Opinion
NO. 2011-CA-000919-MR
10-12-2012
BRIDGE THE GAP, INC. APPELLAN v. CITY OF LOUISVILLE and MARTINGALE, LLC APPELLEES
BRIEF FOR APPELLANT: Theodore L. Mussler, Jr. Louisville, Kentucky BRIEF FOR APPELLEE, CITY OF LOUISVILLE: John L. Tate Bethany A. Breetz Louisville, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE OLU A. STEVENS, JUDGE
ACTION NO. 01-CI-005158
OPINION
REVERSING
BEFORE: CAPERTON, LAMBERT, AND MOORE, JUDGES. MOORE, JUDGE: Bridge the Gap, Inc. (BTG), appeals from a final judgment of the Jefferson Circuit Court denying it an additional $50,000, plus interest, relating to its share of a prior $350,000 condemnation award it obtained from the City of Louisville. Having reviewed the issues and the applicable law, we reverse.
This matter has come before our Court on two prior occasions, as described in Martingale, LLC v. City of Louisville, 151 S.W.3d 829 (Ky. App. 2004), and Martingale, LLC v. City of Louisville, Nos. 2008-CA-000524-MR, 2008-CA-000585-MR, 2010 WL 1132563 (Ky. App. March 26, 2010). And, the latter of our two opinions in this matter summarizes the relevant facts before us:
The Big Four Bridge spans the Ohio River between Louisville, Kentucky, and Jeffersonville, Indiana. A portion of the bridge lies in Indiana, but much of it is in Kentucky. In 1977, Bridge the Gap, Inc., a charitable organization, began using the bridge to advertise its activities. In 1982, Charles Hammond purchased the bridge, including the land on either side of it, and allowed Bridge the Gap to continue its use of the bridge. In 1987, Bridge the Gap purchased the Kentucky portion of the bridge, but not the underlying real estate. Bridge the Gap entered into a purchase agreement in 2000, intending to sell the bridge to Martingale. The purchase agreement anticipated the possibility of condemnation but, ultimately, the conveyance of the property never occurred because not all of the conditions precedent to such conveyance were met. In the meantime, the City's Waterfront Development Commission acquired the land on the Kentucky side of the bridge, intending to utilize that land for a pedestrian walkway.Id. at *1-3 (internal footnotes omitted).
In 2001, the City initiated a condemnation action with regard to the bridge itself. Bridge the Gap and Martingale contested the condemnation, but were unsuccessful. Valuation proceedings began before a panel of Commissioners. The Commissioners valued the bridge at $80,000, which the City paid and Bridge the Gap collected. Bridge the Gap and Martingale filed exceptions to the Commissioners' award and appealed to the Jefferson Circuit Court.
Bridge the Gap, Martingale, and the City presented evidence at trial of the bridge's value. The City asserted the bridge had little or no value, while Bridge the Gap's
and Martingale's valuations were as high as $8,850,000.00. After hearing expert testimony and receiving ample other evidence, a jury valued the bridge at $350,000.00. Attempting to enforce the provisions of the purchase agreement regarding distribution of any condemnation award, the trial judge allocated $220,000 to Bridge the Gap, with $38,080.49 interest, and $50,000 to Martingale, with $8,655.51 interest.[]
The order described in Martingale, LLC, 2010 WL 1132563, was entered December 18, 2007. That opinion largely summarized the circuit court's December 18, 2007 order, but the following particulars of that order are relevant to this matter:
1. The Defendants [Martingale and Bridge the Gap] are awarded the amount of $350,000, plus statutory costs in a [sic] amount to be determined and interest as described below.
2. The Plaintiff [the City] is given credit on the judgment in the amount of $80,000, said amount having been previously paid into Court and withdrawn by Bridge the Gap, Inc.
3. The Plaintiff [the City] shall pay the remaining $270,000 due the Defendants [Martingale and Bridge the Gap] with interest at the rate of 6% per annum from January 24, 2005, the date of taking, at the daily rate of $44.38, with the total accrued interest as of December 13, 2007, being $46,736.00.
4. The said monies shall be paid to the Defendants [Martingale and Bridge the Gap] as follows:
To the Defendant, Bridge the Gap, Inc., the sum of $220,000.00 plus interest in the amount of $38,080.49;
To the Defendant, Martingale, LLC, in the sum of $50,000 plus interest in the amount of $8,655.51.
BTG and the City did not validly appeal or cross-appeal the circuit court's judgment. Therefore, neither contested Martingale's $50,000 allocation of the condemnation proceeds, the circuit court's $350,000 valuation of the bridge, or the City's obligation to pay $350,000 in exchange for the bridge. Indeed, the only party to appeal was Martingale, and Martingale's appeal sought only a higher valuation of the bridge and a larger allocation of the condemnation proceeds it was to share with BTG.
The City attempted to cross-appeal, raising the issue of Martingale's standing to sue. The City's cross-appeal was dismissed, however, for failure to join a necessary party. Id. at *4.
In its appeal, Martingale named both BTG and the City as appellees.
The conflict in the present matter arises solely due to the fact that in the prior appeal, Martingale, LLC, 2010 WL 1132563, this Court raised the issue of Martingale's standing to sue sua sponte. And, our prior review of that issue created a result that Martingale, BTG, and the City never effectively sought: the Court determined that "Martingale had no standing to claim an interest in the property and, therefore, also lacked standing to claim an interest in the condemnation proceeds." Id. at *3. Consequently, we "reverse[d] with respect to the award allocated to Martingale, and remand[ed] this case to the Jefferson Circuit Court for further proceedings consistent with [that] opinion." Id. at *4.
Thereafter, Martingale moved for discretionary review. The Supreme Court of Kentucky denied its motion, the opinion became final, and this case was remanded to the circuit court.
Shortly after remand, BTG filed a document styled "Motion to Enter Supplemental Judgment," in which it argued:
Presently, there is nothing for this Court to do but to allocate the remaining condemnation proceeds. There is but one remaining claimant, BTG. As the Court may be required to assess the correctness of its anticipated ruling, the scope of the issue before it should be defined. It is:
To who [sic] is owed the remaining unpaid interest and principle [sic] of the
$50,000.000, of the jury award set out in this Court's Judgment of December 18, 2007?In the condemnation proceeding, there were three parties. The City of Louisville, Martingale and BTG. The City of Louisville only has an interest in seeing that it pays the condemnation proceeds to the correct party. It has no legitimate claim against the money itself. Prior to the taking, the City had no ownership interest in the Bridge. Now it owns the Bridge, and the proceeds replace the title to the Bridge. The Appeal of this case decided that Martingale had no standing to claim any of the condemnation proceeds, as its contract with BTG was champertous and unenforceable. Had the original trial court correctly ruled that way, Martingale would have been dismissed, and all the proceeds paid to BTG years ago. As it was, the issue was not decided until the Appeal was completed.
There really is little left to decide. There were two claimants to the condemnation proceeds, and one of those claimants has been determined to be illegitimate. All the remaining proceeds, plus interest, must be paid over to BTG, the only remaining claimant.
The City responded to BTG's motion by arguing that BTG's failure to appeal or cross-appeal the circuit court's December 18, 2007 judgment precluded BTG from contesting the adequacy of the award that BTG had already received from the prior condemnation proceedings. The City then concluded its response by asserting that Martingale, LLC, 2010 WL 1132563, stood for the proposition that, because Martingale was no longer entitled to a $50,000 share in the condemnation proceeds, the City was now entitled to keep the bridge for the price of only $300,000, rather than the previously adjudicated price of $350,000.
In its reply to the City's response, BTG essentially argued that the City's contentions were hypocritical. BTG pointed out that when the City's cross-appeal was dismissed, the City was placed in the same position as BTG (i.e., the position of not having filed any kind of effective appeal or cross-appeal either). And, in asking to keep the bridge at the price of only $300,000, the City was also seeking to enlarge its rights under the circuit court's judgment without having appealed or cross-appealed the judgment.
After considering these arguments, the circuit court apparently found that BTG's motion represented an unauthorized collateral attack upon the December 18, 2007 judgment. In a May 6, 2011 order, the circuit court "vacated and held for naught" the amount of Martingale's previous award, which at the time totaled $50,000 plus $8,655.51 in interest, after holding in relevant part:
Bridge the Gap did not appeal the [December 18, 2007] judgment. If Bridge the Gap felt it was entitled to additional funds, it should have asserted its entitlement by prosecuting a timely appeal. It failed to do so. Accordingly, it is limited to the terms of the Court's final judgment, $220,000.00 plus $38,080.49 in interest.
The circuit court's May 6, 2011 order made no direct mention of the City's rights in this matter. In denying BTG's motion, however, the circuit court effectively allowed the City to keep the bridge at the price of $300,000, rather than $350,000.
BTG now appeals. It argues that the circuit court erred in simultaneously denying it Martingale's share of the condemnation proceeds and deducting that amount from the price the City was otherwise required to pay for the bridge. We agree, but a measure of explanation is warranted.
We begin with a general principle of law regarding appeals and cross-appeals, which both BTG and the City agree upon in their respective briefs: An appellee cannot contest a judgment, modify a judgment, or otherwise enlarge his rights under a judgment without first filing a valid cross-appeal. See, e.g., Farmers Nat. Bank of Danville v. Moore, 282 Ky. 502, 139 S.W.2d 420, 422 (1940); Lainhart v. Rural Doxol Gas Co., 376 S.W.2d 681, 682 (Ky. 1964). In the absence of a cross-appeal, an appellee is only entitled to argue that the trial court reached the correct result for the reasons expressed in its judgment, or for any other reasons that were appropriately brought to the trial court's attention. Carrico v. City of Owensboro, 511 S.W.2d 677, 679 (Ky. 1974).
In limiting themselves to the roles of appellees in Martingale, 2010 WL 1132563, BTG and the City were only entitled to defend the circuit court's December 18, 2007 judgment—a judgment that provided, among other things, that Martingale's recovery was properly limited to $50,000 plus interest, and that the value of the bridge and the amount due from the City in exchange for that bridge was $350,000. Because an attack upon Martingale's standing to sue would undermine the validity of the December 18, 2007 judgment, BTG and the City—as appellees—were thus prohibited from asserting the issue of Martingale's standing. Carrico, 511 S.W.2d at 679. And, as mentioned above, BTG and the City did not assert the issue of Martingale's standing in that appeal or overstep their roles as appellees.
Rather, this Court raised and resolved the issue of Martingale's standing sua sponte; this Court remanded the matter back to the circuit court for proceedings consistent with our opinion; in doing so, this Court created a result that BTG and the City could not have achieved themselves; and, because our prior opinion is now final and unappealable, our resolution of Martingale's standing— erroneous or not—is the law of the case. See, e.g., Brooks v. Lexington-Fayette Urban County Housing Authority, 244 S.W.3d 747 (Ky. App. 2007) (citing Union Light, Heat & Power Co. v. Blackwell's Adm'r, 291 S.W.2d 539, 542 (Ky. 1956)) ("The law of the case doctrine is 'an iron rule, universally recognized, that an opinion or decision of an appellate court in the same cause is the law of the case for a subsequent trial or appeal however erroneous the opinion or decision may have been.'").
In Harrison v. Leach, 323 S.W.3d 702, 706 (Ky. 2010), the Kentucky Supreme Court held that this Court of Appeals errs if it raises the issue of a litigant's standing sua sponte.
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The law of the case required the circuit court to modify its December 18, 2007 judgment consistently with Martingale, 2010 WL 1132563. BTG was simply asking the circuit court to explain the parties' rights under the December 18, 2007 judgment in light of Martingale, 2010 WL 1132563, and to enforce it accordingly. Therefore, when BTG requested Martingale's share of the condemnation award, it was not attempting a collateral attack because "[t]he mere interpretation of a judgment involves no challenge of its validity." Ballew v. Denny, 296 Ky. 368, 177 S.W.2d 152, 154 (1944) (internal citation omitted).
As further explained in Board of Ed. of Campbellsville Independent School Dist. v. Faulkner, 433 S.W.2d 853, 855 (Ky. 1968),
[A] judgment always is open to construction by any court that is asked to give effect to it. And if the judgment is ambiguous by reason of circumstances not apparent on the face of the record supporting it, we perceive no sound reason why it may not be shown by extraneous evidence . . . If that is good law for deeds, contracts, wills and other writings, and it has always been so recognized, it is no less good law in the case of an anomalous judgment. It is always proper to consider what the judgment should have been, since it will be 'presumed that the court intended to adjudge correctly in law upon the facts of the case, and of two possible interpretations of the language of the judgment, that one will be adopted which makes it valid, in preference to one which would make it erroneous.(internal citations omitted.)
Moreover, when interpreting a judgment, "effect must be given to that which is unavoidably and necessarily implied in a judgment, as well as that which is expressed in the most appropriate language." Furlow v. Sturgeon, 436 S.W.2d 485, 486 (Ky. 1969) (citation omitted). Furlow also provides that where claims in an action are mutually exclusive, "adjudicating in favor of one is negativing the other." Id.
In light of the foregoing, the circuit court's December 18, 2007 judgment, taken in conjunction with the holding in Martingale, 2010 WL 1132563, stands for the proposition that BTG is entitled to an additional $50,000, plus interest. The December 18, 2007 judgment provided that Martingale and BTG, as joint owners of the bridge, were each entitled to respective shares in the $350,000 in condemnation proceeds. In Martingale, 2010 WL 1132563, this Court simply held that the circuit court had no authority to allocate any portion of the $350,000 in condemnation proceeds to Martingale because Martingale had no ownership interest in the bridge. Id. at *4. Nothing in our prior opinion reduced the City's liability for paying $350,000 in exchange for ownership of that bridge. And, in "negativing" Martingale's ownership interest in the bridge, the unavoidable and necessary implication of Martingale, 2010 WL 1132563, is that the bridge's complete ownership rested with BTG. Thus, an interpretation of the circuit court's December 18, 2007 judgment within the context of our determination of Martingale's standing—and the law of the case—leads only to one conclusion: complete entitlement to the $350,000 in condemnation proceeds, and any related interest, now rests with BTG.
For these reasons, the May 6, 2011 order and judgment of the Jefferson Circuit Court is REVERSED, with directions to enter a new judgment providing that the City shall pay Bridge the Gap $50,000 (which represents the outstanding balance of the condemnation award in this matter) along with any related amount of interest that has accrued thereon.
ALL CONCUR. BRIEF FOR APPELLANT: Theodore L. Mussler, Jr.
Louisville, Kentucky
BRIEF FOR APPELLEE, CITY OF
LOUISVILLE:
John L. Tate
Bethany A. Breetz
Louisville, Kentucky