Opinion ID: 1872143
Heading Depth: 2
Heading Rank: 1

Heading: Emberton's Suit Was Timely Filed

Text: On direct appeal, Emberton contends that the decision of the Court of Appeals must be reversed and the judgment of the trial court reinstated because the Court of Appeals failed to apply Kentucky's discovery rule to his injury. In the alternative, Emberton argues that GMRI actively concealed his cause of action so as to toll the statute of limitations period. We hold that GMRI did actively obstruct Emberton's discovery of his cause of action so as to make his suit timely. Because it is dispositive of the issue, we see no need to consider arguments concerning the discovery rule. Prior to trial, GMRI moved for summary judgment, alleging that Emberton had failed to file his suit within the one-year statute of limitations, pursuant to KRS 413.140(1)(a). [7] In response, Emberton filed an affidavit, explaining that, in spite of his attempts, he did not discover the source of his illness until May of 2004. [8] The trial court overruled GMRI's motion and concluded that: [E]mberton knew that he had been harmed. He knew that. He readily knew that he had been harmed. But that is not the definition. The question is whether or not he was injured... It was not until he realized that he had been injured [that the limitations period began to run]. That's the way I'm going to rule on it ... I think that the Wiseman [ v. Alliant Hospitals, 37 S.W.3d 709 (Ky.2000)] case is enough on point in this matter that it's within the statute of limitations. So I'm going to overrule the motion for summary judgment. Following judgment, GMRI moved for judgment notwithstanding the verdict, again asserting the statute of limitations as a bar to Emberton's cause of action. After a hearing, the trial court overruled GMRI's motions. GMRI then appealed and the Court of Appeals reversed the judgment of the trial court, concluding that Emberton had failed to file his suit within the statutory period. In reaching this decision, the Court of Appeals held that Kentucky's discovery rule did not apply to Emberton's injury and that he failed to investigate the source of his illness when reasonable diligence could have revealed the likely tortfeasor within the statutory period. [9] Emberton's cause of action, therefore, accrued when he was diagnosed with hepatitis A, making his suit two years too late. We note at the outset of our analysis that [w]here the pertinent facts are not in dispute, the validity of the defense of the statute of limitations can and should be determined by the court as a matter of law. Lynn Min. Co. v. Kelly, 394 S.W.2d 755, 759 (Ky.1965) ( citing Carr v. Texas Eastern Transmission Corp., 344 S.W.2d 619 (Ky.1961)); accord Hall v. Musgrave, 517 F.2d 1163 (6th Cir.1975). Here, as was the case in Louisville Trust Co. v. Johns-Manville Products, the parties concede that there is no dispute concerning the operative facts concerning the time elements involved. 580 S.W.2d 497, 501 (Ky.1979). Accordingly, we address the issue as one of law: whether Emberton's injury was time barred by KRS 413.140(1)(a). Generally, [t]he Kentucky General Assembly and this Court have long recognized the value of statutes which `bar stale claims arising out of transactions or occurrences which took place in the distant past.' Munday v. Mayfair Diagnostic Lab., 831 S.W.2d 912, 914 (Ky.1992) ( quoting Armstrong v. Logsdon, 469 S.W.2d 342, 343 (Ky.1971)). As such, provisions of statutes of limitations should not be lightly evaded. Id. ( citing Fannin v. Lewis, 254 S.W.2d 479, 481 (Ky.1952)). As we explained in Munday , however, none of this is to say that the statute is not without exceptions. See id. (citing cases). The most pertinent exception to our discussion here is that which Emberton advances on appeal: concealment or obstruction, as expressed in KRS 413.190(2). See generally Roman Catholic Diocese of Covington v. Secter, 966 S.W.2d 286, 290 (Ky. App.1998) (applying the statute). In relevant part, KRS 413.190(2) provides that [w]hen a cause of action mentioned in [KRS 413.140(1)(a)] accrues against a resident of this state, and he by ... concealing himself or by any other indirect means obstructs the prosecution of the action, the time of the ... obstruction shall not be computed as any part of the period within which the action shall be commenced. This tolling statute has been on our books for many years and is essentially a recognition in law of an equitable estoppel or estoppel in pais to prevent a fraudulent or inequitable resort to a plea of limitations. Adams v. Ison, 249 S.W.2d 791, 793 (Ky. 1952); see also Munday, 831 S.W.2d at 914 (Long ago a tolling statute was enacted which provides that a resident of this State who absconds or conceals himself `or by any other indirect means obstructs the prosecution of the action' shall not have benefit of the statute of limitation so long as the obstruction continues.) ( quoting KRS 413.190(2)). For purposes of the statute, though deception is involved, bad faith, evil design or an intent by the wrongdoer to deceive or mislead or defraud in the technical sense is not essential. Adams, 249 S.W.2d at 793. Rather, and in order to toll the limitations period, the concealment envisioned by KRS 413.190(2) must represent an affirmative act and cannot be assumed  i.e., it must be active, not passive. Id.; accord Munday, 831 S.W.2d at 915. For this reason, we have held that the statute's reference to other indirect means of obstruction of an action still requires an act or conduct that remains affirmatively fraudulent: The `other indirect means' of obstruction ... must consist of some act or conduct which in point of fact misleads or deceives plaintiff and obstructs or prevents him from instituting his suit while he may do so. Adams, 249 S.W.2d at 792 ( citing Reuff-Griffin Decorating Co. v. Wilkes, 173 Ky. 566, 191 S.W. 443, 444 (Ky.1917)); accord Gailor v. Alsabi, 990 S.W.2d 597, 603 (Ky. 1999). As a result, mere silence ... is insufficient and cannot support its application. Gailor, 990 S.W.2d at 603; see also L.S. Tellier, Annotation, What constitutes concealment which will prevent running of statute of limitations, 173 A.L.R. 576 5th § 12 (2009) (The rule is quite generally accepted, particularly in modern cases, that ... an affirmative act on the part of the defendant tending toward concealment is necessary, and that passivity, such as silence on his part, is not sufficient, in order to constitute such a concealment as to toll the statute of limitations.). We note that the most commonly recognized exception to the affirmative act requirement applies where a party remains silent when the duty to speak or disclose is imposed by law upon that person. Gailor, 990 S.W.2d at 603 ( citing Munday, 831 S.W.2d at 914) (emphasis added); see also Munday, 831 S.W.2d at 914 ([W]here the law imposes a duty of disclosure, a failure of disclosure may constitute concealment under KRS 413.190(2), or at least amount to misleading or obstructive conduct.). In Munday , for example, a legal duty was imposed by statute. 831 S.W.2d at 915. In Adams, a fiduciary duty was imposed by virtue of the doctor-patient relationship. 249 S.W.2d at 793; see also Security Trust Co. v. Wilson, 307 Ky. 152, 210 S.W.2d 336, 339-40 (Ky.1948) (fiduciary duty). And, in Secter, too, a legal duty was imposed by statute to disclose acts of child abuse to law enforcement authorities. 966 S.W.2d at 290. Returning to the case at bar, we hold that the actions of GMRI in actively directing the concealment of Phelps' hygiene, work habits, and exposure at the restaurant during the investigation constituted an affirmative act of concealment so as to obstruct Emberton's discovery and prosecution of his likely cause of action. The record demonstrates that District Manager, James Finley, was instrumental in not only suppressing the fact of Phelps' hepatitis A infection, but also the gravity of her potential exposure to the restaurant's patrons. When interviewed by the health department's epidemiology team, Finley assured them that Phelps' hygiene was good and they later testified that they believed him. What he did not disclose is that he had never met Phelps or that her employees had previously witnessed her obvious lack of appropriate hygiene. Finley ordered all of Red Lobster's employees not to discuss Phelps' infection with anyone and he disbursed free coupons to members of the health department in the apparent hope that his cooperation would keep the matter from public exposure. [10] When later confronted with a concerned customer questioning why all of Red Lobster's employees appeared to have similar band-aids on their arms, [11] Finley responded that there was not any health risk to anyone, and, as he later admitted, successfully persuaded the customer that there was no need to go to the press because his crew may have been donating blood at the health department. After this exchange, Finley later boasted, [the customer] started thinking that we could be doing something charitable. Taken as a whole, we believe Finley's conduct on behalf of GMRI was intentionally deceptive and designed to prevent public disclosure of Phelps' infection through the health department, the restaurant's employees, and its patrons. Consequently, the limitations period began only when GMRI's concealment was revealed or when Emberton should have discovered his cause of action by reasonable diligence. Adams, 249 S.W.2d at 793 (The statute begins to run only when the fraud or concealment is revealed or the facts discovered or should have been discovered by the exercise of reasonable diligence by the injured plaintiff); see also Secter, 966 S.W.2d at 290 (`Obstruction might also occur where a defendant conceals a plaintiffs cause of action so that it could not be discovered by the exercise of reasonable diligence.') ( quoting Rigazio, 853 S.W.2d at 297). Because the concealment was revealed to Emberton in May of 2004, the only question that remains is whether Emberton should have discovered his claim prior to that time. Given GMRI's active concealment and the sparse knowledge available to Emberton prior to meeting with Hixson, we cannot say that he should have. Finley's comprehensive and systematic suppression of Phelps' hepatitis A diagnosis and her exposure to customers served to effectively cut off any public disclosure of that fact, one which certainly would have apprised a patron like Emberton that his illness could have originated at the restaurant. The two primary means of disclosing that information  the restaurant's employees and the health department  were either ordered not to do so or were not given a complete and truthful account of Phelps' hygiene and exposure to others. When one of the restaurant's customers suspected ongoing health concerns, she was misled, thereby preventing informal disclosure. In no discussion with the health department was Emberton given any indication that the restaurant was anymore likely the source of his infection than the numerous other possible sources involving fecal-oral contact. Moreover, he was assured that he would be contacted should significant information develop. Without any such notice, Emberton reasonably relied upon his doctor's assurances that he could have contracted the virus anywhere. With only that knowledge at hand, [12] we cannot say that Emberton should have investigated his illness further. Accordingly, we hold that KRS 413.140(1)(a) was tolled for the effective time of the concealment, ending in May of 2004. Therefore, Emberton's suit, filed three months later, was timely and not barred by the statute of limitations. Before moving on, however, we must address GMRI's suggestions that Emberton's concealment argument and, indeed, the very basis of our holding here, is not properly preserved. Though GMRI rightly notes that Emberton did not make this argument to the Court of Appeals, his failure to do so does not prevent our review. Emberton, as a successful appellee, fundamentally had no claim of error to make or preserve at the Court of Appeals. 5 C.J.S. Appeal and Error § 971 (1995) ( citing Mueller v. Elm Park Hotel Co., 391 Ill. 391, 63 N.E.2d 365, 368-69 (Ill.1945)). Moreover, an appellate court may affirm a lower court's decision on other grounds as long as the lower court reached the correct result. See e.g. McCloud v. Commonwealth, 286 S.W.3d 780, 786 n. 19 (Ky.2009) ([I]t is well-settled that an appellate court may affirm a lower court for any reason supported by the record.) ( citing Kentucky Farm Bureau Mut. Ins. Co. v. Gray, 814 S.W.2d 928, 930 (Ky.App.1991)); see Fischer v. Fischer, 197 S.W.3d 98, 102-03 (Ky.2006) (Appellee's failure to raise the issue in the Court of Appeals does not prevent Appellant from presenting it here as he had no duty to present it to the Court of Appeals since he defended the trial court decision and it had to be affirmed if it was sustainable on any basis.) ( citing Commonwealth Transp. Cabinet Dept. of Highways v. Taub, 766 S.W.2d 49 (Ky.1988)); Am. Gen. Home Equity, Inc. v. Kestel, 253 S.W.3d 543, 549 n. 11 (Ky. 2008). Indeed, we believe any contrary rule requiring the appellee on appeal to have briefed every conceivable alternative argument for affirming the trial court in the Court of Appeals would inundate our appellate courts with unnecessary cross-appeals and reading than they can do or is necessary. Of even greater concern is that such a requirement could force this Court to affirm and publish an opinion that we know is erroneous for other reasons. In any event, a review of the record shows that GMRI raised the issue before the Court of Appeals, to wit: Additionally, [GMRI] did not fraudulently conceal or misrepresent any facts to Emberton. [GMRI] and its employees did not make the decision not to inform the public of Carissa Phelps' illness. It is undisputed that the local health department made that decision pursuant to its guidelines and procedures. There is no legal duty imposed on [GMRI] or any of its employees to go further than local health officials concerning the health and safety notices. [GMRI's] act of complying with the health department's decision not to go public is not fraudulent concealment or a misrepresentation which would toll the statute of limitations. See Thomson v. McDonald's, Inc. [180 Ill.App.3d 984, 129 Ill.Dec. 710], 536 N.E.2d 760, 762 (1989) (holding that mere silence by a defendant accompanied by a plaintiffs failure to timely discover a cause of action does not constitute fraudulent concealment); Munday v. Mayfair Diagnostic Laboratory, 831 S.W.2d 912, 914 (Ky.1992) (absent a legal duty to speak, proof of fraud requires an affirmative act by the party charged). There was no such affirmative act by [GMRI] in this case and the statute of limitations was not tolled. GMRI also joined with Appellant, Emberton, to address the issue in its summary judgment motion at the trial court: Mere silence by a defendant accompanied by a plaintiff's failure to timely discover a cause of action does not constitute fraudulent concealment. Thomson v. McDonald's, Inc. [180 Ill.App.3d 984, 129 Ill.Dec. 710], 536 N.E.2d 760, 762 (1989). Ordinarily, proof of fraud requires a showing of an affirmative act by the party charged. Munday, 831 S.W.2d at 914. An exception to this general rule may be found in a party's silence when the law imposes a duty to speak or disclose. Id. ... [GMRI] cooperated with the local health departments' investigation and did not participate in the decision not to go public with this information. The law does not impose a duty on [GMRI] or its employees to provide notice concerning a health issue such as this above and beyond any decision made by the public health officials who has jurisdiction over the issue. The Plaintiff cannot point this Court to any authority which imposes this duty on Moving Defendants. The decision not to go public was made by the appropriate health officials. The decision of the Moving Defendants to abide by this decision does not constitute fraudulent concealment and the statute of limitations should not be held tolled. Indeed, it is difficult to review the parties main arguments over the discovery rule and ignore one of the primary exceptions to it and the statute of limitations  that of active concealment.