TOYOTA MOTOR MANUFACTURING KENTUCKY INC v. JOHNSON

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Supreme Court of Kentucky.

TOYOTA MOTOR MANUFACTURING, KENTUCKY, INC., Appellant, v. Honorable Robert G. JOHNSON, Judge, Scott Circuit Court and Jeff Sergent, Real Party in Interest, Appellees.

No. 2007-SC-000647-MR.

Decided: March 19, 2009

Jeffrey Alan Savarise, Fisher & Phillips, Mark Scott Riddle, Brent Robert Baughman, Greenebaum Doll & McDonald, PLLC, Louisville, KY, John Choate Roach, Ransdell & Roach, PLLC, Lexington, KY, Counsel for Appellant. Robert G. Johnson, Judge, Scott Circuit Court, Georgetown, KY, pro se appellee. Herbert Lee Segal, Dennis Franklin Janes, Segal, Lindsay & Janes, PLLC, Louisville, KY, Robert Louis Roark, Jeffrey Scott Walther, Walther, Roark & Gay, PLC, Elizabeth Snow Hughes, Nora Ann Koffman, Gess, Mattingly & Atchison, PSC, Kimberly Lynn Dawahare, The Dawahare Law Firm, Lexington, KY, Counsel for Real Party in Interest, Jeff Sergent.

This is an appeal of a writ action filed in the Court of Appeals by Toyota Motor Manufacturing, Kentucky, Inc., seeking to bar enforcement, for lack of jurisdiction, of an Opinion and Order of the Scott Circuit Court entered on March 12, 2007, allowing Appellee Jeff Sergent and four other plaintiffs to reopen a previously dismissed case concerning a wage and hour dispute. The Court of Appeals denied the writ. Because CR 60.02(f) does not apply to the facts of this case, the underlying matter having been finally dismissed on November 22, 2000, and the Scott Circuit Court therefore had no jurisdiction to proceed, we reverse and order that the writ be issued.

I. Background

In August 1999, Sergent and the four other plaintiffs, claiming to represent a class of possibly a thousand or more, filed an action under KRS Chapter 337 in Scott Circuit Court. On November 22, 2000, the Scott Circuit Court followed then existing and binding law, Early v. Campbell County Fiscal Court, 690 S.W.2d 398 (Ky.App.1985), and granted Toyota Motor Manufacturing Kentucky, Inc.'s motion to dismiss. The Court of Appeals had determined in Early that a circuit court did not have original jurisdiction to hear wage and hour disputes. The court “read together” KRS 337.310(1) and KRS 337.385(1) to conclude that the facts of a case must first be determined by the Commissioner of Labor before a circuit court had jurisdiction to review the matter.

The Court of Appeals affirmed the Scott Circuit Court's dismissal of the action, and this Court denied discretionary review on February 12, 2003. The circuit court's dismissal became final on that date. CR 76.30. Sergent and the other plaintiffs then began the process of seeking an administrative remedy by filing a complaint with the Kentucky Department of Labor (“KDOL”).

In 2005, this Court issued its opinion in Parts Depot, Inc. v. Beiswenger, 170 S.W.3d 354 (Ky.2005), holding that circuit courts have parallel jurisdiction over wage and hour claims under KRS Chapter 337. This decision did not deprive the KDOL of administrative jurisdiction, but merely held that the courts provide an alternative forum. Thus, under Parts Depot, plaintiffs may choose whether to proceed in the circuit court or before the Department of Labor when pursuing wage and hour disputes.

Fourteen months later, Sergent filed a CR 60.02 motion in Scott Circuit Court seeking to reopen the case it had previously dismissed. The circuit court granted the motion, finding that the equities weighed in favor of granting relief under CR 60.02. Toyota then sought a writ of prohibition in the Court of Appeals, claiming the Scott Circuit Court was acting without jurisdiction, and that CR 60.02 did not offer any grounds for the circuit court to regain jurisdiction over this final matter. The Court of Appeals denied the writ, and Toyota appealed to this Court as a matter of right. Ky. Const. § 115; CR 76.36(7)(a).

II. Analysis

Pursuant to CR 59.05, the summary judgment entered in Toyota's favor became final ten days after its entry, and the circuit court had no further jurisdiction, except to consider a CR 60.02 motion. Commonwealth v. Gaddie, 239 S.W.3d 59, 61-62 (Ky.2007).

No CR 60.02 motion was filed, however, until fourteen months after Parts Depot-and some six years after the summary judgment dismissing the action against Toyota. Sergent cited CR 60.02(f) as the authority for the reopening. That provision allows a court to set aside a final “judgment, order or proceeding” on several specified grounds, ending with clause (f) which refers to “any other reason of an extraordinary nature justifying relief.”

This clause requires extraordinary circumstances to be shown before relief may be granted and may be invoked only under the most unusual circumstances. Howard v. Commonwealth, 364 S.W.2d 809 (Ky.1963); Lewallen v. Commonwealth, 584 S.W.2d 748 (Ky.App.1979). As one case has noted, such relief is available due to a change in the law only in “aggravated cases where there are strong equities.” Reed v. Reed, 484 S.W.2d 844, 847 (Ky.1972). This stringent requirement is in the rule because of the desirability of according finality to judgments, and the rule's remedy should be invoked only with extreme caution. Cawood v. Cawood, 329 S.W.2d 569 (Ky.1959).

Under the facts of this case, the Scott Circuit Court had no jurisdiction, because a change in the law is not a sufficiently extraordinary circumstance to grant any relief under CR 60.02, except where the direst injustice would result otherwise. Sergent faces no such injustice. This is especially true here because he was not denied access to all forums. Thus, there was no denial of due process. The fact that the KDOL, as the available forum, cannot grant liquidated damages and attorney's fees does not somehow make this case extraordinary. Even though Sergent had no real choice as to which forum should hear his case, he nonetheless has received the benefit of the KDOL's investigative capacity, law enforcement powers, and regulatory ability during the process. Sergent could thus easily obtain more information than he otherwise could through discovery-all at no cost-through KDOL's enforcement powers. The same could not be said for Toyota.

This situation is not unlike many others where a subsequent change in the law would make an earlier judgment different. Particularly this is true here, where the decision in Early had been the controlling authority for twenty years, undoubtedly resulting in a large number of previous plaintiffs in the same situation. The door cannot be opened for Sergent without raising the question of where to draw the line. Indeed, the question may be asked whether Sergent even met the timeliness requirement of CR 60.02(f), a reasonable time, since he waited fourteen months after the Parts Depot decision to raise the motion. Of more significance, however, is that his circumstance is not “extraordinary.”

The only unfairness weighing in favor of Sergent is his inability to take advantage of a change in the law that occurred years after his own case became final. But if that is all that is necessary to overcome finality by way of CR 60.02(f), then finality is meaningless and CR 60.02's requirement of “aggravated cases where there are strong equities” is obviated. Reed, 484 S.W.2d at 847.

The fact that Sergent had not completed his core claim, which was proceeding in the administrative forum, does not change the analysis. This is a distinction without a difference because Sergent's claim of a right to the circuit court as a forum was completed, and that ruling had been final for years.

It has been argued that Sergent did not get a fair opportunity to present his claim in the circuit court, which allegedly weighs in favor of granting relief pursuant to Bethlehem Minerals Co. v. Church and Mullins Corp., 887 S.W.2d 327, 329 (Ky.1994). See also Fortney v. Mahan, 302 S.W.2d 842, 843 (Ky.1957). This argument clearly fails because Sergent did indeed have the opportunity to be heard by the court when Toyota made its motion to dismiss under Early, which was all the law that was available to him at the time. This argument also fails because it ignores that there is a second factor in the cases cited: whether granting CR 60.02 relief would be inequitable to other parties. Bethlehem Minerals Co., 887 S.W.2d at 329; Fortney, 302 S.W.2d at 842. Granting CR 60.02 relief in this case surely would work a great inequity against Toyota, which had been relying on the finality of the previous decision for at least three years before the CR 60.02 motion was filed.

The Court recognizes that the trial court's decision balancing the equities and granting CR 60.02 relief is entitled to deferential review. E.g., Bethlehem Minerals Co., 887 S.W.2d at 329 (applying the abuse of discretion standard). But a trial judge's discretion is not unlimited or unfettered. “The ‘discretion’ meant is ‘judicial discretion,’ which ‘imports the invocation by a clear and trained mind of reason, courage, impartiality and conscience to accomplish in a calm spirit a result in conformity to law and just and equitable to all parties.’ ” City of Louisville v. Allen, 385 S.W.2d 179, 183 (Ky.1964), overruled in part on other grounds by Nolan v. Spears, 432 S.W.2d 425 (Ky.1968) quoting Kravetz v. Lipofsky, 294 Mass. 80, 200 N.E. 865, 867 (1936) (emphasis added). Thus, while we are deferential to such discretionary decisions, we must still engage in review (rather than rubber stamping) to determine whether they are “ ‘arbitrary, unreasonable, unfair, or unsupported by sound legal principles.’ ” Miller v. Eldridge, 146 S.W.3d 909, 914 (Ky.2004) (quoting Goodyear Tire and Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky.2000)) (emphasis added). As Allen and Miller make clear, the ultimate check on discretion is fairness.

Fairness, of course, requires consideration of the equities as they relate to all parties involved. Though the effect of a decision different from the trial court's decision in this case would deny Sergent the benefit of a favorable legal rule entitling him to his choice of forum, balanced against that is Toyota's reliance on the dismissal and the significant interest in the finality of judgments.

Also weighing against disturbing the finality of the decision in this case are the following: the fact that another remedy, backed by the force of an executive branch agency, was available to Sergent; that Sergent has sought the other remedy; that Sergent has enjoyed the executive branch's broad powers in seeking that remedy (and, if allowed to proceed in a court of law, may be able to circumvent the discovery process thanks to the exercise of those powers); and that setting aside the judgment significantly changes Toyota's position, on which it has relied for a number of years. Our cases specifically require looking at the unfairness that granting CR 60.02 relief would work against a party opposing the motion.

Toyota's long reliance on the finality of the Scott Circuit Court's summary judgment and its being subject to the KDOL's procedures, which ultimately could give relief to Sergent, entitle it to repose. There is no extraordinary reason to make this case an exception to the longstanding doctrines of finality and law of the case.

III. Conclusion

For the foregoing reason, the Court of Appeals is reversed and ordered to enter the writ of prohibition in favor of Toyota Motor Manufacturing, Kentucky, Inc.

Respectfully, I must dissent.

As the majority acknowledges, Kentucky courts have long recognized that a subsequent change in law may, in unusual circumstances, warrant post-judgment relief. See Bishir v. Bishir, 698 S.W.2d 823, 826 (Ky.1985) (“The strong and sensible policy of the law in favor of the finality of judgments has historically been overcome only in the presence of the most compelling equities.”). See also Reed v. Reed, 484 S.W.2d 844, 847 (Ky.1972) (“[A] reopening of a judgment, as to its prospective application, on the ground of a change in the law, should be done only in aggravated cases where there are strong equities.”).

Federal courts and our sister states have likewise recognized a reluctant willingness to provide post-judgment relief based on a subsequent change in law in very limited circumstances. See In re Cory's Estate, 98 N.J.Super. 208, 236 A.2d 616, 620 (1967) (recognizing that post-judgment relief can be granted where “the change [in law] is coupled with considerable equity and extreme hardship for the applicant․”). See also Adams v. Merrill Lynch, Pierce, Fenner & Smith, 888 F.2d 696, 702 (10th Cir.1989) (“In this circuit, a change in relevant case law by the United States Supreme Court warrants relief under Fed.R.Civ.P. 60(b)(6).”); Batts v. Tow-Motor Forklift Co., 66 F.3d 743, 748 (5th Cir.1995) (“Absent some showing of extraordinary circumstances, courts have refused to vacate their prior judgments where they correctly applied federal law, and a subsequent Supreme Court ruling changed the law.”) (emphasis added); Wilson v. Fenton, 684 F.2d 249, 251 (3rd Cir.1982) (“A decision of the Supreme Court of the United States or a Court of Appeals may provide the extraordinary circumstances for granting a Rule 60(b)(6) motion․”); Ritter v. Smith, 811 F.2d 1398, 1401 (11th Cir.1987) (“Though the above-mentioned cases plainly allow Rule 60(b)(6) relief where there has been a clear-cut change in the law, it is also clear that a change in the law will not always provide the truly extraordinary circumstances necessary to reopen a case.”) (emphasis in original).

Recognizing our own precedent, this Court is simply left to determine whether the Scott Circuit Court, in this case, abused its discretion in determining that the equities warranted relief pursuant to CR 60.02. While laboring at length to avoid any inference that this Court is substituting its own judgment for that of the lower court, the majority has nonetheless done exactly that. See Slip Op. at 7.

In a well-reasoned and lengthy order, the Scott Circuit Court set forth its consideration of the equities in this case. Toyota had relied on the prior judgment for some six years, and Sergent would be afforded due process by the KDOL action. However, Sergent had sought relief in the trial court and was denied even the opportunity to present his claims based on Early. Sergent argued the error of Early in its appeal and was left with no choice but a KDOL action. Therefore, Sergent was denied any opportunity to recover attorney's fees or liquidated damages. Recognizing society's interest in the finality of judgments, the Scott Circuit Court noted the fact that no judgment had been executed in this case, and that no true finality had been reached. See Ritter, 811 F.2d at 1401 (“When a judgment has been executed a concomitantly greater interest in finality exists.”).

In determining that the Scott Circuit Court abused its discretion, the majority can point to no misapplication of the law or any unreasonable interpretation of existing precedent, only to a different assessment of the equities. Where the trial court weighed more heavily the fact that no true finality had been reached in this case, the majority is more compelled by Toyota's reliance on the prior judgment of dismissal. Where the trial court noted Sergent's desire and inability to collect attorney's fees in a case that has been ongoing for over ten years, the majority is swayed by society's interest in the finality of a judgment of dismissal. Affording the trial court no deference whatsoever, the majority summarily concludes that the judgment is “unfair” because it disagrees with the trial court's “consideration of the equities as they relate to all parties involved.” Slip Op. at 8. “At the least, however, one can say that a high degree of deference to the court exercising discretionary authority is the hallmark of [abuse of discretion] review.” Calderon v. Thompson, 523 U.S. 538, 567-68, 118 S.Ct. 1489, 140 L.Ed.2d 728 (1998) (Souter, J., dissenting) (emphasis added).

The trial court spoke in this case and considered the equities involved. It is simply not the charge or function of this Court to disrupt that judgment because we might have weighed these equities differently. To do so undercuts our trial courts in their sometimes daunting and chartless voyage to do justice.

Opinion of the Court by Justice NOBLE.

MINTON, C.J.; ABRAMSON, SCHRODER and SCOTT, JJ., concur. CUNNINGHAM, J., dissents by separate opinion in which VENTERS, J., joins.

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