Court Opinion

ID: 4794658
Source: CourtListenerOpinion
Date Created: 2021-08-20 14:10:10.708327+00
Date Added: 2024-06-11T08:09:54.116535
License: Public Domain

RENDERED: AUGUST 13, 2021; 10:00 A.M.
                        NOT TO BE PUBLISHED

                 Commonwealth of Kentucky
                           Court of Appeals

                              NO. 2020-CA-1417-MR

LOLA MOLNAR                                                           APPELLANT

                APPEAL FROM FAYETTE CIRCUIT COURT
v.             HONORABLE JULIE MUTH GOODMAN, JUDGE
                       ACTION NO. 20-CI-00166

TACK HOUSE PUB, LLC                                                     APPELLEE

                                     OPINION
                                    AFFIRMING

                                   ** ** ** ** **

BEFORE: COMBS, KRAMER, AND L. THOMPSON, JUDGES.

KRAMER, JUDGE: Lola Molnar appeals two orders of the Fayette Circuit Court

– the first of which dismissed her premises liability action against the appellee,

Tack House Pub, LLC, based upon limitations; and the second of which denied her

motion to amend her complaint in this matter. Upon review, we affirm.
                      FACTUAL AND PROCEDURAL HISTORY

                On January 15, 2020, Molnar filed suit against Tack House in Fayette

Circuit Court, alleging she had sustained injuries in a fall on its premises on

September 4, 2018, and that her injuries were attributable to its negligence.

Tack House answered; it denied liability and shortly thereafter moved to dismiss

Molnar’s suit on limitations grounds pursuant to CR1 12.02. Specifically, Tack

House noted the one-year limitations period set forth in KRS2 413.140(1)(a)3

applied to Molnar’s injury claim; and that January 15, 2020 – the date Molnar

initiated her suit – was well beyond one year after September 4, 2018. Thus, from

the face of Molnar’s complaint, Tack House argued Molnar’s suit was time barred.

                Elsewhere in its motion, however, Tack House also indicated it had

contacted Molnar about what it believed was the untimeliness of her claim; that

Molnar had disagreed based upon a December 17, 2019 letter she had received

from Tack House’s insurer, Grange Insurance Company; and, that it anticipated

Molnar would seek to avoid the effect of KRS 413.140(1)(a) based upon Grange’s

letter. The letter, which Tack House attached as an exhibit to its motion to dismiss,

provided in relevant part:

1
    Kentucky Rule of Civil Procedure.
2
    Kentucky Revised Statute.
3
 KRS 413.140(1)(a) provides: “(1) The following actions shall be commenced within one (1)
year after the cause of action accrued: (a) An action for an injury to the person of the plaintiff, or
of her husband, his wife, child, ward, apprentice, or servant[.]”

                                                 -2-
             After careful consideration of the facts of this loss, it is
             our position that our insured [Tack House] is not legally
             responsible. In the absence of legal liability, we would
             not be justified in making any payment; accordingly, we
             must deny this claim.

             The statute of limitations ran on 09/04/2019. The time
             period to file a lawsuit will be extended 30 days from the
             date you receive this letter.

(Emphasis added.)

             Citing the above-italicized language of the letter, Tack House then

proceeded to argue this letter had not “extended” Molnar’s “time period to file a

lawsuit” to January 15, 2020 – a date undisputedly “30 days from the date

[Molnar] received this letter” – and that accordingly Molnar’s suit should

nevertheless be dismissed on the basis of KRS 413.140(1)(a).

             We pause here for a moment. Before discussing the substance of

Tack House’s preemptive rebuttal to an argument Molnar had yet to raise, it is

helpful to first put into context (1) what Molnar’s argument regarding this letter

was; and (2) why Grange wrote this letter to Molnar.

             As to the what, Molnar asserted Grange’s December 17, 2019 letter

had formed the basis of the type of “agreement” described in KRS 413.265. In her

response to Tack House’s motion, Molnar summarized her argument in relevant

part as follows:

                                          -3-
                     KRS 413.265 unambiguously allows for this suit to
              proceed. In its entirety, KRS 413.265 states: “Written
              agreements entered into in good faith and at arms length
              to extend limitations periods for the filing of civil
              actions, including agreements entered into prior to July
              15, 1988, shall be valid and enforceable according to
              their terms.”

              Why Grange wrote this letter to Molnar is somewhat complicated.

There is no dispute that Tack House timely notified Grange as to Molnar’s

potential claim and that Grange thereafter acted on Tack House’s behalf for

purposes of communicating with Molnar and negotiating the claim. And, after

over a year had elapsed since the date of Molnar’s alleged injury on December 17,

2019, as set forth in its letter, Grange’s negotiating “position” with Molnar was

that its insured, Tack House, was “not legally responsible.” Nevertheless,

Grange’s stated intent – both in its letter, and according to what its designated

representative attested to in a July 6, 2020 hearing before the circuit court in this

matter – was to give Molnar the “gift” of an additional “30 days from the date

[she] receive[d] this letter” to file suit against its insured, Tack House.

              From all appearances of the record, Grange did this purely out of self-

interest: Grange believed it had committed a violation of a Kentucky insurance

regulation during its negotiations with Molnar regarding her claim;4 and, when

4
  Because the substance of this regulation and as to why Grange thought it might be in violation
of it have no bearing on this case, we will delve into it only as necessary for the benefit of
context of the December 17, 2019 letter.

                                              -4-
Grange sent Molnar the December 17, 2019 letter, it believed giving her the “gift”

of an additional thirty days would remedy its perceived violation.

             After it had already sent Molnar its December 17, 2019 letter,

however, Grange correctly realized that it had not in fact committed a regulatory

violation in regard to its negotiations with Molnar. But, in having tried to protect

itself, Grange put its own insured in potential peril of liability for a stale claim.

There is no indication from the record that Grange ever consulted with Tack House

before it decided to make this “gift”; that Tack House ever consented to it; or that –

at least until after Molnar filed suit in this matter – Grange explained to anyone

why it had sent the December 17, 2019 letter. Indeed, Tack House has maintained

in its pleadings, motions, and answers to Molnar’s interrogatories that it was not

aware of any communications between Grange and Molnar until after Molnar filed

suit; and, in particular, that it was unaware of Grange’s December 17, 2019 letter

until Molnar presented it shortly after Tack House asked her for a voluntary

dismissal.

             With that explanation as to the what and the why of the December 17,

2019 letter, we turn back to the circuit court’s dismissal of Molnar’s action against

Tack House. The court found that KRS 413.265 was inapplicable because: (1) no

proof of record indicated Molnar had been induced to file suit outside of the

applicable limitations period; and (2) in the circuit court’s view, KRS 413.265 did

                                           -5-
not authorize parties to contractually “extend” a statutory deadline that had already

elapsed. In its September 30, 2020 order to that effect, the circuit court explained

in relevant part:

             [T]here was no conduct by Grange or its employees that
             would indicate the Plaintiff detrimentally relied on any
             representations made to her prior to the expiration of the
             applicable statute of limitations. This Court determined
             from the record that there was no evidence of any
             detrimental reliance by the Plaintiff on any action by
             Grange or its employees prior to September 5, 2019. The
             Court believes it is significant that there is no evidence
             that Plaintiff detrimentally relied on any action of
             Defendant Tack House Pub, LLC or on any action of
             Grange or its employees.

                    Plaintiff relies on KRS 413.265, the statute that
             allows for tolling agreements generally, to argue that the
             December 17, 2019 letter extended her limitations period.
             The December 17, 2019 letter was sent more than three
             months after the one-year period following Plaintiff’s fall
             had passed. Thus, when the letter was sent to Plaintiff by
             Grange, there was nothing to extend because Plaintiff’s
             time to file a claim had run. This Court finds that KRS
             413.265 is clear and unambiguous. There is nothing in
             the plain language of KRS 413.265 that would allow this
             Court to conclude that Plaintiff’s statute of limitations
             could be extended after it had expired. In reading the
             plain language of KRS 413.265, a tolling agreement to
             extend any statute of limitations can only be entered
             when there is actually something remaining that can be
             extended. In this instance, the statute of limitations had
             expired. Thus, there was nothing to extend.

This appeal followed.

                                         -6-
                            STANDARD OF REVIEW

             Tack House’s motion to dismiss was initially filed under the purview

of CR 12.02, but it was effectively converted to a motion for summary judgment

when the circuit court allowed discovery on and considered matters outside the

pleadings. See CR 12.02; McCray v. City of Lake Louisvilla, 332 S.W.2d 837, 840

(Ky. 1960). “The standard of review on appeal when a trial court grants a motion

for summary judgment is ‘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 a matter of law.’” Lewis v. B & R Corp., 56 S.W.3d 432, 436 (Ky.

App. 2001) (citing Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996); Palmer

v. International Ass’n of Machinists & Aerospace Workers, 882 S.W.2d 117, 120

(Ky. 1994); CR 56.03). “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.”

Lewis, 56 S.W.3d at 436 (citing Scifres, 916 S.W.2d at 781; Estate of Wheeler v.

Veal Realtors and Auctioneers, Inc., 997 S.W.2d 497, 498 (Ky. App. 1999);

Morton v. Bank of the Bluegrass and Trust Co., 18 S.W.3d 353, 358 (Ky. App.

1999)).

                                         -7-
                                    ANALYSIS

             To review, Molnar’s sole argument below in her various responses to

Tack House’s motion to dismiss was that her suit was timely. She argued that

despite the preclusive effect of KRS 413.140(1)(a), the one-year period described

in that statute had been effectively extended due to the formation of an

“agreement” of the type specified in KRS 413.265, which provides:

             Written agreements entered into in good faith and at arms
             length to extend limitations periods for the filing of civil
             actions, including agreements entered into prior to July
             15, 1988, shall be valid and enforceable according to
             their terms.

             Conversely, Tack House’s position, which the circuit court adopted, is

that KRS 413.140(1)(a) applied because no such “agreement” existed. And, as to

why no such agreement existed, the primary focus of the circuit court’s ruling was

upon the absence of any evidence indicating Molnar’s failure to file suit within the

requisite time period owed to detrimental reliance upon, or inducement from, Tack

House or Grange.

             On appeal, Molnar makes a somewhat contradictory argument

regarding why, in her opinion, the circuit court erred in dismissing her suit.

Specifically, in her appellate brief she argues “the general assembly intended for

KRS § 413.265 to expand the contract rights of parties to a litigation.” (Emphasis

added.) And, she correctly notes in her brief that “[p]rior to the enactment of KRS

                                         -8-
§ 413.265, it was ‘against the public policy of this [s]tate for’ a statutory limitation

period ‘to be extended by contract.’” (quoting Lyons v. Moise’s Ex’r, 183 S.W.2d

493, 496 (Ky. 1944) (emphasis added). But in her reply brief, Molnar adds:

             KRS § 413.265 only requires a “written agreement” and
             does not specify that it requires a contract or
             consideration. KRS § 413.265. Arguably, it substitutes
             the requirements of (1) a writing, (2) that the agreement
             be reached at “arm’s length[,]” and (3) in good faith for
             the ordinary requirement of consideration. This Court, in
             Gibson v. EPI Corp., did not contemplate consideration
             for a hypothetical binding agreement in a very similar
             fact pattern. Gibson v. EPI Corp., 940 S.W.2d 912 (Ky.
             Ct. App. 1997). This Court only hypothesized that
             parties would need to “memorialize” an agreement to
             extend the statute of limitations. Id. at 913. Surely
             Grange’s letter, which includes the means of acceptance
             by its terms, is such a writing.

             In sum, Molnar’s argument is one of statutory interpretation, and our

review is accordingly de novo. Spencer Cty. Pres., Inc. v. Beacon Hill, LLC, 214

S.W.3d 327, 329 (Ky. App. 2007). She contends that because KRS 413.265 does

not specifically state that the “agreement” it envisions is a “contract” that requires

“consideration,” no consideration was required. Therefore, she contends, the

circuit court erred in dismissing her suit based upon the absence of any evidence

indicating her failure to file suit within the requisite time period owed to

detrimental reliance upon, or inducement from, Tack House or Grange.

             We disagree. To be sure, Molnar is correct that the word “agreement”

in KRS 413.265 is not statutorily defined; and that the plain and ordinary meaning

                                          -9-
of “agreement” is not necessarily “a contract.” See, e.g., Agreement, BLACK’S

LAW DICTIONARY 67 (7th ed. 1999) (defining “agreement” as “[a] mutual

understanding between two or more persons about their relative rights and duties

regarding past or future performances; a manifestation of mutual assent by two or

more persons.”).

              However, for purposes of interpretation, the language of a statute must

be considered as a whole, rather than in a vacuum. Cosby v. Commonwealth, 147

S.W.3d 56, 58-59 (Ky. 2004). And, the “agreement” identified in KRS 413.265 –

which must be “entered into,” made in “good faith,” “valid,” and “enforceable” at

law “according to [its] terms” – bears the hallmarks of an arrangement ordinarily

viewed as a contract. See, e.g., Contract, BLACK’S LAW DICTIONARY 318 (7th ed.

1999) (defining “contract” as “[a]n agreement between two or more parties

creating obligations that are enforceable or otherwise recognizable at law[.]”); see

also Leslie v. LCA-Vision, Inc., No. 2009-CA-000899-MR, 2010 WL 2540169, at

*2-3 (Jun. 25, 2010)5 (applying rules of contract interpretation to an agreement

entered into pursuant to KRS 413.265).

              As for whether “consideration” was required, two more rules of

statutory interpretation come into play. First, when interpreting a statute, words

5
 We deem LCA-Vision, Inc., persuasive and believe it offers sound guidance on this issue
consistent with the requirements of CR 76.28(4)(c).

                                             -10-
are to be afforded their plain meaning unless doing so would lead to an absurd

result or wholly unreasonable conclusion. Cosby, 147 S.W.3d at 59; Kentucky

Occupational Safety and Health Review Comm’n v. Estill Cty. Fiscal Court, 503

S.W.3d 924, 929 (Ky. 2016). And second, “[w]e must presume the General

Assembly was aware of the status of the law, including the common law,” when it

enacted KRS 413.265. Garland v. Miller, 611 S.W.3d 275, 279 (Ky. App. 2020).

               With that said, prior to when KRS 413.265 was enacted in 1988,

detrimental reliance – recognized by equity as a substitute for consideration6 – had

long been required for purposes of enforcing a promise to refrain from relying

upon limitations as a defense. See, e.g., Carroll Cty. Mem’l Hosp. v. Yocum, 489

S.W.2d 246, 248 (Ky. 1972) (explaining Kentucky courts have “emphasized . . .

that the real inquiry should be whether the party against whom the statute was

asserted was justified in relying upon the representations and activities of the

insurance adjuster in delaying filing suit until time had run out[,]” and finding

estoppel appropriate where the insurer had unequivocally agreed, prior to the

expiration of the statutory period, to waive the statute of limitations for a

reasonable time); see also Miller v. Thacker, 481 S.W.2d 19 (Ky. 1972) (holding

that insurer was estopped from asserting a limitations defense where plaintiff failed

6
  See McCarthy v. Louisville Cartage Co., Inc., 796 S.W.2d 10, 12 (Ky. App. 1990) (citations
omitted) (“The whole theory of a promissory estoppel action is that detrimental reliance becomes
a substitute for consideration under the facts of a given case. . . . Numerous oral and gratuitous
promises have been enforced on this basis.”).

                                              -11-
to timely initiate suit in reliance upon the insurer’s several misrepresentations of

fact to plaintiff); Cuppy v. Gen. Accident Fire & Life Assurance Corp., 378 S.W.2d

629, 630 (Ky. 1964) (refusing to apply equitable estoppel when the insurance agent

merely stated “they would take care of everything”); Pospisil v. Miller, 343

S.W.2d 392 (Ky. 1961) (finding that estoppel did not apply based upon the

insurance agent’s representations that settlement would be reached after plaintiff

had received all of her bills and physically recovered); Chesapeake and N. Ry. v.

Speakman, 114 Ky. 628, 71 S.W. 633 (1903) (the defendant misled the plaintiff by

promising compensation and then reversing its position once the statute of

limitations had run).

             Likewise, Molnar has misread Gibson v. EPI Corp., 940 S.W.2d 912

(Ky. App. 1997), a case that undermines her argument, rather than assists it.

There, this Court not only hypothesized that parties would need to “memorialize”

an agreement to extend the statute of limitations made pursuant to KRS 413.265;

we also noted such an agreement would have been necessary if, consistent with

that appellant’s argument, “her failure to comply with the applicable statute and

Civil Rule was induced by statements of adjusters for appellees’ insurance

companies.” Id. at 913 (emphasis added). Once again, this is an acknowledgement

that a promise to extend a limitations period, to be enforceable within the context

of KRS 413.265, requires either detrimental reliance or some other consideration.

                                         -12-
See Cooke v. Louisville Trust Co., 380 S.W.2d 255, 257 (Ky. 1964) (explaining a

promise of forbearance from filing suit qualifies as consideration for a legally

enforceable agreement); see also Huff Contracting v. Sark, 12 S.W.3d 704, 707

(Ky. App. 2000).

              In short, interpreting the word “agreement” in KRS 413.265

consistent with Molnar’s understanding of that statute would lead to an absurd

result and wholly unreasonable conclusion: from a plain reading, nothing in KRS

413.265 evinces any intention to abrogate the existing common law necessity of

either consideration or detrimental reliance to enforce an agreement to extend the

applicable statute of limitations. We have found no Kentucky authority to the

contrary, and Molnar presents none apart from her own interpretation of the

statute. Accordingly, we discern no error in the circuit court’s assessment that

Grange’s December 17, 2019 letter to Molnar – which undisputedly lacked

consideration, and upon which Molnar (who had already missed the deadline for

filing suit) could not have detrimentally relied – failed to qualify as an enforceable

agreement pursuant to KRS 413.265.7

              Next, Molnar argues Grange’s December 17, 2019 letter could

alternatively be construed as a common-law waiver of Tack House’s right to assert

7
  Because we affirm on this basis and it is dispositive of this issue, we decline to review the
argument as to whether parties may contractually extend a non-jurisdictional statutory deadline
that has already lapsed.

                                              -13-
the statute of limitations and that we could alternatively reverse the circuit court on

that basis. Essentially, she argues that Grange’s unilateral mistake of law, set forth

in a letter it apparently never informed Tack House about, amounted to Tack

House’s “voluntary and intentional surrender or relinquishment of a known right,

or an election to forego an advantage which [it] at [its] option might have

demanded or insisted upon.” Barker v. Stearns Coal & Lumber Co., 291 Ky. 184,

163 S.W.2d 466, 470 (1942) (describing the essentials of a “waiver” theory).

             However, as Tack House notes in its brief (and specifically in its

request for this Court to strike this argument from Molnar’s brief), “waiver” is a

separate legal theory that Molnar never presented below. See Regional Jail

Authority v. Tackett, 770 S.W.2d 225, 228 (Ky. 1989) (citations omitted) (“The

Court of Appeals is without authority to review issues not raised in or decided by

the trial court.”). Moreover, despite her request for palpable error review of this

new argument, Molnar’s brief only offers the following explanation of how the

circuit court’s failure to address this theory, which she never raised, warrants relief

under CR 61.02:

             [A]llowing an insurance adjuster to get someone to file a
             lawsuit by promising to extend the statute of limitations
             and then subsequently move to dismiss by asserting the
             statute of limitations as a defense would be a “manifest
             injustice.”

(Emphasis added.)

                                         -14-
             For purposes of CR 61.02 review, the appellate court is required to

determine whether the substantial rights of a party have been affected; and, if so,

whether manifest injustice resulted. See Fraley v. Rice-Fraley, 313 S.W.3d 635,

641 (Ky. App. 2010). That said, Molnar fails to indicate what “substantial right”

of hers was affected. Nor, for that matter, does Molnar explain how the circuit

court’s failure to sua sponte determine that Tack House had effectuated a binding

waiver in this matter qualified as an error that “so seriously affected the fairness,

integrity, or public reputation of the proceeding as to be shocking or

jurisprudentially intolerable.” See Commonwealth v. Jones, 283 S.W.3d 665, 668

(Ky. 2009) (explaining the requisites of “manifest injustice”) (internal quotation

marks and citations omitted). Accordingly, we decline to regard this argument as a

basis for reversal or to review it further.

             Lastly, Molnar takes issue with a second order the circuit court

entered on September 30, 2020, which denied a motion she filed to amend her

complaint in this matter. In the order, the circuit court concluded that the issues

raised in Molnar’s motion were moot because the “granting of [Tack House’s]

Motion to Dismiss disposed of all issues as no claim could be made as the one-year

statute of limitations to bring a claim had expired before Plaintiff filed suit.” We

agree and affirm the circuit court’s order.

                                          -15-
                                  CONCLUSION

             The extent of the arguments Molnar preserved for appeal fails to

indicate the circuit court erred in dismissing her suit against Tack House.

Accordingly, we AFFIRM.

             ALL CONCUR.

BRIEFS FOR APPELLANT:                     BRIEF FOR APPELLEE:

James M. Yoder                            Melissa Thompson Richardson
Lexington, Kentucky                       Summer R. Bablitz
                                          Lexington, Kentucky
Ryan D. Mosley
Prestonsburg, Kentucky

                                        -16-