Opinion ID: 2544799
Heading Depth: 2
Heading Rank: 2

Heading: A Motion or a Cross-Motion for Discretionary Review Is Required for Further Review Only When the Lower Court's Judgment Negatively Affects the Movant.

Text: John argues that the Court of Appeals' decision can still be affirmed for several reasons, all of which were argued on appeal below but which were not resolved by the court. For example, he argues that his offer was gratuitous, and thus was insufficient to form a binding contract and that any agreement they may have reached, being in part about real property, violated the statute of frauds. John, however, did not raise these issues by way of a cross-appealmore specifically, a cross-motion for discretionary review, which, if granted, would have resulted in a cross-appeal. This could be problematic, because this Court has stated in the past that it will not address issues raised [by a party] but not decided by the court below unless presented in a cross-motion for discretionary review. Com. Transp. Cabinet Dept. of Highways v. Taub, 766 S.W.2d 49, 51 (Ky.1988). The Court further explained this procedural bar, stating that [i]t is the rule in this jurisdiction that issues raised on appeal but not decided will be treated as settled against the appellant in that court upon subsequent appeals unless the issue is preserved by cross-motion for discretionary review. Id. at 51-52 (citing CR 76.21(1); Nashville, C. & St. L. Ry. Co. v. Banks, 168 Ky. 579, 182 S.W. 660 (1916); Eagle Fluorspar Co. v. Larue, 237 Ky. 263, 35 S.W.2d 303 (1931)). [1] But as noted above, it is also the rule in this jurisdiction that the judgment of a lower court can be affirmed for any reason in the record. See Kentucky Farm Bureau Mut. Ins. Co. v. Shelter Mut. Ins. Co., 326 S.W.3d 803, 812 n. 3 (Ky.2010) (noting that a court may affirm for any reason appearing in the record). This rule applies equally to both the judgment of a trial court and the judgment of an appellate court. [2] Under this rule, this Court has repeatedly stated that [w]here the prevailing party seeks only to have the judgment affirmed, it is entitled to argue without filing a cross-appeal that the trial court reached the correct result for the reasons it expressed and for any other reasons appropriately brought to its attention. Com., Corrections Cabinet v. Vester, 956 S.W.2d 204, 205-06 (Ky.1997). The same rule applies to the judgment of an appellate court. See Hale v. Combs, 30 S.W.3d 146, 150 (Ky.2000) (stating the prevailing party need not file a cross-appeal in order to assert that the lower court. . . reached the right result for the wrong reason where the alternative issue was not decided by the Court of Appeals); Com. ex rel. Cowan v. Telcom Directories, Inc., 806 S.W.2d 638, 642 (Ky.1991) (declining to treat unaddressed and un-cross-appealed issues as procedurally barred where lower court held there was no jurisdiction over the case). Since this Court reverses or affirms judgments rather than issues, then if a judgment has been affirmed, there is obviously no logical reason for the prevailing party to appeal, regardless of the ground or grounds upon which affirmance occurs. But a party whose judgment has been reversed is entitled to a reversal based only on what he has had an opportunity to argue to the lower court, absent palpable error. Discomfort with the sometimes draconian results of Taub has also led this Court to make rather fine distinctions between whether an issue had to be raised by a cross-appeal, see Steel Technologies, Inc. v. Congleton, 234 S.W.3d 920, 926-27 (Ky. 2007) (holding that preservation of a legal question was not a distinct legal issue requiring a cross-appeal and was instead simply an alternative ground under Vester ), or to conclude that it is simply unreasonable to apply Taub, Petzold v. Kessler Homes, Inc., 303 S.W.3d 467, 478 (Ky. 2010), because the rationale upon which the Court of Appeals vacated the whole judgment would apply with equal force to the lesser issues which it declined to address, id. at 477. Undoubtedly, the rule in Taub presents this Court, and attorneys and litigants, with difficulty on occasion. As noted by some commentators, its mandatory requirement [of a cross-motion for discretionary review] may easily be a trap for the unwary because of the seeming conflict with the general rule that an appellate court may affirm the lower court's judgment on alternative grounds in the absence of cross-appeal. 19 Sheryl G. Snyder, Griffin Terry Summer, 85 Matthew C. Blickensderfer, Ky. Prac., Appellate Prac. § 11:5 (2010-2011). This Court has even noted that Taub depends on a fiction, namely, that issues which the Court of Appeals did not address were decided against the party prevailing in that court. Petzold, 303 S.W.3d at 477. Despite these criticisms, this Court has so far avoided engaging Taub directly, usually by way of judicial contortions to avoid its effect. E.g., Steel Technologies, Inc., 234 S.W.3d at 926-27. The problem with Taub is not the rule requiring a party prejudiced by the lower court to seek a cross-appeal or lose the claims (such as when a party prevails on some claims but loses on others), whether by direct cross-appeal from the trial court's judgment or by cross-motion for discretionary review from the Court of Appeals. Rather, the problem with Taub is the fiction on which it relies, which leads to a misapplication of the rule for when a cross-appeal is required. The rule that issues raised on appeal but not decided by the appellate court will be treated as settled against the appellant in that court upon subsequent appeals makes sense in the context in which that rule originally appeared, namely, subsequent appeals after remand to the trial court. The cases cited for this rule in TaubNashville, Chattanooga & St. Louis Railway Co. v. Banks, 168 Ky. 579, 182 S.W. 660 (1916), and Eagle Fluorspar Co. v. Larue, 237 Ky. 263, 35 S.W.2d 303 (1931)fall into this category. In both cases, the undecided questions were treated as the law of the case. In subsequent appeals, the appellate court's failure to address the issue is treated as an implicit decision against the position raised by the losing party. The theory underlying this approach is that if the appellate court had considered the issue to be meritorious, the court would have reached a different result: Our rule is that issues which, if sustained, call for dismissal, are taken as decided and rejected when the case has been reversed and remanded on the first appeal. Board of Trustees of University of Kentucky v. Hayse, 782 S.W.2d 609, 614 (Ky.1989), overruled on other grounds by Yanero v. Davis, 65 S.W.3d 510 (Ky.2001); see also id. (This remand with no discussion of the sovereign immunity defense, which had been raised and, which, if appropriate, would call for dismissal, forecloses further litigation of these questions as a matter of law.). Because a decision on the issue has been reached, albeit implicitly, the standard law-of-the-case bar on re-litigating that issue on a subsequent appeal applies. [3] Taub's application of this rule is problematic for several reasons. It misconstrues a law-of-the-case rule to apply to the next appellate step, rather than the next appeal, even though the law-of-the-case doctrine is aimed at future appeals. In so doing, it confuses that rule with the doctrine that appeals may be taken only by a party adversely affected by a judgment. This first problem, of course, is that the law-of-the-case doctrine is a procedural rule aimed at specific problems stemming from multiple appeals, not multiple steps in a single appeal. It makes sense to bar a party from raising an issue that was previously decided, either implicitly or explicitly, on a subsequent appeal, since that decision effectively became final when the case was remanded to the trial court and discretionary review of the initial decision either was not sought or was not granted. The initial appellate decision has been rendered and applied by the trial court. Without the law-of-the-case rule, the appellate court that originally decided the issue would have to re-decide the issue on the second appeal. [4] Essentially, the rule is aimed at creating finality. But Taub extends the law-of-the-case limit to a discretionary review of the initial appellate decision, which is in the same appellate line. Usually, this discretionary appeal is to the Supreme Court, which follows an appeal of right to the Court of Appeals. This is not a second or subsequent appealit is simply an extension of the first appeal. The initial appellate decision has not yet become final, as would be true when multiple appeals are separated by a retrial. Indeed, on such a discretionary appeal, the original appellate decision is exactly what is to be reviewed by the higher court. The issues decided in the original appeal have not yet been finally decided and thus are still in play. It does not make sense to apply the law-of-the-case doctrine, which is aimed at preserving finality and preventing re-litigation of issues on a second trip to the same appellate court, to a case where the decision on the issue in question has not yet become final and, by the very nature of discretionary review, is still being litigated in the next higher court as in this case before the Court. Taub is also problematic because it also places a burden on the party who won on appeal and thus requires that the winning party pursue an appeal. Though some cases have applied the raised-but-not-decided-issue bar to the party that prevailed in the lower court, they did so because [c]ases cannot be tried piecemeal, Eagle Fluorspar Co., 35 S.W.2d at 304, and only where a party pursues a second appeal, not an extension of the same appeal by way of discretionary review. By requiring a winning party to seek a cross-appeal, Taub undermines the general rule that a party may not appeal from a judgment in his own favor. Miller v. Miller, 335 S.W.2d 884, 886 (Ky.1960); see Brown v. Barkley, 628 S.W.2d 616, 618 (Ky.1982) (A party must be aggrieved by a judgment in order to appeal from it.). The reason for this general rule is that appeals are taken from judgments, not from unfavorable rulings as such. Brown, 628 S.W.2d at 618. And for this reason, [a] cross-appeal is appropriate only when the judgment fails to give the cross-appellant all the relief he has demanded or subjects him to some degree of relief he seeks to avoid. Id. Brown went on to delineate when a cross-appeal is and is not required, again focusing on the difference between an adverse ruling and an adverse, even in part, judgment: Some of our past opinions suggesting the necessity of a cross-appeal in order for an appellee to bring an adverse ruling of the trial court under review by an appellate court appear to have fostered confusion by failing to distinguish between those instances in which the judgment gives the appellee the ultimate relief for which he has contended and those in which the judgment gives him something less. In the latter case he cannot challenge the shortcomings of the judgment without a cross-appeal. He can, however, by way of bolstering the judgment against the possibility that the appellate court may accept the appellant's claim of error, make the point that he was nevertheless entitled to the judgment on a theory that was properly presented but erroneously rejected by the trial court. To cite a familiar example, if in a damage suit the judgment reflects a jury verdict in favor of the defendant, there is no reason why he cannot argue to the appellate court that certain errors raised on appeal by the losing plaintiff are immaterial because the defendant had moved for and was entitled to a directed verdict anyway. In short, cross-appeals can be maintained only when the effect of the trial judgment is to place some obligation on appellee (or, of course, to deny him something for which he has asked). Brown, 628 S.W.2d at 618-19 (quoting Clark v. Wells-Elkhorn Coal Co., 215 Ky. 128, 284 S.W. 91, 93 (1926)) (footnote omitted, emphasis added). Brown comports with the treatment of cross-appeals at the federal level. There, [a]bsent a cross-appeal, an appellee may `urge in support of a decree any matter appearing in the record, although his argument may involve an attack upon the reasoning of the lower court' but may not `attack the decree with a view either to enlarging his own rights thereunder or of lessening the rights of his adversary.' El Paso Natural Gas Co. v. Neztsosie, 526 U.S. 473, 479, 119 S.Ct. 1430, 143 L.Ed.2d 635 (1999) (quoting United States v. American Railway Express Co., 265 U.S. 425, 435, 44 S.Ct. 560, 68 L.Ed. 1087 (1924)). The same rule also applies to cross-petitions for certiorari, id. at 479 n. 3, 119 S.Ct. 1430, which are the federal analog of our cross-motions for discretionary review. There is no reason for this Court to deviate from this long-standing and well-reasoned rule. In some ways, an appeal is analogous to a civil complaintalbeit one over the wrongdoing of a lower court instead of underlying conduct by a defendant. Just as elementary standing requirements governing the filing of the initial complaint require actual harm to a plaintiff, the prerequisite to an appeal is actual harm resulting from a judgment below. Where a party is in no way aggrieved by any judgment below, there is no basis to complainor appeal. Nor is there any basis to cross-appeal, which is nothing more than the characterization for an appeal by a party already in the posture of an appellee. Any appealcross-appeal or otherwiseis only appropriate for an aggrieved party. Given that cross-appeals are only appropriate in these instances, the requirement of a cross-motion for discretionary review should only kick in when the Court of Appeals' judgmentits result somehow wrongs the appellee in this Court, even if only in part. Where the appellee in this Court has raised an issue at the Court of Appeals, which declines to address it but nevertheless renders judgment wholly in favor of the appellee, a subsequent failure to raise that issue in this Court by way of a cross-motion for discretionary review should not be an absolute bar to this Court's consideration of it. Of course, it is important to reconcile this approach with CR 76.21, which states that an appellee in this Court is permitted. . . to file a cross motion for discretionary review designating issues raised in the original appeal which are not included in the motion for discretionary review but which should be considered in reviewing the appeal in order to properly dispose of the case. CR 76.21(1). Taub relied on this rule, in part, in requiring that appellees file cross-motions for discretionary review to raise issues that the Court of Appeals did not reach. This, too, seems an incorrect extension of the law for a number of reasons. First, CR 76.21 is permissive. It does not require that a cross-motion be filed. Of course, this raises the question why the rules provide for a cross-motion at all if such other issues can also be raised in the appellee's responsive brief. For the most part, CR 76.21 is simply meant to parallel the cross-appeal rule, CR 74.01, meaning that all the rules that apply to cross-appeals also apply to CR 76.21. The cross-appeal rule is also permissive, but cross-appeals from trial courts are required only where a party is aggrieved by the trial court's judgment, even if only in part. By analogy, a party would have to be aggrieved by the Court of Appeals' judgment, at least in part, before a cross-motion for discretionary review would be required. There seems no reason to read CR 76.21 as requiring something different. The only seemingly substantive difference is that CR 74.01 says an appellee . . . may take a cross appeal from a judgment of the trial court, whereas CR 76.21 says a respondent (or appellee) is permitted to file a cross-motion for discretionary review designating issues raised in the original appeal which are not included in the motion for discretionary review but which should be considered in reviewing the appeal in order to properly dispose of the case. This leads to the second problem with Taub's approach to CR 76.21, which does not reflect this Court's practice in dealing with discretionary cases. The discretionary review rules were designed with an eye toward the Court addressing narrow issues of law in the course of reviewing the Court of Appeals' decision. This is why, for example, the motion for discretionary review rule requires the movant to provide a clear and concise statement of (i) the material facts, (ii) the questions of law involved, and (iii) the specific reason or reasons why the judgment should be reviewed CR 76.20(3) (emphasis added). If the grant of discretionary review is limited to the questions of law raised by the movant, then it makes sense to require the respondent to file a cross motion for discretionary review designating issues raised in the original appeal which are not included in the motion for discretionary review but which should be considered in reviewing the appeal in order to properly dispose of the case. CR 76.21(1). Except in special circumstances, taking review of discrete issues is not the prevailing rule of the Court, which grants discretionary review of the whole case. Under the Court's present rule, issues raised in the original appeal refers to issues leading directly to a result (or partial result), since whole cases are taken. This means that the judgment of the lower court is under review. If the judgment of the Court of Appeals negatively affects only the movant, why force the respondent to file an independent motion for discretionary review? It only makes sense to require the respondent to file such a motion where the judgment of the Court of Appeals affects him negatively, for example, when the judgment fails to give the cross-appellant all the relief he has demanded or subjects him to some degree of relief he seeks to avoid. Brown, 628 S.W.2d at 618. In such a case, a discretionary review movant would not be required to raise issues that are adverse to the respondent; indeed, the movant would be barred from raising such issues, since the movant prevailed as to that part of the judgment. Until this Court changes its rule to take review only of narrow issues of law rather than the entire judgment, Taub's reading of CR 76.21 to apply to a prevailing party is simply unworkable. [5] The better approach is to require cross-appeals and cross-motions for discretionary review only where the party is aggrieved by the lower court. This approach removes that trap for the unwary presented by having the opposing rules in both Taub and Vester (and related cases). It is simply unfair to litigants to have a rule that might prejudice them for their counsel's inability to negotiate between the Scylla and Charybdis of these two cases. Vester clearly presents the more workable and sensible rule. This Court's conclusion regarding whether an issue is still live for purposes of requiring a cross-motion for discretionary review may seem somewhat at odds with the earlier portions of this opinion, which treat issues not raised at trial as procedurally defaulted. The difference, however, is that the issues we are now discussing were raised, both at the trial court and appellate court. The Court of Appeals simply declined to address them. As noted in Brown, an appellee can . . . by way of bolstering the judgment against the possibility that the appellate court may accept the appellant's claim of error, make the point that he was nevertheless entitled to the judgment on a theory that was properly presented but erroneously rejected by the trial court. 628 S.W.2d at 619 (emphasis added). Judicial economy requires that a party actually raise an issue for it to be treated as live on appellate review; it does not require that a prevailing party use what amounts to a separate appeal to maintain an ongoing dispute over an issue that was raised but, for whatever reason, not decided below. Consequently, to the extent that Taub requires a prevailing party to file a cross-motion for discretionary review on issues raised but not addressed by the Court of Appeals, it is overruled. There is no validity, in an initial appeal, in assuming that issues raised but not addressed by the lower court have been decided against a party who has won the judgment. A party may seek a review of an adverse judgment, not one in his favor. However, if an appeal is taken or a motion for discretionary review is filed against a party who prevailed in the judgment, the appellee must raise any other grounds argued to the lower court upon which he also wishes to rely in his responsive brief, if not addressed in the judgment. This is necessary to provide the reviewing court with reasonable, timely notice of these other grounds, should the court reverse on the ground or grounds relied on by the lower court. So, the question, then, is whether any of the other reasons that John has raised in his brief, and which were raised at the trial court and Court of Appeals, support affirming the judgment of the Court of Appeals, which reversed the judgment of the trial court.