were seeking 

to protect their own interests and that their motive was not improper. Appellants 

cite to Hornung, supra, and Cullen v. South East Coal Co., 685 S.W.2d 187 (Ky. 

App. 1983), for the proposition that protecting one’s health care plan from

fraudulent activity is a legitimate business interest. Appellants argue as that is

what they were doing in this case, they were acting in good faith.

Appellants are correct that this Court in Cullen found that protecting a

health care plan is a legitimate business interest. Id. at 190. If that is the case, it is

not so far-fetched to believe Appellants’ actions were also a legitimate business

interest. Appellants testified that they believed there could be a fraud being

perpetrated by Appellees and were seeking to protect their benefits system. Here,

the trial court gave the jury an instruction on the tortious interference with 

prospective economic advantage claim, but did not include anything regarding the 

protecting of a legitimate business interest. Appellants requested the legitimate 
-18-

business interest issue be included in the jury instructions, but the trial court 

believed it was not necessary to include that language.

First, we do not believe Appellants were entitled to summary 

judgment or a directed verdict on the tortious interference claim. There was 

sufficient evidence to give the issue to the jury because CSX stopped accepting 

COIIs from Appellees and Appellees put on evidence that this was based on no 

more than a hunch. In addition, evidence was presented at trial that some of the 

investigative bodies who received Dr. Heligman’s letter informed Appellants that, 

after reviewing the situation, they found no wrongdoing. Despite this notification, 

CSX continued to refuse to accept COIIs from Appellees. This issue properly 

went to the jury because there were material issues of fact that required a jury 

decision.

We also believe, however, that Appellants properly requested the 

good faith “protecting a business interest” language be included the jury 

instruction. As this issue concerns a potentially incorrect jury instruction, we 

review it de novo. Sargent, 467 S.W.3d at 204. We believe that the trial court 

erred in not including the “protecting a business interest” defense in the jury 

instruction. Based on Cullen and the evidence provided at trial, this should have 

been included. Cullen held that protecting an employee health plan was a 

legitimate business interest that could be protected and some evidence indicated 
-19-

Appellants believed they were protecting CSX’s interests. Whether Appellants’

actions were done in good faith is a factual one that should have been decided by 

the jury. This issue also requires a new trial due to this error.

Appellant’s next argument on appeal is that the trial court erred in 

excluding evidence regarding the employee disciplinary process. The CSX 

employees that Appellants believed might be trying to defraud the company were 

given hearings in front of a board. The employees were entitled to this hearing 

pursuant to their collective bargaining agreement. These hearings were similar to 

arbitration and allowed CSX and the employees to show what evidence was 

gathered during the investigation and what actions CSX took. At the conclusion of 

the hearings, some employees were terminated from their employment for 

dishonesty. Appellants sought to introduce the outcomes of the hearings into 

evidence to help prove that Dr. Heligman was right to be suspicious.6

The trial court excluded the evidence of the outcome of the hearings 

because they happened long after Dr. Heligman wrote his letter. The trial court 

believed that the only evidence that was relevant was what was known at the time 

the letter was written. In other words, the truthfulness of the statements in Dr. 

6 The trial court allowed Appellants to present evidence of the internal investigation performed 

by CSX, but not evidence of the outcome of the hearings.
-20-

Heligman’s letter and the reasonableness of CSX’s actions had to be judged at the 

time they were made. 

The proper standard for review of evidentiary rulings is abuse of 

discretion. Goodyear Tire and Rubber Co. v. Thompson, 11 S.W.3d 575, 577 (Ky. 

2000). We do not believe the trial court erred here. We agree that the outcomes of 

the hearings are irrelevant because they had no bearing on Dr. Heligman’s letter or 

what he and CSX believed at that time. The court’s decision was reasonable. 

Appellants also argue that the court erred in revealing to the jury 

CSX’s operating income. At the close of evidence, the judge stated to the jury, “in 

2017, the defendant, CSX Transportation, reported operating income of

$3,325,000,000.” This was part of a stipulation produced during discovery. That 

number was then used by Appellees to try and justify a large punitive damages 

award. 

“It has been the law of this Commonwealth for almost one hundred 

years that in an action for punitive damages, the parties may not present evidence 

or otherwise advise the jury of the financial condition of either side of the 

litigation.” Hardaway Management Co. v. Southerland, 977 S.W.2d 910, 916 (Ky. 

1998) (footnote and citations omitted). 

[N]o evidence as to the financial condition of either 

defendant or plaintiff should be admitted in any case in 

which punitive damages might be recovered because 

[t]he tendency of this class of testimony would be to lead 
-21-

the jury to consider chiefly the pecuniary condition of the 

defendant, rather than the enormity or wantonness of the 

act for which punitive damages might be allowed.

Sand Hill Energy, Inc. v. Smith, 142 S.W.3d 153, 167 (Ky. 2004) (footnote, 

citation, and internal quotation marks omitted).

The issue here revolves around an apparent miscommunication. It is 

not entirely clear from the record, but, after reviewing statements made by the 

parties’ attorneys on the record, it appears as though Appellees thought they were 

asking CSX for information regarding its profits for 2017, but CSX believed 

Appellees were asking for its operating income. What is clear from the record is 

the stipulation itself, which we have reviewed. The stipulation states that the 2017 

operating income was $3,325,000,000. The stipulation also states that this was 

agreed to by the parties, but that CSX “does not stipulate to the admissibility of 

this information at trial.” In other words, CSX gave Appellees the information 

they requested; however, disputed whether it could be used at trial.

This issue is relevant because Kentucky Revised Statutes (KRS) 

411.186(2)(c) states that the “profitability of the misconduct to the defendant” is a 

factor to be considered when determining punitive damages. We believe the trial 

court erred in this instance. CSX’s operating costs are not similar to the 

profitability of the alleged misconduct in this case. Based on the wording of the 

stipulation, KRS 411.186(2)(c), and the cases cited above, it was an abuse of 
-22-

discretion to read this stipulation to the jury. The court shall take this into account 

on remand.

Appellants also raise issues regarding the punitive damages awarded 

in this case. As we are vacating the judgment and remanding for a new trial, we 

decline to address these issues as they may not appear again on remand.

The final issue we must discuss concerns the service of process for 

Dr. Heligman. There is no dispute that Dr. Heligman was not served with a 

summons or complaint at the beginning of this case. Even the trial court 

acknowledged this in a pre-trial hearing and a post-trial order; however, the court 

believed Dr. Heligman waived the issue by responding to a request for admissions. 

The question we must answer is, did Dr. Heligman waive this defense?

Kentucky Rules of Civil Procedure (CR) 12.02 states in relevant part:

Every defense, in law or fact, to a claim for relief in any 

pleading, whether a claim, counterclaim, cross-claim, or 

third-party claim shall be asserted in the responsive 

pleading thereto if one is required, except that the 

following defenses may at the option of the pleader be 

made by motion: (a) lack of jurisdiction over the subject 

matter, (b) lack of jurisdiction over the person, (c) 

improper venue, (d) insufficiency of process, (e) 

insufficiency of service of process, (f) failure to state a 

claim upon which relief can be granted, and (g) failure to 

join a party under Rule 19. A motion making any of 

these defenses shall be made before pleading if a further 

pleading is permitted. No defense or objection is waived 

by being joined with one or more defenses or objections 

in a responsive pleading or motion.
-23-

CR 12.08(1) states:

A defense of lack of jurisdiction over the person, 

improper venue, insufficiency of process, or 

insufficiency of service of process is waived . . . if it is 

neither made by motion under Rule 12 nor included in a 

responsive pleading or an amendment thereof permitted 

by Rule 15.01 to be made as a matter of course.

Dr. Heligman first raised the lack of service defense when the case 

was removed to the federal court. The motion for removal to federal court noted 

that Dr. Heligman had not been served and Dr. Heligman later made a motion to 

dismiss based on lack of service. Unfortunately, that court did not rule on the 

issue. In addition, after remand from the federal court, the attorney for CSX 

refused to accept service on Dr. Heligman’s behalf. 

Dr. Heligman also raised the issue four times before the Greenup 

Circuit Court: in a motion for summary judgment, in a pre-trial memorandum, in 

his answer, and in a post-trial motion to alter, amend, or vacate. It appears to this 

Court that Dr. Heligman informed Appellees and both courts that he had not been 

served.

Appellees argue that Dr. Heligman waived service by filing an expert 

witness disclosure and answering a request for admissions. These two acts 

occurred after remand to the circuit court and during discovery, but before he 

raised the service issue again via a motion. We believe, based on the specific facts 

of this case, there was no waiver. Taking additional steps after raising an 
-24-

insufficiency of service of process defense does not waive that defense. See

Weant’s Adm’r v. Ellis, 287 S.W.2d 446, 448 (Ky. 1955). Here, Dr. Heligman 

raised the issue with the federal court and made his defense known. Only after this 

did he file an expert witness disclosure list and submit answers to a request for 

admissions. 

In addition, we do not believe an expert witness disclosure would be a 

pleading that would need to raise the defense as required by CR 12.02 and CR 

12.08. A pleading is defined as: “A formal document in which a party to a legal 

proceeding (esp. a civil lawsuit) sets forth or responds to allegations, claims, 

denials, or defenses.” Pleading, BLACK’S LAW DICTIONARY (7th ed. 1999). A 

responsive pleading is defined as: “A pleading that replies to an opponent’s earlier 

pleading.” Id. The witness disclosure in this case was filed pursuant to a 

scheduling order by the trial court. We do not consider this a responsive pleading. 

See First Nat’l Bank of Cincinnati v. Hartman, 747 S.W.2d 614, 616 (Ky. App. 

1988) (“An agreed order of dismissal is not a responsive pleading in which a 

failure to raise a defense would thereby waive it.”).

As for the request for admissions, these were not filed with the court 

until after Dr. Heligman again raised the service of process issue before the circuit 

court via a motion for summary judgment. Appellees sent the request for 

admissions to counsel for CSX via email and counsel for CSX returned them to 
-25-

Appellees the same way. Counsel for CSX also noted an objection to the 

admissions because they were not properly served to the parties, not signed by an 

attorney for Appellees, and not filed with the court.7 Although counsel for CSX 

did not raise the original insufficiency of service of process defense here, we 

consider the other objections relevant.

We believe that the expert witness disclosure and the response to the 

request for admissions did not waive the insufficiency of service of process 

defense. First, continuing to defend yourself in court after raising the defense does 

not waive it. Ellis, supra. Second, we conclude that the witness disclosure in this

case was not a responsive pleading that would require a defendant to raise the

service of process issue. Hartman, supra. Third, the request for admissions were

not filed with the court, properly served upon Dr. Heligman, and were objected to. 

Dr. Heligman raised the service of process issue early in the case 

before the federal court and then again in the circuit court. Any participation of 

Dr. Heligman in these proceedings was done, as his trial counsel stated, “out of an 

abundance of caution” so that he would not lose out on his rights while he argued 

7 We note that we could not find the original, unanswered request for admissions in the record. 

We only had access to the request for admissions after they were answered; therefore, we cannot 

verify whether the request was signed by an attorney for Appellees. What we can verify is that it 

was not properly served to Dr. Heligman, as it was sent to counsel for CSX, and was not filed 

with the court.
-26-

the service of process issue. This issue was not waived and the trial court erred in 

not dismissing him from the case. 

CONCLUSION

Based on the foregoing, we vacate the judgment of the Greenup 

Circuit Court and remand for a new trial. On remand, Dr. Heligman should be 

removed from the case due to lack of service of process. In addition, CSX should 

be allowed to pursue the qualified privilege defamation defense and the “protecting 

an interest” defense for the tortious interference claim. Finally, the trial court 

should exclude any evidence regarding CSX’s operating income as discussed 

above. All other issues are affirmed or moot due to the remand.

ALL CONCUR.
-27-

BRIEFS FOR APPELLANT CSX 

TRANSPORTATION, INC.:

Evan M. Tager

Carl J. Summers

Washington, D.C.

Michael P. Abate

Louisville, Kentucky

BRIEFS FOR APPELLANT CRAIG 

HELIGMAN, M.D.:

Brian D. Schmalzbach

Davis Walsh

Richmond, Virginia

Earl L. Martin, III

Rodney D. Payne

Louisville, Kentucky

John L. Bishop

Charlotte, North Carolina

Samuel Tarry

Tysons, Virginia

ORAL ARGUMENTS FOR 

APPELLANTS CSX 

TRANSPORTATION AND DR.

CRAIG HELIGMAN, M.D.:

Michael P. Abate

Louisville, Kentucky

CO-COUNSEL:

Brian D. Schmalzbach

Richmond, Virginia

BRIEFS FOR APPELLEES:

Stephen G. Amato

David J. Guarnieri

Lexington, Kentucky

ORAL ARGUMENTS FOR 

APPELLEES DR. DANIEL J. 

CAREY II, D.C. AND SHANNON 

JOHNSON, D.C.:

David J. Guarnieri

Lexington, Kentucky

CO-COUNSEL:

Stephen G. Amato

Ken Reed

Lexington, Kentucky