RENDERED: MARCH 23, 2023
TO BE PUBLISHED
Supreme Court of Kentucky
2021-SC-0163-DG
LAUREN SAVAGE, INDIVIDUALLY AND APPELLANTS
AS ADMINISTRATRIX OF THE ESTATE
OF JAMES SAVAGE
ON REVIEW FROM COURT OF APPEALS
V. NO. 2017-CA-0615
JEFFERSON CIRCUIT COURT NO. 12-CI-006824
CO-PART OF CONNECTICUT, INC. APPELLEES
D/B/A CO-PART AUTO AUCTIONS;
TOM TAYLOR; DANIEL BOND; WILLIS
JOHNSON; PAUL STYER; WILLIAM
FRANKLIN; ALLSTATE INSURANCE
COMPANY; PROPERTY & CASUALTY
INSURANCE COMPANY OF HARTFORD;
LIBERTY MUTUAL FIRE INSURANCE
COMPANY; AUTO USADOS FELIX;
FELIX VENTURA BARRAZA;
CHAPA, INC.; MARGARITA CHAPA; AND
OSCAR RAMOS
AND
2021-SC-0167-DG
CO-PART OF CONNECTICUT, INC APPELLANTS
D/B/A CO-PART AUTO AUCTIONS;
TOM TAYLOR; DANIEL BOND; WILLIS
JOHNSON; PAUL STYER; AND
WILLIAM FRANKLIN
ON REVIEW FROM COURT OF APPEALS
V. NO. 2017-CA-0615
JEFFERSON CIRCUIT COURT NO. 12-CI-006824
LAUREN SAVAGE, INDIVIDUALLY AND APPELLEES
AS ADMINISTRATRIX OF THE ESTATE
OF JAMES SAVAGE
OPINION OF THE COURT BY JUSTICE CONLEY
AFFIRMING IN PART & REVERSING IN PART
This case arose out of a series of events in 2012 that culminated in the
death of James Savage on I-65 near Louisville after he was thrown from his
motorcycle and runover by Oscar Ramos. This case is before us on review from
the Court of Appeals’ sixty-nine-page opinion that ultimately remanded back to
the Jefferson Circuit Court for a new trial. The Court of Appeals addressed
twenty-four separate issues that occurred in the circuit court between
initiation of the lawsuit in 2012 and final disposition in 2017. Preservation, or
lack thereof, has distilled the appeal before this Court to only a handful of
issues. Before we address the underlying facts and law, however, it is
necessary to delineate precisely what this Court is and is not addressing. We
affirm in part, reverse in part, and remand for a new, partial trial on damages.
I. Issues Identified on Appeal
Our rules require a party to address specifically each issue, the relevant
law, and a statement as to why the judgment below should be reviewed, in a
2
motion for discretionary review. CR1 76.20(3)(d).2 Failure to comply with this
rule precludes review. Indiana Ins. Co. v. Demetre, 527 S.W.3d 12, 41 (Ky.
2017) (citing Ellison v. R & B Contracting, Inc., 32 S.W.3d 66, 71 (Ky. 2000)).
Both Savage and Co-part argue that the other has failed to comply with CR
76.20(3)(d); consequently, several issues are said to be improperly appealed
and not truly before the Court.
Co-part formulated two questions of law to be reviewed but then
discussed in the body of its motion two additional issues. Savage did not
formulate any questions but rather stated there were three questions of first
impression and used each issue as a subheading in the body of her motion.
Moreover, Savage has briefed the issue of Liberty Mutual Fire Insurance’s
dismissal and Allstate Insurance Company’s ownership of the Toyota Tacoma
under Kentucky law as opposed to Maryland law, when neither of those issues
were mentioned in her motion for discretionary review. Specifically, in Allstate’s
case, the motion for discretionary review mentions Allstate’s ownership only in
the context of KRS Chapter 186A.500. But the trial court and Court of Appeals
determined Allstate’s ownership under Maryland law. Nowhere in the motion
for discretionary review is there a conflict-of-laws analysis, much less a
discussion of Maryland law; nowhere does it even hint that the Court of
Appeals committed error by applying Maryland law, and such an allegation
1 Kentucky Rules of Civil Procedure.
2 This appeal was commenced prior to the new Rules of Appellate Procedure
taking effect. Under the current rules, the proper citation is to RAP 44(c)(5).
3
would be perplexing since the Court of Appeals stated all parties agreed
Allstate’s ownership was controlled by Maryland law.
Those issues clearly raised and argued in compliance with CR 76.20(3)(d)
will be addressed. Demetre, 527 S.W.3d at 41. Therefore, we consider the
properly appealed issues to be
• first, was Property & Casualty Insurance Company of Hartford the owner
of the Jeep Wrangler at issue according to KRS 186A.530(3), and was Co-
part required to obtain proof of insurance pursuant to KRS3 186A.215
and 186A.220;
• second, do KRS 186A.100 and 186A.520 require or prohibit placement of
a temporary registration tag on a vehicle with a salvage title;
• third, whether the Court of Appeals correctly interpreted and applied
KRS 189.224 to Co-part;
• fourth, did the Court of Appeals improperly engage in fact-finding that
subsequently, according to Co-part, affected its judgment on other
issues;
• fifth, does strict liability apply to KRS Chapter 186A.500;
• sixth, did the Court of Appeals err when it ruled the trial court abused its
discretion by allowing Co-part to withdraw an admission; and
3 Kentucky Revised Statutes.
4
• finally, did the trial court properly preclude from the damages calculation
the Social Security Disability benefits of James Savage pursuant to Aull
v. Houston, 345 S.W.3d 232 (Ky. App. 2010).
II. Facts and Procedural Posture
We adopt the factual recitation of the Court of Appeals as our own, with
one exception explained below.
This is a multi-party action relating to an automobile accident that
occurred on March 6, 2012. The underlying facts and relationships
among the parties are unique and defy simple explanation.
Likewise, the procedural history and complex issues presented
would be difficult to imagine if presented as a fact-pattern for an
essay question on the bar examination. Therefore, we shall first set
out the parties and the factual history of this matter, followed by
the procedural history of this action.
Co-part provides online motor vehicle auction services. It
maintains facilities throughout the country, and most relevant to
this case, has locations in Finksburg, Maryland and Louisville,
Kentucky. Co-part is a licensed motor vehicle dealer and auction
dealer in both Maryland and Kentucky. Among other things, Co-
part contracts to store and sell salvage vehicles on behalf of
insurance companies who have acquired them after declaring them
a total loss.
Prior to the accident, Allstate Insurance Company (Allstate)
acquired title to a totaled 2003 Toyota Tacoma from an insured.
Thereafter, Allstate obtained a Maryland salvage title and delivered
the vehicle to Co-part's Maryland location. Similarly, Property and
Casualty Insurance Company of Hartford (Hartford) acquired title
to a totaled 2004 Jeep Wrangler from an insured. Hartford
delivered the Jeep and the Kentucky salvage title documents to the
Co-part location in Louisville.
Under its service agreements with insurance companies, Co-part is
required to do a “run and drive” verification and to state in its
auction description whether the vehicles are drivable or towable.
The service agreements also required Co-part to maintain tires on
5
all vehicles where practicable. The agreements permitted Co-part
to refuse to release any vehicle for any reason. Co-part advertised
the Toyota as drivable but determined that the Jeep was in a non-
run and non-towable condition. Co-part included these
descriptions in its online advertising of the vehicles.
Sales and delivery of vehicles are limited only to paid Co-part
“members.” Members receive a number, which is used to access
Co-part auctions. Members also use the number to fund a credit
balance for payment of online auction purchases. Co-part
facilitates the transfer of title from the insurer to the buyer. Co-
part either offers to deliver a purchased vehicle to the buyer for a
fee or releases the vehicle to an authorized representative of the
buyer. In the case of the latter, the representative must present the
buyer identification number and the lot number of the specific
vehicle. Upon receipt of this information, Co-part would deliver the
vehicle to the buyer at a “bullpen” within Co-part's compound. In
the case of a salvage or non-drivable vehicle, Co-part would deliver
the vehicle to the bullpen using a forklift.
In February, the [above-mentioned] vehicles were sold to Ventura
Felix Barraza d/b/a Autos Usados Felix (AUF), a used auto and
parts dealer located in Los Mochis, Sinaloa, Mexico. AUF sent
Oscar Ayon Ramos (Ramos) to pick up the vehicles. On his way to
pick up the vehicles, Ramos obtained two Arizona Restricted Use
Three-Day Permits through Chapa Auto Sales (Chapa), a used car-
dealer located in El Paso, Texas. Ramos then proceeded to
Maryland to pick up the Toyota.
Following the online sales, Co-part, on Allstate's behalf, executed
an assignment and warranty of title on the Toyota's Certificate of
Salvage in favor of AUF. Similarly, Co-part, on Hartford's behalf,
executed a transfer of the Jeep's Kentucky Salvage title to AUF.
AUF directed Co-part to deliver the title document to the Jeep to
“Ramon Martar Bubio,” and Co-part's records indicate that it did
so on March 2, 2012.
On March 5, 2012, Ramos appeared at Co-part's Maryland facility.
He provided the AUF member number and lot number of the
Toyota. Co-part then delivered the Toyota to Ramos. Co-part also
gave Ramos the Toyota's Certificate of Salvage, which it had
executed on behalf of Allstate.
6
Ramos then affixed the Arizona Permit to the Toyota and drove the
vehicle to Co-part's Louisville facility. On March 6, he arrived at
the Louisville facility, where he presented the AUF member number
and lot number of the Jeep. As with the Toyota, Co-part executed
the dealer assignment portion of the Jeep's title on Hartford's
behalf. At the direction of AUF, the title was delivered to Bubio on
March 2.
At this point the facts become muddled. The Court of Appeals
recounted, “Upon receipt of the documentation, Co-part delivered the
Jeep to Ramos. Ramos then affixed the Arizona Permit to the Jeep and
attached a tow bar between the Toyota and the Jeep. Ramos then left the
Co-part facility with the Jeep being towed by the Toyota.” This was based
on admissions of Chapa. But Co-part has appealed this specific
statement as without any evidentiary basis against it because
admissions of one co-defendant generally cannot be used against
another, thus, improper fact-finding. Co-part’s proffered explanation for
how the Jeep left the Louisville facility is equally lacking in evidentiary
foundation. It states that a tow-truck must have arrived and towed the
Jeep to another destination where Ramos then attached the towbar and
Jeep to the Tacoma. Testimony from Savage’s investigator detailed that
he was informed by a Co-part employee that Ramos affixed the towbar
and Jeep while at Co-part. Co-part, however, says there is no proof this
occurred and cites to an expert’s testimony that affixing the towbar and
Jeep to the Tacoma would have required at least forty-five minutes.
Additionally, the employee who delivered the Jeep via forklift to Ramos,
7
stated Ramos was gone only minutes afterward. This, combined with
lack of eyewitness testimony that Ramos did affix the towbar and Jeep at
the Co-part facility, is the basis for Co-part’s proposal that Ramos must
have been towed out with the Jeep by a tow-truck. Nonetheless, it is
undisputed that the Toyota was towing the Jeep via an attached towbar
at the time of the accident. Subsequently,
while driving on I-65 in Louisville, Ramos lost control of the
vehicles while changing lanes. James Savage was riding a
motorcycle in the same vicinity. There was testimony that another
vehicle had lost a load of wooden pallets, requiring other drivers to
swerve to avoid them. There was also testimony that Savage struck
one of the pallets and was thrown from his motorcycle. Ramos’
vehicles side-swiped a tractor-trailer truck, and then ran over
Savage, who was lying in the roadway. Savage was killed at the
scene.
A comprehensive account of the procedural history, given our more
limited review, would only serve to confuse rather than clarify. Pertinently, the
claims against Allstate were disposed by summary judgment in 2014, with the
trial court concluding Allstate had transferred ownership of the Tacoma
according to Maryland law prior to the accident and had no duty thereafter. In
2015, partial summary judgment was granted to Co-part, particularly as to
KRS 186A.100 and 186A.520, but the claim based on KRS 189.224 survived.
Later that year, the claims against Hartford were disposed by summary
judgment with the trial court concluding that Hartford had transferred
ownership according to Kentucky law prior to the accident and that Co-part
was an independent contractor therefore, any negligence it may have
committed could not be attributed to Hartford. Prior to trial, the trial court
8
allowed Co-part to withdraw an admission it had made early in the discovery
phase that Ramos “drove out” of its Maryland facility in the Tacoma. The trial
court found no prejudice in the withdrawal because a 2014 deposition of a Co-
part representative—who stated that the phrase “drove out” did not refer to the
Tacoma leaving the facility but rather to the Co-part employee delivering the
vehicle to Ramos while still in the facility—had put Savage on notice that the
issue was disputed. The court reasoned Savage should have been aware from
this deposition that Co-part would contest the admission’s meaning, thus, she
should have sought more discovery on the issue.
The jury concluded there was no negligence or negligent entrustment in
Co-part’s conduct, but “determined that Chapa, through its agent Ramos, was
solely at fault for the damages. The jury awarded the Estate a total of
$75,164.00 in compensatory damages and $5,000,000.00 in punitive damages.
The jury also awarded Lauren Savage $500,000.00 for her loss-of-consortium
claims.” After some post-trial motion practice irrelevant here, the trial court
confirmed the jury verdict, and the case was appealed.
III. The Court of Appeals’ Decision
Judge Maze, writing for a unanimous panel, held as to Co-part’s alleged
obligation to obtain proof of insurance from Ramos before delivering physical
possession of the vehicles, that Co-part had no such obligation. Citing Gainsco
Companies v. Gentry, 191 S.W.3d 633 (Ky. 2006), the court concluded the
“insurance-verification requirement of KRS 186A.220(5)(b) only applies if a
dealer wishes to effectively transfer ownership of a vehicle without
9
simultaneously transferring possession of the certificate of title.” Because Co-
part had transferred title prior to physical delivery of the vehicle, this exception
and insurance verification was inapplicable in 2012. As to Hartford’s ownership
of the Jeep, the court concluded, by the same reasoning, that title had been
transferred by Hartford to AUF on March 2, 2012, four days before the physical
delivery of the Jeep. Consequently, Hartford had no duty to ensure proof of
insurance before delivery to Ramos.
As to the statutory claim against Co-part for violating KRS 186A.100
(requiring temporary registration tags be placed on newly sold vehicles by the
motor vehicle dealer), the court held “there is no evidence that AUF is licensed
to operate as a motor vehicle dealer anywhere in the United States[,]” thus,
“AUF must be considered a consumer and thus a purchaser for use.” The trial
court had concluded a temporary tag was not mandated by law for salvage-
titled vehicles and denied this claim from going to the jury. The Court of
Appeals, however, concluded “Co-part is liable for violation of this section only
to the extent that the Jeep was required to display a license plate.” And
because
Co-part required purchasers to obtain license plates for any
vehicles which were intended to be operated on the highways . . .
there is at least a factual question whether Co-part reasonably
believed the permits were sufficient. Likewise, there is a factual
issue whether Co-part was aware or should have been aware that
Ramos intended to use the Jeep in a manner requiring the display
of a valid license plate.
Consequently, the Court of Appeals ordered a new trial allowing the statutory
claim to proceed to the jury.
10
Similarly, the Court of Appeals reversed the trial court’s refusal to give an
instruction on the claim against Co-part for violating KRS 189.224. That
statute prohibits any person that is an employer or otherwise in a position of
authority over the operator of a vehicle, “to require or knowingly permit the
operation of such vehicle upon a highway in any manner contrary to law.” Both
the trial court and Court of Appeals focused on the word “operation” and its
definition in applying this statute. The Court of Appeals believed Co-part’s
“duties only require that it not knowingly permit vehicles to be operated in a
manner contrary to law[,]” therefore, it remanded for a new trial on this
statutory claim as well. In discussing this issue, the Court of Appeals also
commented that a relevant question “is whether the Jeep was being ‘operated’
on the highway in violation of KRS 186A.520 . . . because Co-part's liability is
founded upon whether it knowingly permitted Ramos to operate the Jeep on
the highways of the Commonwealth.”
As an evidentiary matter, the Court of Appeals ruled the trial court
abused its discretion when it allowed Co-part to withdraw the admission,
discussed above. For that reason, it remanded for a new trial.
Finally, the Court of Appeals discussed the damages calculation because
of its remand for a new trial. At trial, Co-part had argued successfully against
including Savage’s Social Security Disability benefits from being included in the
calculation of damages, citing to Aull v. Houston, 345 S.W.3d 232 (Ky. App.
2010). Aull has been interpreted to prohibit SSD benefits, as they are not
earned income therefore cannot be considered in wrongful death claims for
11
purposes of damages, as such damages are measured “by the destruction of
the decedent's power to labor and earn money.” Id. at 235 (quoting W.L. Harper
Co. v. Slusher, 469 S.W.2d 955, 959 (Ky. 1971)). The appellate court expressed
its doubt that Aull should be applied in such a broad, categorical manner but
concluded that only this Court could abrogate or overrule Aull thus, reluctantly
affirmed the trial court’s decision.
We granted discretionary review principally to consider the application of
Aull and the novel issue of salvage titled vehicles within the overall framework
of determining ownership for liability insurance purposes. Further facts will be
developed as necessary. We now address the merits of the appeal.
IV. Analysis
A. Hartford not the Statutory Owner of the Jeep
Savage argues Hartford was the owner of the vehicle, first, because the
vehicle remains to this day titled in its name; but secondly, because a bona fide
sale did not occur between Hartford and AUF through its agent, Co-part, due to
Co-part’s failure to strictly comply with KRS 186A.220. Hartford argues it
ceased to be the owner of the vehicle on February 18, 2012, when it transferred
the necessary title documents and possession of the vehicle to its power of
attorney, Co-part. Subsequently, Co-part executed a bona fide sale on March 6,
2012, upon delivery of physical possession of the Jeep to Ramos, with delivery
of the title documents having occurred four days earlier on March 2, 2012. Co-
part, however, argues that it never had ownership of the Jeep at any time as
well as arguing KRS 186A.220 is inapplicable.
12
“Kentucky is a certificate of title state for the purposes of determining
ownership of a motor vehicle and requiring liability insurance coverage.” Potts
v. Draper, 864 S.W.2d 896, 898 (Ky. 1993). “The owner of a motor vehicle is the
title holder unless a motor vehicle is subject to a valid conditional sale for
liability insurance purposes.” Id. KRS 186A.220(5)
sets forth an exception to the general rule that the party holding
the certificate of title is the owner of the vehicle for insurance
purposes. If a dealer wishes to effectively transfer ownership of a
vehicle without simultaneously transferring possession of the
certificate of title, he must satisfy two requirements: (1) he must
obtain the purchaser's consent to file the certificate of title and
other documents on behalf of the purchaser, and (2) he must verify
that the purchaser has obtained insurance on the vehicle before
relinquishing possession.
Gainsco, 191 S.W.3d at 636. Hartford did own the Jeep at one time pursuant to
KRS 186A.530(3).4 Savage argues this Court should conclude Hartford is the
owner of the jeep by virtue of KRS 186A.530(3), KRS 189.228,5 and KRS
186A.215(4).6 That argument fails for the simple fact that neither KRS
4 That provision states: “If ownership of a motor vehicle has been transferred to
an insurance company through payment of damages, the insurance company making
the payment of damages shall be deemed the owner of the vehicle.”
5 That provision states: “For the purposes of KRS 189.221 to 189.228, proof of
the registration of any vehicle in the name of any person shall be prima facie evidence
of ownership of said vehicle by the person in whose name it is registered, and each
violation by an owner, whether or not with the same vehicle, shall constitute a
separate offense by that owner.”
6 That provision states: “If it comes to the attention of a transferor that a
transferee did not promptly submit the necessary document within fifteen (15)
calendar days to the county clerk as required by law in order to complete the transfer
transaction, a transferor shall submit to the county clerk, in his county of residence,
an affidavit that he has transferred his interest in a specific vehicle, and the clerk shall
enter appropriate data into the AVIS system which shall restrict any registration
transaction from occurring on that vehicle until the transfer has been processed. The
Transportation Cabinet may adopt administrative regulations governing this
subsection. This subsection shall not apply to any transactions involving licensed
Kentucky motor vehicle dealers.”
13
186A.530(3) nor KRS 189.228 mandate that the title holders shall be deemed
owners for liability insurance purposes in all circumstances. Ownership is
determined either by the legal title holder or pursuant to a bona fide sale. KRS
186A.510(6). KRS 186A.215(4) obviously does not apply because this is a
transaction involving Co-part, a licensed Kentucky motor vehicle dealer. Thus,
we must determine whether Co-part’s sale to AUF was bona fide under the
appropriate statute. If so, then Hartford cannot be deemed the owner.
Savage contends that Co-part was required to obtain proof of insurance
in all sales transactions by virtue of Gainsco, and failure to do so negates any
conclusion that the sale was bona fide. The Court of Appeals concluded, per
Gainsco, that insurance verification was not required because Co-part had
transferred the certificate of title four days prior to Ramos obtaining possession
of the Jeep. The Court of Appeals correctly understood our holding in Gainsco.
That case did not hold proof of insurance was required in all motor vehicle
sales, but only “[i]f a dealer wishes to effectively transfer ownership of a vehicle
without simultaneously transferring possession of the certificate of title. . . .”
Gainsco, 191 S.W.3d at 636. We therefore affirm the Court of Appeals’
conclusion that because Co-part transferred possession of the certificate of title
to Ramon Martar Bubio on March 2, 2012, Co-part had no legal mandate to
obtain proof of insurance from Ramos. Although possession of the vehicle was
not simultaneous with delivery of the certificate of title, it is the latter which
gave Ramos, as AUF’s agent, the right to take possession of the Jeep.
14
Savage argues this Court should look to the 2016 amendment to KRS
186A.220, which reads “When a dealer assigns a vehicle to a purchaser for use
under paragraph (a) of this subsection, the transfer and delivery of the vehicle
is effective immediately upon the delivery of all necessary legal documents, or
copies thereof, including proof of insurance as mandated by KRS 304.39-080.”
KRS 186A.220(5)(d). Savage believes this provision codified Gainsco. As we
have just stated, however, Savage has fundamentally misconstrued the Gainsco
holding. There is no basis to argue it held proof of insurance was required in all
motor vehicle transactions whatsoever, and KRS 186A.220(5)(d), as it currently
stands, is not a codification of its holding.7 Gainsco instead dealt with the
statutory exception when certificates of title were not simultaneously
transferred along with possession of the vehicle; that exception now codified as
KRS 186A.220(5)(b). 191 S.W.3d at 636.
B. Co-part’s Duties under KRS 186A.100 and KRS 189.224
It is clear that Co-part was never an owner of the Jeep. Although
Hartford made that argument, the Court of Appeals correctly noted the fallacy
of Hartford’s reasoning:
the record reflects only that Co-part executed the dealer
assignment on the certificate of title. Co-part was authorized to
execute the title based on the limited power of attorney which
Hartford had granted it. The power of attorney would not have
been necessary if Hartford had transferred to [sic] title to Co-part.
7 To the contrary, because of the 2016 amendment, KRS 186A.220(5) with all
its subparts now does require proof of insurance to be shown in all transactions
whatsoever. Thus, KRS 186A.200(5)(d) is actually the legislature statutorily overruling
Gainsco. Because we are dealing with a case that occurred in 2012, the case remains
applicable here. But bench and bar should mark this issue prospectively.
15
Nevertheless, the Court of Appeals did conclude the trial court erroneously
granted summary judgment to Co-part as to KRS 186A.100 and improperly
failed to instruct the jury as to statutory duties Co-part had as a dealer under
KRS 189.224.8 We review the former under the summary judgment de novo
standard. Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 480 (Ky.
1991). An alleged error in failing to give a warranted jury instruction is
reviewed for an abuse of discretion. Kentucky Guardianship Administrators, LLC
v. Baptist Healthcare Sys., Inc., 635 S.W.3d 14, 35 (Ky. 2021). As to reversing
the summary judgment under KRS 186A.100, the Court of Appeals held,
Co-part is liable for violation of this section only to the extent that
the Jeep was required to display a license plate. The trial court
took the position that, since a license plate is not issued for a
vehicle with a salvage title, such a vehicle need not display a plate
as long as it is in tow. Furthermore, Co-part required purchasers
to obtain license plates for any vehicles which were intended to be
operated on the highways. Although the three-day permits
obtained by Ramos did not authorize him to operate the vehicles
on the highway outside of Arizona, there is at least a factual
question whether Co-part reasonably believed the permits were
sufficient. Likewise, there is a factual issue whether Co-part was
aware or should have been aware that Ramos intended to use the
Jeep in a manner requiring the display of a valid license plate. For
these reasons, we conclude that the Estate was entitled to submit
this statutory claim to the jury.
KRS 186A.100(1) states,
A motor vehicle dealer licensed under KRS 186.070 who sells a
vehicle for use upon the highways of this state shall equip the
vehicle with a temporary tag executed in the manner prescribed
8 Co-part argues this ruling was a summary judgment. The Court of Appeals
noted, however, the trial court initially declined to grant summary judgment on this
issue and only at the conclusion of trial did it decline to give a jury instruction. Our
review will proceed under the abuse of discretion standard, but our substantive ruling
would also justify reversal de novo as well.
16
below, which shall be valid for sixty (60) days from the date the
vehicle is delivered to the purchaser.
The Court of Appeals was under the impression that because there is no
evidence AUF is an authorized motor vehicle dealer anywhere in the United
States, that its purchase of the Jeep was as a consumer, therefore “for use”
under our decision in Travelers Indemnity Co. v. Armstrong, 565 S.W.3d 550,
562-63 (Ky. 2018). Travelers, however, did not deal with a salvage titled
vehicle.9 The Court of Appeals’ reliance upon Travelers puts the cart before the
horse. As it correctly noted, Co-part could only be liable for a violation of KRS
186A.100 to the extent the jeep required a temporary tag under that statute.
Therefore, there is a necessary precondition to be satisfied before the question
of whether the Jeep was sold to a purchaser for use. The trial court correctly
understood this and determined that because a salvage titled vehicle cannot be
issued a license plate (a tag), KRS 186A.100 simply cannot apply. We agree
with the trial court’s conclusion.
“Salvage titles shall be construed as proof of ownership of a vehicle in a
state as to be unusable upon the highways of the Commonwealth. A vehicle
shall not be issued a registration for highway use as long as a salvage title is in
force.” KRS 186A.520(5). If KRS 186A.520(5) prohibits the issuance of a
registration for highway use, then KRS 186A.100 cannot apply since it only
9 Travelers is applicable here only to the extent that this Court rejected the
broad and expansive definition offered by the Appellee in that case, that “purchaser for
use” could mean “for inventory, floor model, demo driver, for parts, or use in multiple
ways to make a profit.” Id. at 563. We stated such an interpretation renders the
purchaser for use language superfluous. Id.
17
applies when “A motor vehicle dealer licensed under KRS 186.070 . . . sells a
vehicle for use upon the highways . . . .” And a motor vehicle dealer cannot sell
a salvage titled vehicle for use upon the highways since the General Assembly
has declared all such vehicles are “unusable upon the highways of the
Commonwealth.” Therefore, we conclude the Court of Appeals erred in
reversing the trial court and we reinstate the trial court’s summary judgment.
As to the refusal to give a jury instruction under KRS 189.224, the Court
of Appeals concluded,
Co-part's liability is founded upon whether it knowingly permitted
Ramos to operate the Jeep on the highways of the Commonwealth.
The trial court concluded that the plain meaning of the term
“operated” requires “more affirmative action than just connecting it
by means of a tow bar to another vehicle.”
We disagree with the trial court's reasoning. The Toyota and the
towed Jeep constituted a single unit, and both were being
“operated” for purposes of KRS 189.224 and 186A.520(6).
“It is unlawful for the owner, or any other person, employing or otherwise
directing the operator of any vehicle, to require or knowingly to permit the
operation of such vehicle upon a highway in any manner contrary to law.” KRS
189.224. As before, the Court of Appeals has overlooked a necessary
precondition to the application of this statute to Co-part—that is whether Co-
part was “any other person, employing or otherwise directing” Ramos when he
operated the Jeep. It is obvious that Co-part was not Ramos’ employer. But
was it “otherwise directing” Ramos? That phrase comes after the word
“employing” and clues us to what the General Assembly meant by the word
directing. Its root is direct, “to regulate the activities or course of” or “to request
18
or instruct with authority.” Direct, Webster’s New Dictionary of the English
Language 147 (2001). Thus, we conclude “any other person. . . otherwise
directing. . . .” means a person in a position of authority over the operator of
the vehicle in a such a manner that the operator is under the coercive power of
the person otherwise directing him. If the operator of the vehicle is not subject
to the coercive power of the person otherwise directing, then how could one
reasonably expect the latter to be able to prevent the former from operating the
vehicle in a manner contrary to law?
In this case, Co-part was not a person otherwise directing Ramos
because it was not in a position of authority over him nor was Ramos subject
to Co-part’s coercive power. Ramos was an agent for a purchaser who already
possessed the certificate of title. He presented the two transaction numbers
demonstrating his agency for AUF, and Co-part was not in a position to
challenge it. Once Co-part delivered possession of the vehicle to Ramos, it was
his vehicle to operate at his pleasure subject to the normal laws applicable to
everyone. Therefore, we conclude the trial court properly declined to give an
instruction and reverse the Court of Appeals.
C. Improper Fact Finding by the Court of Appeals
Our conclusion regarding the statutory duties of Co-part as a matter of
statutory interpretation is not the end of the inquiry. Co-part, in its own
appeal, has alleged the Court of Appeals improperly engaged in fact finding
when it stated, substantively, that Ramos had affixed Arizona tags as well as
attached the towbar to the Toyota Tacoma and then attached the Jeep to the
19
towbar at the Co-part facility. We detailed this factual issue supra, pages 7-8. It
is obvious this fact pattern influenced the Court of Appeals in its rulings
regarding KRS 186A.100 and 189.224, as the court made specific references to
such facts, as quoted above in Section IV B, when reversing the trial court. If,
however, these “facts” are no facts at all, then the lower court has erred and
engaged in improper fact finding.
Co-part is correct that admissions of one co-defendant cannot be used
against another “unless they consent thereto, adopt the statements as their
own, or there is ‘privity’ between the party making the admission and the
coparties.” Newark Ins. Co. v. Bennett, 355 S.W.2d 303, 304 (Ky. 1962). The
trial court ruled there was no privity between Co-part and Chapa, thus Chapa’s
admissions could not be used as evidence against Co-part. The Court of
Appeals’ use of Chapa’s admissions to reverse the trial court below regarding
Co-part’s alleged statutory duties, without at all discussing the legal merits of
party admissions and privity, was error. If the Court of Appeals believed the
trial court had erred in disallowing the party admissions of Chapa to be used
against Co-part, then it was incumbent upon the appellate court to
demonstrate how that evidentiary ruling was an abuse of discretion. Kentucky
Guardianship, 635 S.W.3d at 21. Absent abuse, the evidentiary rulings of the
trial court are binding upon appellate courts. Because the Court of Appeals
failed to even attempt to demonstrate an abuse of discretion occurred, it was
the one that in fact acted arbitrarily. Thus, its rulings regarding KRS 186A.100
20
and 189.224 are reversible even if the Court of Appeals had correctly
interpreted their statutory language.
Apart from the Chapa admissions, only the hearsay testimony of
Savage’s investigator, that an employee of Co-part told him Ramos attached the
Jeep there, was offered against Co-part to prove Ramos had in fact attached
the Jeep to the Toyota while at the Co-part facility. We will not reverse the trial
court upon such a precarious evidentiary foundation, especially in light of the
absence of any physical evidence or eyewitness testimony that Ramos had
attached the Jeep at Co-part, which an expert testified would require 30-45
minutes and an acetylene torch to complete. There was no factual basis,
admissible against Co-part, to find a genuine issue of material fact existed and
reverse the summary judgment regarding KRS 186A.100. Even assuming
arguendo Co-part had a duty under KRS 189.224, there was no factual basis,
admissible against Co-part, that it may have violated that duty thereby
warranting a jury instruction.
D. Court of Appeals Erred in Reversing Trial Court on Withdrawal of
Admission
At some time during discovery Savage sent Co-part its request for
admissions, one of which read, “Please admit Co-part’s records show Oscar
Ramos drove the Toyota away from its Baltimore, Maryland facility.” Co-part
admitted the request due to a “drove out” notation existing on its records. But,
in April 2014, Aron Rosenfield, the Co-part corporate representative, testified at
deposition that “drove out” referred to the removal of the Toyota out of the
21
secure storage and into the bullpen for delivery to Ramos. Upon this basis, the
trial court allowed Co-part to withdraw the admission on December 1, 2015.
Before the Court of Appeals, Savage argued she “was prejudiced by the
untimely withdrawal of the admission because it was unable to conduct
additional discovery on the matter prior to trial.”
The Court of Appeals agreed with Savage. Because it had determined the
trial court should have allowed the jury to consider Savage’s statutory claim
under KRS 189.224, it considered Co-part’s conduct in Maryland relevant to its
knowledge of Ramos’ conduct in driving the vehicles in Kentucky. Nonetheless,
the appellate court noted its agreement “with the trial court that Co-part's
conduct in Maryland is not actionable in this case.” Moreover, the appellate
court ruled “[b]y waiting until the discovery deadline had passed to make this
motion, Co-part severely limited the Estate's options to conduct additional
discovery on the issue. At the very least, the trial court failed to address the
prejudice caused by Co-part's failure to seek an earlier withdrawal of the
admission.” Because we have already determined the Court of Appeals erred in
reversing regarding KRS 189.224, this issue is now largely moot. We briefly
address it to clarify the record and demonstrate that Savage was not prejudiced
by the withdrawal.
The withdrawal of an admission is an evidentiary ruling subject to review
under an abuse of discretion. Kentucky Guardianship, 635 S.W.3d at 21. “Any
matter admitted under Rule 36 is conclusively established unless the court on
motion permits withdrawal or amendment of the admission[,]” and “the court
22
may permit withdrawal or amendment when the presentation of the merits of
the action will be subserved thereby and the party who obtained the admission
fails to satisfy the court that withdrawal or amendment will prejudice him in
maintaining his action or defense on the merits.” CR 36.02. Requests for
admission are to be used to “seek the truth of vital controversial issues of fact .
. . .” McGiboney v. Brd. of Ed. Middlesboro, 387 S.W.2d 869, 872 (Ky. 1965).
“The intendment of that rule is that parties to litigation should not consume
time at trial, or be put to expense in making proof of evidentiary, or ultimate
facts appearing in a case that are not substantially contested.” Berrier v. Bizer,
57 S.W.3d 271, 279-80 (Ky. 2001) (quoting Jones v. Boyd Truck Line, 11 F.R.D.
67, 69 (W.D. Mo. 1951)).
The record demonstrates that Co-part did not move for withdrawal of the
admission, on November 16, 2015, until after Savage filed a motion in limine
on October 27, 2015, seeking to prohibit the deposition testimony of Rosenfield
contrary to the admission. Thus, we cannot agree with the Court of Appeals
that Co-part deliberately waited until after discovery deadlines to move for
withdrawal of the admission in an attempt to prejudice Savage. Savage’s
motion practice brought it about. Additionally, the Court of Appeals believed
that because Co-part’s motion came after the discovery deadlines had passed,
“Co-part severely limited the Estate's options to conduct additional discovery
on the issue.” Once again, the record does not support this conclusion. What
the record does show is that on December 21, 2015, the trial court, because a
new judge had been appointed, issued a new scheduling order and re-opened
23
discovery. The December 21st order set trial for May 24, 2016, and set new
deadlines for the identification of expert witnesses and lay witnesses, the
identification of exhibits, and the time for taking depositions. Savage’s own
conduct after that order was issued confirms this understanding. She filed a
motion to amend her complaint, supplemented her interrogatory answers and
responses to requests for production of documents, proposed a new expert
witness, sent subpoena duces tecum to several persons requesting documents,
as well as filing motions asking the trial court to revisit rulings, such as
Daubert determinations regarding several experts. Savage has correctly noted
that Co-part argued for the trial court to dispense with the new trial deadlines
and effectively cut off any new discovery. But that only demonstrates that Co-
part in fact believed discovery had been reopened.
Finally, and dispositively, the trial court ruled on February 25, 2016, to
dispense with the new deadlines. In so doing, the trial court also ruled the
expert named and the subpoenas issued prior to that ruling would be allowed
because Savage had relied in good faith on the deadlines issued by the trial
court. Moreover, the trial court ruled it would entertain a motion to exclude
Savage’s new expert but not on grounds of timeliness. Thus, the trial court
treated the case as if discovery had been effectively open for at least two
months. In that time, Savage had sought to take advantage of the new window
of discovery on numerous other issues and witnesses, demonstrating she was
well aware she could have issued subpoenas to Co-part’s Maryland facility
employees. Accordingly, there was no prejudice suffered by Savage due to the
24
withdrawal of the admission, and the deposition testimony of Co-part’s
representative demonstrated that, if Maryland conduct would be considered at
trial, then Co-part would be disputing whether Ramos drove out of the
Maryland facility.
E. Strict Liability for Co-part under KRS Chapter 186A.500
This next issue comes as a denial of a motion for directed verdict by
Savage.
The standard of review of a trial court's denial of
a motion for directed verdict is explained in detail in Lewis v.
Bledsoe Surface Mining Co., 798 S.W.2d 459 (Ky. 1990):
Upon review of the evidence supporting a judgment
entered upon a jury verdict, the role of
an appellate court is limited to determining whether
the trial court erred in failing to grant
the motion for directed verdict. All evidence which
favors the prevailing party must be taken as true and
the reviewing court is not at liberty to determine
credibility or the weight which should be given to the
evidence, these being functions reserved to the trier of
fact.
Id. at 461 (citing Kentucky & Indiana Terminal R. Co. v.
Cantrell, 298 Ky. 743, 184 S.W.2d 111 (1944); Cochran v.
Downing, 247 S.W.2d 228 (Ky. 1952)).
Demetre, 527 S.W.3d at 25. Unless the verdict rendered by the jury was
“palpably and flagrantly” against the evidence, the denial of a motion for
directed verdict will stand. Id. Savage’s argument, however, does not even
attempt to argue the jury’s verdict was palpably or flagrantly against the
evidence. Instead, in just under two pages of argument and citing only one
legal source, Prof. Prosser’s Handbook of the Law of Torts, she asks this Court
25
to impose strict liability for violations of all provisions of KRS Chapter
186A.500 as a matter of law.
We decline to hold strict liability applies as a matter of law for violations
of KRS Chapter 186A.500. Salvage titled vehicles are declared unusable upon
the highways of the Commonwealth and are considered so for the reason that
they have been damaged to such an extent that the cost of repair “exceeds
seventy-five percent (75%) of the retail value of the vehicle. . . .” KRS
186A.520(1)(a). This condition makes them an unavoidably unsafe product.
The General Assembly’s legislation regarding salvage titled vehicles is an effort
to regulate that market, not snuff it out existence. As such, in line with our
adoption of Restatement (Second) of Torts § 402A, Worldwide Equipment, Inc. v.
Mullins, 11 S.W.3d 50, 55 (Ky. 1999), the comments to the Restatement are
illustrative. In Comment K, the commentary explains that unavoidably unsafe
products are those that “in the present state of human knowledge, are quite
incapable of being made safe for their intended and ordinary use.”10 Because of
this,
The seller of such products, again with the qualification that they
are properly prepared and marketed, and proper warning is given,
where the situation calls for it, is not to be held to strict liability for
unfortunate consequences attending their use, merely because he
has undertaken to supply the public with an apparently useful and
desirable product, attended with a known but apparently
reasonable risk.
10 Obviously, as a general matter, salvage vehicles are capable of being repaired.
But if the General Assembly desired that only repaired salvage vehicles be marketed in
Kentucky it could have used the language necessary to regulate the market
accordingly.
26
We have applied this reasoning before in the case of dynamite, arguably a more
dangerous product than a salvage titled vehicle. Hercules Powder Co. v. Hicks,
453 S.W.2d 583 (Ky. 1970). Moreover, the difference between negligence and
strict liability is the shift “from the conduct of the actor, which is the problem
in negligence cases, to the condition of the product.” Montgomery Elevator Co.
v. McCullough by McCullough, 676 S.W.2d 776, 780 (Ky. 1984). But Savage’s
claim for strict liability against Co-part necessarily focuses on its conduct in
allegedly failing to comply with statutes, not with the condition of the Jeep.
Therefore, Savage has not in fact brought a strict liability claim at all. And
given her failure to offer any argument as to the jury’s verdict on this issue
being palpably and flagrantly against the evidence, we conclude it was not.
Thus, the motion to deny the directed verdict stands.
F. Aull v. Houston is Abrogated
Finally, the question of Aull v. Houston, 345 S.W.3d 232 (Ky. App. 2010)
troubled the Court of Appeals greatly. It explained,
We question whether Aull should be broadly read to exclude receipt
of SSD benefits from economic losses in all wrongful death
actions. Aull involved the alleged wrongful death of a child who
received immunizations at the age of five which purportedly caused
his death. Notably, the child had earlier been diagnosed with a
profoundly disabling condition with a poor prognosis. The trial
court granted a partial summary judgment ruling that damages
could not be recovered for the destruction of power to earn money
because the evidence was undisputed that the child was incapable
of ever earning money from his own labor. Id. at 234. This Court
affirmed, holding, “the inference that the child, someday, would
have the ability to ‘earn’ money is simply, and sadly, unreasonable.
It was not error for the trial court to conclude that the child was
unable to earn money” by his own labor. Id.
27
Unlike in Aull, Savage's receipt of SSD benefits was not merely
speculative. His benefits were based upon his actual work history
and loss of earning capacity. Furthermore, while Savage was totally
disabled from his prior employment, he was not entirely disabled
as was the child in Aull. Indeed, the Estate points to evidence that
Savage was able to do extensive work around the house, which
would be indicative of at least some earning capacity. Finally, in
other contexts, SSD benefits replace income which is lost before
retirement and are treated in the same manner as
income. See Holman v. Holman, 84 S.W.3d 903, 910 (Ky. 2002)
(treating disability benefits as a replacement for lost future income
and thus not divisible as marital property). For these reasons, we
believe that the holding of Aull should be limited to the factual
circumstances presented in that case.
Aull held “the measure of damages in a wrongful death action in this state is
the damage to the estate by the destruction of the decedent's power to labor
and earn money.” Id. at 235 (quoting W.L. Harper Co. v. Slusher, 469 S.W.2d
955, 959 (Ky.1971)). We consider de novo whether the Court of Appeals,
through Aull, has faithfully applied the wrongful death statute.
In Kentucky, “Whenever the death of a person results from an injury
inflicted by the negligence or wrongful act of another, damages may be
recovered for the death from the person who caused it, or whose agent or
servant caused it.” KRS 411.130(1). “Ours is one of the so-called ‘true’ wrongful
death statutes which have been construed to measure damages by loss to the
decedent's estate . . . .” Empire Metal Corp. v. Wohlwender, 445 S.W.2d 685,
687 (Ky. 1969). Whilst we continue to adhere to the rule expressed in Slusher,
that the measure of damages to an estate is calculated according to the
“destruction of the decedent’s power to labor and earn money,” we have
recognized that substitutes for the laboring and earning of money may be
considered in damages calculations. Heskamp v. Bradshaw’s Adm’r, 172
28
S.W.2d 447, 451 (Ky. 1943) (holding decedent’s employee pension was a
substitute for earning power). Thus, the question is do social security disability
benefits operate as a substitute for earned income? We hold they do and may
be presented to the jury as evidence for calculating damages.
In Aull, the decedent was a five-year-old child, who shortly after birth
had been diagnosed with Leigh’s Disease, a disease that presents with “a
seizure disorder, significant muscular hypotonia, regression of his development
status and decreased visual responsiveness.” Aull, 345 S.W.3d at 233. Leigh’s
Disease in infants typically results in an early death, as occurred in Aull. The
parents brought a wrongful death action, and on appeal challenged the trial
court’s summary judgment eliminating their claim for the destruction of their
child’s future earning capacity. Id. at 234. The parents admitted their child’s
“disability was so profound as to render him incapable of ever earning money
by his labor.” Id. The only contention was whether “an entitlement received
because of one's disability is the equivalent of income earned as a result of
one's labor.” Id. at 235. The Court of Appeals concluded since the child
“experienced no destruction of his power to labor at the hands of the Appellees,
Appellants cannot recover damages for the destruction of his power to labor
and earn money under KRS 411.130.” Id. at 237. That conclusion, however,
was supported by only two cases which we find readily distinguishable from
the social security disability benefits earned by the decedent in this case.
To answer the question whether governmental benefits are equivalent to
earned income, the Aull court relied principally upon Birkenshaw v. Union
29
Light, Heat and Power Co., 889 S.W.2d 804 (Ky. 1994) and Green River Elec.
Corp. v. Nantz, 894 S.W.2d 643, 646 (Ky. App. 1995), to hold receipt of
government benefits were not akin to earning income. Both cases dealt with
worker’s compensation benefits received exclusively by the decedent’s widow.
Birkenshaw held a widow’s receipt of her husband’s worker’s compensation
benefits as a result of his death while engaged in employment, “are not payable
in any event to the estate of the decedent [thus], they cannot be considered an
element of damages payable to the estate . . . .” 889 S.W.2d at 806. In Nantz,
the decedent died while a worker’s compensation claim was pending. His widow
settled that claim barely two months after filing the wrongful death action. 894
S.W.2d at 643. The widow successfully prevented evidence of the settlement
from being presented to the jury over Green River’s objection. The Court of
Appeals first noted that evidence of settlements is generally inadmissible. Id. at
645. Then, considering whether the settlement was even relevant to wrongful
death damages, the court answered negatively. Id. at 646. It explained,
“The disability figure contained in a settlement agreement is a
negotiated figure and may or may not equal the claimant's actual
occupational disability.” Newberg v. Davis, Ky., 841 S.W. 2d 164,
166 (1992). We agree with the trial court that the effects of the
decedent's injury, not the percentage of occupational disability
agreed to for settlement purposes, is relevant to the decedent's
power to earn money. See Davis, supra; Faultless Hardware, [837
S.W.2d 893, 896 (Ky. 1992)]. Therefore, in accordance with KRE
408, the permanent partial disability figure agreed to in the parties'
settlement agreement was not relevant evidence in the case at bar,
and consequently was inadmissible.
Id. In other words, the settlement was irrelevant to the damages calculation
because it might not be equal to the decedent-claimant’s actual measure of
30
occupational disability at the time of his death, therefore would not be a proper
reflection of his loss of earning power.
As the Court of Appeals noted in this case, “At the time of his death,
Savage was suffering from degenerative disk disease and osteoarthritis. He was
unable to work outside the home, and he had been receiving SSD benefits
since 2008.” That court also noted, “Savage's receipt of SSD benefits was not
merely speculative. His benefits were based upon his actual work history and
loss of earning capacity.” These benefits were not worker’s compensation
payments negotiated by the dependent widow, as in Nantz, nor were they
compensation payments to the widow as a result of a decedent-claimant’s
death, as in Birkenshaw. We therefore find those cases inapposite to the issue
here.
It is also necessary to explain the difference between Savage’s SSD
benefits and the benefits received by the decedent in Aull. As a child with a
profound disability, the decedent in Aull obviously never paid into the social
security system. Thus, he could not have been receiving the same social
security benefits that Savage was receiving. He must have been receiving Social
Security Insurance benefits. As a federal circuit court has explained,
The most familiar social security program is federal old age,
survivors and disability insurance, the core provisions of which
were adopted as part of the New Deal in 1935. 42 U.S.C. §§ 401–
433. It is based on contributions made by employees and their
employers to the social security trust fund, and it primarily
provides retirement income. But if an insured worker becomes
disabled before retirement, scheduled benefits are payable to the
employee during disability. Id. §§ 401(b), 423. The latter payments
are called “social security disability” or “SSD.”
31
In 1972, Congress added a new social security program to provide
“supplemental security income” (called “SSI”) for “aged, blind and
disabled” persons of limited means regardless of their insured
status. 42 U.S.C. §§ 1381a, 1382. This is a social welfare program
funded out of general taxpayer revenues.
Splude v. Apfel, 165 F.3d 85, 87 (1st Cir. 1999). A California appellate court is
also helpful in understanding the difference.
1. SSDI—The Social Security Administration pays these benefits to
workers who have earned enough credits but can no longer work
due to a disability. (42 U.S.C. § 423, subd. (a); 2 Soc. Sec. Law &
Prac. (Feb. 2020) § 14:22.) Because it is an earned benefit based on
the disabled person's contributions to Social Security, the monthly
payment can be substantial if the disabled person was previously a
high wage earner.
…
2. Supplemental Security Income (SSI) – “The basic purpose
underlying the SSI program is to assure a minimum level of
income for people who are age 65 or over, or who are blind or
disabled and who do not have sufficient income and resources to
maintain a standard of living at the established federal minimum
income level.” (20 C.F.R. § 416.110.) In addition to age, blindness,
or having a disability, SSI eligibility requires (1) a certain residency
or United States citizenship status, (2) evidence the person is not a
“fugitive fleeing” or in violation of a probation condition or parole,
(3) “income within specified limits,” and (4) “resources within
specified limits.” (2 Soc. Sec. Law & Prac. (Feb. 2020) § 18:2.)
Lak v. Lak, 50 Cal. App. 5th 581, 594-95 (Cal. App. 2020). Finally, we would be
remiss in failing to note that even the Supreme Court of the United States
recognizes “the interest of an individual in continued receipt of these [Social
Security disability] benefits . . . [are] a statutorily created ‘property’ interest
protected by the Fifth Amendment.” Matthew v. Eldridge, 424 U.S. 319, 332
(1976). This is because “[t]he ‘right’ to Social Security benefits is in one sense
‘earned,’ for the entire scheme rests on the legislative judgment that those who
32
in their productive years were functioning members of the economy may justly
call upon that economy, in their later years, for protection . . . .” Flemming v.
Nestor, 363 U.S. 603, 610 (1960). Thus, there is an interest “of sufficient
substance to fall within the protection from arbitrary governmental action
afforded by the Due Process Clause.” Id. at 611.
Therefore, we abrogate Aull to the extent it can be read to hold that SSD
benefits, which are based on a decedent’s contribution into the social security
system during his productive years, are not a substitute for earned income and
thereby inadmissible in a damages calculation in a wrongful death suit. We
hold SSD benefits do in fact operate as a substitute for earned income either in
the case of retirement or in disability and therefore are properly admissible in a
wrongful death action. To the extent Aull stands for the proposition that SSI
benefits received by a decedent-child, who from infancy was plagued with a
profound disability or disease and never had the capacity to labor or earn
income, may not be considered in damages calculations in a wrongful death
suit, it remains good law. Consequently, we remand back to the trial court for a
partial retrial on damages pursuant to Nolan v. Spears, 432 S.W.2d 425, 428
(Ky. 1968).
V. Conclusion
For the aforementioned reasons, we affirm in part and reverse in part the
Court of Appeals. We remand back to the trial court for a new, partial retrial on
damages so that the SSD benefits of Savage may be considered.
33
All sitting. VanMeter, C.J.; Bisig, Keller, Lambert, Nickell, JJ., concur.
Thompson, J., concurs in result only.
COUNSEL FOR APPELLANT:
Richard M. Breen
G. Adam Redden
Connor M. Breen
Richard Breen Law Offices, P.S.C.
COUNSEL FOR APPELLEES, COPART OF CONNECTICUT, INC., TOM TAYLOR,
DANNY BOND, WILLIS JOHNSON, WILLIAM FRANKLIN, and PAUL STYLER:
Michael E. Hammond
J. Lacey Fiorella
Landrum & Shouse, LLP
COUNSEL FOR APPELLEE, PROPERTY & CASUALTY INSURANCE COMPANY
OF HARTFORD:
R. Craig Reinhardt
Neal J. Manor
Reinhardt & Associates, PLC
COUNSEL FOR APPELLEE, ALLSTATE INSURANCE COMPANY:
Robert E. Stopher
Robert D. Bobrow
Boehl Stopher & Graves, LLP
COUNSEL FOR APPELLEE, OSCAR RAMOS:
Edward H. Benjamin
Parrent & Oyler
COUNSEL FOR APPELLEE, LIBERTY MUTUAL FIRE INSURANCE COMPANY:
Charles H. Cassis
Anthony R. Johnson
Goldberg Simpson, LLC
34
APPELLEES: Margarita Chapa; Chapa, Inc.; Felix Ventura Barraza; and Autos
Usados Felix
Pro Se
COUNSEL FOR AMICI, KENTUCKY DEFENSE COUNSEL:
Valerie W. Herbert
Travis Herbert & Stempien
COUNSEL FOR AMICI, KENTUCKY JUSTICE ASSOCIATION:
Jeffrey A. Roberts
Jeffrey Roberts Law
35