Court Opinion

ID: 9758283
Source: CourtListenerOpinion
Date Created: 2023-08-28 23:19:38.87344+00
Date Added: 2024-06-11T07:28:49.011013
License: Public Domain

Opinion of the Court by
Justice SCHRODER.
The issue in this condemnation case is the liability, if any, of a substituted party for the refund due to the Commonwealth, for an overpayment, pursuant to KRS 416.620. We agree with the Court of Appeals that a substituted party stands in the shoes of the original party, with the benefits as well as the detriments. Hence, we affirm.
This condemnation proceeding originated in the Letcher Circuit Court on October 20, 1993, under KRS 416.540 through KRS 416.670 and KRS 117.081, to obtain a right of way for the construction of Jenkins Bypass, U.S. Highway 23. At that time, the property was owned by Mildred Hun-saker, subject to a bank mortgage. After a series of plan changes and commissioner appointments, the trial court (in 1996) entered an interlocutory order granting possession to the Commonwealth and setting the property value at $657,782.50, the money to be paid into court by the Commonwealth. The order also authorized Mildred and the mortgagee to withdraw the fund, which they did, leaving only Mildred as a defendant.
The Commonwealth filed exceptions to the commissioner’s report, claiming that the evaluation was excessive. The matter then again languished for years without resolution. In the interim, Mildred conveyed her interest in the property to her daughters, Betty Hunsaker and Peggy Greer (in 1999). Mildred died on March 26, 2001, and on November 8, 2001, an agreed order was entered substituting Betty Hunsaker and Peggy Greer for Mildred Hunsaker. On December 19, 2002, the case finally proceeded to trial on the issue of damages. The sisters, Betty and Peggy, claimed the value of the land taken was 1.2 million dollars. The jury, however, set damages at only $300,000 — substantially less than the amount already paid by the Commonwealth. The court’s final order and judgment required Betty and Peggy to pay to the Commonwealth the excess which Mildred had received, with interest, pursuant to KRS 416.620 (condemnor entitled to judgment against owner for amount of decrease in compensation awarded). Apparently, Mildred had spent all of the monies received.
The sisters’ post-trial motions were denied and the case was appealed to the Court of Appeals. On appeal, Betty and Peggy argued that they should not be required to pay, as they had not received any of the money disbursed to Mildred, and as the payment to Mildred had occurred before they acquired the property or became parties to the action. The Court of Appeals, affirming, found the decision in Citizens Bank & Trust Co. v. McEuen, 281 Ky. 113, 134 S.W.2d 1012, 1014 (1939), to be controlling: as a general rule, when a party is substituted for another party, he “takes up the litigation with all of its benefits and with all of its burdens just where the predecessor dropped it[J”
Betty and Peggy also argued on appeal that they were relieved from liability because there was no privity between them and Mildred. The Court of Appeals declined to review that argument because it *70had not been presented to the trial court. The sisters also argued that the Commonwealth should have named the Estate of Mildred Hunsaker or attempted to collect the debt from the estate rather than from the substituted parties. Again, the Court of Appeals declined to address the issue because it was not raised before the trial court.
On appeal to this Court, the sisters argue that they are not hable for the overpayment because Mildred received the money, not them; that the Commonwealth should have gone after Mildred’s Estate, not her heirs or grantees; and that there was no privity of estate between Mildred Hunsaker and the substituted parties.
We note that Betty Hunsaker and Peggy Greer were substituted by an agreed order1 for Mildred Hunsaker. If the Commonwealth had proceeded against the heirs, or the estate, liability may have been limited to the value of the estate or to the amount inherited from Mildred. Mildred also had a son, who was a grantee of the property and who did not join in the substitution (CR 25.01). If the Commonwealth had proceeded against the sisters as grantees in the 1999 deed (CR 25.03), there may have been a question of privity or a question as to the validity of the deed after the trial court awarded possession and title to the Commonwealth. However, with an agreed order of substitution, these issues were not before the trial court. Of course, at the time of substitution, the sisters were expecting a judgment of around 1.2 million dollars. Substitution did not appear risky, but with a refund due, the exact nature of the rights and obligations of substitution become crucial.
We agree with the Court of Appeals’ application of the general rule in the present case that the substituting party takes the litigation with all of its benefits and burdens. McEuen, 281 Ky. at 117, 134 S.W.2d at 1014.2 Hollon v. Rose, 268 S.W.2d 641, 642 (Ky.1954), recognized an assignee of an interest in real estate may be made a party to suit involving the real estate (partition). More telling is Works v. Winkle, 314 Ky. 91, 234 S.W.2d 312 (1950), which involved an assignment of a right to recover after suit was filed. The Court held the assignee may, but does not have to, intervene. Id. at 316. In the case sub judice, the sisters chose to intervene and substituted themselves for their mother. Their argument was that they were the real parties in interest, which in effect concedes that there is privity. Having done so, they cannot now complain that they are not the real parties in interest, and that they only wanted the benefits but not the burdens.
Accordingly, the opinion of the Court of Appeals is affirmed.
All sitting. LAMBERT, C.J., ABRAMSON, CUNNINGHAM, MINTON, NOBLE, SCHRODER, JJ., concur.
SCOTT, J., dissents by separate opinion.

. CR 25.01 provides for substitution in the event of the death of a party. See also Levin v. Ferrer, 535 S.W.2d 79 (Ky.1976). CR 25.03 provides for a substitution of parties where the original party transfers her interest.

. See also 59 Am.Jur.2d Parties § 359 (2007).