Court Opinion

ID: 9634903
Source: CourtListenerOpinion
Date Created: 2023-08-22 13:28:16.095531+00
Date Added: 2024-06-11T18:09:12.601130
License: Public Domain

JOHNSTONE, Justice,
concurring.
While I concur fully with the majority, I write separately to address the Louisville Water Company’s (“LWC”) argument that punitive damages cannot be assessed against it under the common law.
The crux of the LWC’s argument on this issue is that it is a municipal corporation and, under the common law, punitive damages are not allowed against a municipal corporation unless expressly provided by statute. There are several flaws to this argument. First, there is no support for the claim that punitive damages are not permitted against municipal corporations under the common law of Kentucky. Next, even if Kentucky common law did prohibit assessment of punitive damages against municipal corporations, this prohibition would not apply to the LWC. Finally, any common-law prohibition against awarding punitive damages would not apply in a statutory wrongful death case such as the case at bar.
I. Punitive Damages are Available Against Municipal Corporations in Kentucky
The LWC fails to cite a single Kentucky case holding that punitive damages are not permitted against municipal corporations. Rather, it relies on City of Newport, et al. v. Fact Concerts, Inc., 453 U.S. 247, 101 S.Ct. 2748, 69 L.Ed.2d 616 (1981), which states in pertinent part:
By the time Congress enacted what is now § 1983, the immunity of a municipal corporation from punitive damages at common law was not open to serious question. It was generally understood by 1871 that a municipality, like a private corporation, was to be treated as a natural person subject to suit for a wide range of tortious activity, but this understanding did not extend to the award of punitive or exemplary damages. Indeed, the courts that had considered the issue prior to 1871 were virtually unanimous in denying such damages against a municipal corporation. Judicial disinclination to award punitive damages against a municipality has persisted to the present day in the vast majority of jurisdictions
Id. at 259-60, 101 S.Ct. at 2756, 69 L.Ed.2d. at 627 (internal citations omitted). But the City of Newport Court did not cite to any Kentucky case, either directly or indirectly, as authority for this “general rule.” Most likely this is because there is none.
The only Kentucky case that raises the question of whether punitive damages are permitted against a municipal corporation leaves the question open. ‘Without passing upon the question of whether or not *58averments might be made under which the city would be responsible in punitive damages, it is sufficient to say that such aver-ments are not made in the petition in this case.... ” Clayton v. City of Henderson, 103 Ky. 228, 44 S.W. 667, 669 (1898). Further, cases following Clayton involving punitive damages against a city imply that punitive damages are available against a city, because municipal immunity from punitive damages is never mentioned as a defense. See, e.g., City of Covington v. Faulhaber, et al., 178 Ky. 586, 199 S.W. 32 (1917); City of Middlesboro v. Brown, Ky., 63 S.W.3d 179 (2001). Therefore, I conclude that punitive damages are available against a municipal corporation under Kentucky law. But even if Kentucky followed the “general rule” set forth in City of Newport, the “general rule” does not shield the LWC from punitive damages.
II. The LWC is not a Municipal Corporation Within the Meaning of the General Rule
The term “municipal corporation” can be defined narrowly or broadly. See 56 Am. Jur.2d, Municipal Corporations, Counties, and Other Political Subdivisions, § 1 (2002) (“Under the law of some states, the term ‘municipal corporation’ means not merely a city, but refers generally to any local government entity created by the state to carry out designated functions.”). Kentucky law defines the term broadly. Id., citing Kentucky Center for the Arts v. Berns, Ky., 801 S.W.2d 327 (1990). The policy reasons behind the “general rule” support limiting its application to those entities falling within the narrow definition of the term “municipal corporation.”
Under the “general rule,” “[pjunitive damages may not be recovered against such governmental entities as municipal corporations, school districts, cities, counties, or the state and its political subdivisions.” 57 Am.J-ur.2d, Municipal, County, School, and State Tort Liability, § 648 (2002) (emphasis added). This rule is founded on public policy:
Because the burden of a punitive damages award against a municipality ultimately falls on the taxpayers, and thus will fail to deter future harmful activity by the municipality itself, punitive damages are not usually recoverable against a municipality. Similarly, punitive damages may not be awarded against a county because taxpaying citizens would be punished for the acts of public officials
Id. at § 651. Shielding the non-governmental LWC from punitive damages does not further this public policy.
The burden of the punitive damages award against the LWC will not borne by the taxpayers of Louisville in the form of higher taxes or reduced services. If passed on, the burden will fall on the LWC’s customers. While most of these customers will also probably be Louisville taxpayers, this is coincidence and not of consequence. The burden will not fall on Louisvillians as taxpayers, but rather as customers of the LWC. This distinction is important. Otherwise, public policy would support extending immunity from punitive damages to all public utilities and to any business entity which holds a monopoly over an important service or product. But this is not the case. See, e.g., Kentucky Utilities Co. v. Jennings, Ky.App., 549 S.W.2d 528 (1977) (affirming a punitive damages award against Kentucky Utilities Co.). Thus, the policy reasons for shielding municipalities and counties from punitive damages do not apply to extending the shield to cover the LWC.
III. The Statutory Right to Punitive Damages in a Wrongful Death Case Trumps the Common-Law
The only legal entitlement to recover damages for wrongful death in Kentucky *59is provided by Section 241 of the Constitution and KRS 411.130. There is not and never has been a common law right of action for wrongful death in Kentucky. Smith’s Adm’r v. National Coal & Iron Co., 135 Ky. 671, 117 S.W. 280, 281 (1909); Eden v. Lexington & Frankfort R.R. Co., 53 Ky. (14 B.Mon.) 204, 205 (1853). “The maxim, ‘Actio personal-is moritur cum persona,’ was the uniform rule of the common law, and prevails in Kentucky today (sic), except where it has been modified by the express language of the Constitution and statute.” Gregory v. Illinois Cent. R. Co., Ky., 80 S.W. 795 (1904). Section 241 creates a right of action for damages for wrongful death and provides that “[t]he General Assembly may provide how the recovery shall go and to whom belong....”
Robertson v. Vinson, Ky., 58 S.W.3d 432, 435 (2001) (Cooper, J. concurring).
In providing how “the recovery [for wrongful death] shall go” the General Assembly declared that punitive damages may be recovered if “the act was willful or the negligence gross.” KRS 411.130(1). This statute trumps common-law municipal immunity. See, e.g., City of Louisville v. Hart’s Adm’r, 143 Ky. 171, 136 S.W. 212 (1911) (affirming a judgment for wrongful death brought against city under KRS 411.130); Spangler’s Adm’r v. City of Middlesboro, 301 Ky. 237, 191 S.W.2d 414 (1945) (holding that the 90-day notice contained in KRS 411.110 is not controlling in a wrongful death case brought against city under KRS 411.130). It also trumps the common-law prohibition that precludes punitive damages against a municipal corporation (assuming that the prohibition exists in Kentucky). See City of Lexington v. Lewis’s Administratrix, 73 Ky. 677, 10 Bush 677 (1875) (Reversing a punitive damages award against city for wrongful death obtained under predecessor statute for failure to charge “willful neglect,” without mentioning the city’s “general rule” defense against punitive damages.). Therefore, any common-law immunity defense the LWC had against the punitive damages award was abrogated by KRS 411.130.
IV. Conclusion
Kentucky common law does not follow the “general rule” announced by the U.S. Supreme Court in City of Newport that prohibits the imposition of punitive damages against a municipal corporation. Even if it did, the LWC would not benefit from the common-law rule. Moreover, any common-law prohibition would have to yield to the statutory right to seek punitive damages in a wrongful death case. Therefore, I conclude that there is no statutory or common-law bar that precludes the punitive damages award against the LWC and that the punitive damages award against the LWC was proper for the reasons stated in the majority opinion.
STUMBO and WINTERSHEIMER, JJ., join this concurring opinion.