- Gary Bryant and Erica Brown were denied the right to due process.
Due process is one of the most fundamental rights in our legal system. Erica Brown and Gary Bryant were denied due process when the circuit court entered an order compelling them to appear for a pre-litigation deposition. The circuit court’s order was entered prior to the opportunity for Appellants to respond.
Appellants’ use of Jefferson Circuit Local Rule 401 is correct in this matter. JRP 401 deals with dispositive motions. The motion filed by Allstate in this case was a dispositive motion, which is why this appeal followed. Gary Bryant and Erica Brown were not given twenty (20) days to respond; in fact, they were not given any time to respond at all. “The fundamental requirement of due process is the opportunity to be heard at a meaningful time and in a meaningful manner.” Cabinet for Health & Family Servs. v. A.G.G., 190 S.W.3d 338, 346 (Ky. 2006) citing, Mathews v. Eldridge, 424 U.S. 319, 333, (1976). In Mathews, the United States Supreme Court went on to say, “due process is flexible and calls for such procedural protections as the particular situation demands.” Mathews v. Eldridge, 424 U.S. 319, 334, (1976). However, the due process clause of the 14th Amendment of the United States Constitution confers a substantial right, which may not be violated.
The Kentucky Supreme Court has stated, “[p]rocedural due process is not a static concept, but calls for such procedural protections as the particular situation may demand.” Ky. Cent. Life Ins. Co. v. Stephens, 897 S.W.2d 583, 590 (Ky. 1995). In the case before the court there were no procedural protections for the Appellants. The words of Justice Cunningham are worth noting: “I am very appreciative of the hectic pace court scheduling can become and how due process violations can be inadvertently committed when they are sometimes hidden below the surface when managing a docket. However, it is what it is — a due process infraction.” Solinger v. Melanie Pearson & Norton Hosp., Inc., 2010 Ky. Unpub. LEXIS 18, at *28 (Mar. 18, 2010) attached hereto as Exhibit “A.”
- Review is appropriate of any error that affects a substantial right.
CR 61.02 states:
A palpable error which affects the substantial rights of a party may be considered by the court on motion for a new trial or by an appellate court on appeal, even though insufficiently raised or preserved for review, and appropriate relief may be granted upon a determination that manifest injustice has resulted from the error.
The Kentucky Court of Appeals has stated, “even if improperly preserved, this Court has authority to review alleged errors not preserved at trial under CR 61.02 ‘upon determination that manifest injustice has resulted from the error.’” Mo-Jack Distrib., LLC v. Tamarak Snacks, LLC, 476 S.W.3d 900, 907 (Ky. Ct. App. 2015). Appellants in this matter were not given the opportunity to preserve errors because they were denied due process. Therefore manifest injustice has occurred; a court should never deny a party due process.
The Court of Appeals stated the error must have resulted in prejudice to the Appellant so as to “affect [their] substantial rights.” Nichols v. Hazelip, 374 S.W.3d 333, 338 (Ky. Ct. App. 2012). The circuit court erred in granting Appellee’s petition and denied Appellants’ substantial rights; the right to due process.
III. Allstate cannot pursue an action against third party claimants with CR 27.01.
Allstate’s argument that it should be allowed to bring an action against Erica Brown and Gary Bryant in the name of its flawed. The Kentucky Supreme Court has stated. “Years ago, we determined that in tort cases an injured person could not sue the negligent party’s insurance company, except in cases of insolvency or bankruptcy.” Harris v. Jackson, 192 S.W.3d 297, 302 (Ky. 2006). Allstate’s sole means of satisfying the requirements of CR 27.01 is to show it expects to be a party to a lawsuit namely, “[a] person who resides in this state and expects to be a party to an action in a court hereof … and who desires to perpetuate the testimony of witnesses” CR 27.01. Not only is Allstate not a resident of the state, Allstate cannot expect to be a party to an action in this case since Kentucky law prohibits Allstate from being named a party.
- Allstate is still not a resident of this state.
Nothing in the Appellee’s brief changes the fact that Allstate is not a resident of this state as required by the language, “[a] person who resides in this state.” CR 27.01. A quick check of the Kentucky Department of Insurance website confirms that Allstate is domiciled in Illinois. This does not give Allstate standing to petition the court under CR 27.01.
- CR 27.01 Depositions are not for the purposes of discovery, only preservation of testimony.
Allstate’s petition to the court for a discovery deposition under rule 27.01 is flawed. “The scope of examination as well as the form of interrogation are substantially different as respects depositions for discovery and depositions for perpetuation of testimony. Meredith v. Wilson, 423 S.W.2d 519, 520 (Ky. 1968). See also Volvo Car Corp. v. Hopkins, 860 S.W.2d 777, 779 (Ky. 1993) (citing Meredith and anticipating the loss of evidence by death of a witness.) Allstate has not shown that it needs to perpetuate testimony of anyone expected to die, and there is no reason for Allstate’s request other than to attempt to go on the offensive against claimants.
- No verified petition was filed in the circuit court;
No evidence was presented.
Rule 27.01 requires a verified petition. Appellee did not present a verified petition and further did not present any evidence in its petition to the circuit court. Appellee’s counsel argued and made assertions which were at best double or triple hearsay. This is not actual evidence which can be considered by a court. Appellee has done the same in arguing that it needs to do discovery upon claimants to protect itself against fraud. No matter how many times Appellee uses the word “fraud” in its petition or brief it is not absolved of its duties to actually meet a standard of pleading under CR 27.01 and the evidentiary burden of proof. It has done neither.
The issues in this case are clear and require reversal. Allstate does not have standing to petition for CR 27.01 depositions for multiple reasons. The circuit court denied Appellants the right to due process, a significant and substantial right under the constitution. For the foregoing reasons the Appellants petition for the reversal of the order of the Jefferson County Circuit.
Aaron Michael Murphy
MURPHY & ASSOCIATES PLC
513 S. 2nd Street
Louisville, Kentucky 40202
Attorney for the Appellants
Gary Adams and Erica Bryant appeal from an order of the Jefferson Circuit Court compelling Gary Adams and Erica Bryant to give pre-litigation depositions and compel the production of documents to Appellee, Allstate Indemnity Company (“Allstate”). The Jefferson Circuit Court improperly granted Allstate’s motion for pre-litigation depositions pursuant to the language in CR 27.
STATEMENT CONCERNING ORAL ARGUMENT
Appellants request oral argument as it believes that oral argument would assist the Court in resolving the issues raised by this appeal.
STATEMENT OF POINTS AND AUTHORITIES
STATEMENT CONCERNING ORAL ARGUMENT i
STATEMENT OF POINTS AND AUTHORITIES ii
APPENDIX LIST iv
STATEMENT OF THE CASE 1
Ky. CR 27 ………………………… 1, 3, 4, 5, 7, 8, 9, 10
Ky. CR 27.01 ………………………. 1, 5, 7, 8, 10
STANDARD OF REVIEW 2
Peter Garret Gunsmith, Inc. v. City of Dayton,
98 S.W.3d 517 (Ky. App. 2002) …….. 2
Cumberland Valley Contractors, Inc. v. Bell County Coal Corp.,
238 S.W.3d 644 (Ky. 2007) …… 2
Ky. CR 5.01 ………………………………. 3
Jefferson Circuit Court Rule 401 ………….. 3, 5, 6
- The Circuit Court Denied the Appellants Due Process. 3
U.S. Const. amend. 14, § 1 …………………… 3
- The Circuit Court Erred in Ordering Pre-litigation
Depositions Prior to Notice to the Appellants……… 4
Ky. CR 27.01(2) …………………………………….. 3, 5
Milliken v. Meyer, 311 U.S. 457 (1940) ………………. 3
- The Circuit Court Erred in Not Allowing Appellants
To Answer Appellee’s Petition. 4
Mullane v. Cent. Hanover Bank & Trust Co.,
339 U.S. 306 (1950) ……………………… 4, 5
- The Circuit Court Erred in Not Holding A Hearing
Pursuant to CR 27. 6
Mathews v. Eldridge, 424 U.S. 319 (1976) ……… 6
Ky. CR 27.01(1)………………………. 5, 7, 8, 10
- Appellee Does Not Have Standing to Request A
Pre-Litigation Deposition. 7
- Appellee is A Non-Resident Company, Consequently,
The Circuit Court Lacks Subject Matter Jurisdiction. 8
Hisle v. Lexington-Fayette Urban Cty. Gov’t,
258 S.W.3d 422, 429 (Ky. Ct. App. 2008) …….. 8
Nordike v. Nordike, 231 S.W.3d 733, 739 (Ky. 2007) ….. 8
Ky. Const. § 112(5) ……………………………………… 9
- Appellee Is Not an Expected Adverse Party Under CR 27. 9
Ky. CR 27.01(1)(a) ………………………………… 10
KRS § 304. 12-230(12)……………………………… 10
- The Circuit Court Did Not Conduct an Analysis of Rule 27
Factors Prior to Granting a Pre-Litigation Deposition. 10
- The Circuit Court Erred in Ordering Pre-Litigation Depositions For Purposes Other Than Perpetuation of Testimony. 11
Ky. CR 27.01(1)(e) ………………………………… 11
- Perpetuation of Testimony Is Different Than
Discovery Deposition. 12
Meredith v. Wilson, 423 S.W.2d 519, 520 (Ky. 1968) …. 12
STATEMENT OF THE CASE
On June 17, 2015, Gary Bryant and Erica Brown were involved in a motor vehicle collision caused by Carey Lamb, who is insured by Allstate. Mr. Bryant was the driver and Mrs. Brown was the passenger. They were driving westbound on Berry Blvd in Louisville, KY. The driver of the other vehicle, Carey Lamb, was traveling eastbound on Berry Blvd. Carey Lamb failed to yield the right of way as she was turning into a gas station and struck Mr. Bryant’s vehicle. Mr. Bryant and Ms. Brown presented a third-party claim against Ms. Lamb.
On August 31, 2015, Allstate, Ms. Lamb’s insurer, filed an original action in circuit court styled as a Motion to Compel CR 27.01 Depositions. (R. at 1-20). Allstate is domiciled in Illinois and is licensed to offer its services in Kentucky. On September 2, 2015, the circuit court entered the order tendered with Appellee’s motion. (R. at 21-22). On that same day, Mr. Bryant and Mrs. Brown were served with the notice in this matter. (R. at 23-24). Before Mr. Bryant and Mrs. Brown were served and given an opportunity to respond, the circuit court granted the order for pre-litigation depositions.
The circuit court’s order is erroneous based on the law. The circuit court granted Appellee’s petition before service of notice to the Appellants. Pursuant to CR 27, in granting the order, the court erred in not giving Appellants a chance to respond or an opportunity for a hearing. Further, Allstate does not have standing to bring an action pursuant to CR 27. Therefore, reversal and remand are appropriate.
STANDARD OF REVIEW
The Court must review the Jefferson Circuit Court’s order for pre-litigation deposition to determine whether the law was correctly interpreted. The standard of review is de novo. Statutory interpretation and application are issues of law; issues of law are to be reviewed de novo. Peter Garret Gunsmith, Inc. v. City of Dayton, 98 S.W.3d 517, 520 (Ky. App. 2002) see also, Cumberland Valley Contractors, Inc. v. Bell County Coal Corp., 238 S.W.3d 644, 647 (Ky. 2007). Because this case does not involve an issue of equity or fact, but only the interpretation and application of the law and the Kentucky Rules of Civil Procedure, the only issue before the court is a matter of law to be reviewed de novo.
The Circuit Court granted Appellee’s petition for pre-litigation deposition. (See, Appendix B) On that same day the notice was served to Appellants, Gary Bryant and Erica Brown. (See, Appendix D) Thus, the issues on appeal were preserved as Appellants were denied their due process, because they did not have the opportunity to be heard in compliance to CR 27, CR 5.01 and Jefferson Circuit Court Rule 401.
- The Circuit Court Denied the Appellants Due Process.
Gary Bryant and Erica Brown were denied their due process when the Jefferson Circuit Court erred by granting an order for pre-litigation depositions to Allstate on the very same day Appellants received notice; not allowing Appellants to answer to the petition; and, by not holding a hearing pursuant to CR. 27. (See, Appendix B and D) According to the United States Constitution under the Due Process Clause of the 14th Amendment, it states that, “No State shall . . . deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.” U.S. Const. amend. 14, § 1.
- The Circuit Court Erred in Not Holding a Hearing Pursuant to CR 27.
Parties to an action must receive notice. CR 5.01 refers to when service is required, and states that “every order required by its terms to be served . . . every paper relating to discovery required to be served . . . every written motion . . . and every written notice, appearance, demand, offer of judgment, designation of record on appeal, and similar papers shall be served upon each party.” CR 27.01 (2) refers to the process of notice and service before action and states that in a motion, “the petitioner shall thereafter serve a notice upon each person named in the petition as an expected adverse party . . .” In Milliken v. Meyer, 311 U.S. 457, 463 (1940), the Court addressed the issue of actual notice of proceedings, and it was decided that if it was reasonable that notice was given, then “the traditional notions of fair play and substantial justice implicit in due process, are satisfied.” The petitioner should serve a notice to appellants from whom he expects to take depositions.
Here, the order compelling pre-litigation deposition was granted by the circuit court prior to Gary Bryant and Erica Brown receiving notice. (See, Appendix B and D) Serving a notice is the requirement under Kentucky Court Rules for a request in depositions. The circuit court signed the tendered order on the very same day the Appellants received notice of this action. Lack of adequate notice to Gary Bryant and Erica Brown is not fair play and substantial justice which denied them due process and does not comply with the language of CR 27.
- The Circuit Court Erred in Not Allowing Appellants to Answer Appellee’s Petition.
In Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306 (1950), the Court addressed the issue of due process by way of a New York statute that includes no requirement for adequate notice. This meant that opposing party would not have reasonable time to respond. The Court decided that “the fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Id. at 314. Jefferson Circuit Court Rule 401 also states that “an opposing party shall have twenty (20) days from the certification date on the motion to respond.”
There was no reasonable notice to Gary Bryant and Erica Brown. The fundamental requirement of due process was not met because the notice was received by Appellants on the same day, presumably after the circuit court had signed the order. (See, Appendix B and D) Appellants did not have an opportunity to be heard or file a response. The circuit court erred by not allowing Appellants adequate time to respond to the Appellee’s petition, as set forth in rule 401.
- The Circuit Court Erred in Not Holding a Hearing Pursuant to CR 27.
In Mullane, the Court said that notice must be of such nature as to reasonably convey certain information. Furthermore, it must also “afford a reasonable time for those interested to make their appearance.” Id at 314. If it is reasonable that the notice would reach the parties a different way, then it would be justifiable. In other words, the exception to satisfy an opportunity to be heard without an actual notice, is that if the expected party is indeed informed about the notice and would still allow them time to appear in court regarding such matter. “This right to be heard has little reality or worth unless one is informed that the matter is pending and can choose for himself whether to appear or default, acquiesce or contest.” Id. In Mathews v. Eldridge, 424 U.S. 319, 333 (1976), the Court said that “the fundamental requirement of due process is the opportunity to be heard “at a meaningful time and in a meaningful manner.” Gary Bryant and Erica Brown were informed of the proceeding after the circuit court had already signed the order. (See, Appendix B and D) Therefore, they had no time to make their appearance or objection regarding the petition for pre-litigation depositions.
Under these circumstances, the factors under CR 27.01 were not established. CR 27.01(1) contains the requirements for a petition for deposition before an action. This rule requires notice to discuss the contents of Allstate’s petition. Such factors to be viewed at hearing include: “(b) the subject matter of the expected action and his interest therein; (c) the facts which he desires to establish by the proposed testimony and his reasons for desiring to perpetuate it . . .” CR 27.01(2) states that “at least 20 days before the date of hearing the notice shall be served. . .” Such circumstances where the circuit court did not hold a hearing after the notice essentially denied them the opportunity to be heard and to appear in court.
- Appellee Does Not Have Standing to Request a Pre-Litigation Deposition.
CR 27.01 requires that only the following can request a pre-litigation deposition: “A person who resides in this state and expects to be a party to an action in a court hereof, or who, being a nonresident of this state, has an interest in real property herein.” The circuit court improperly granted Appellee’s petition requesting a pre-litigation deposition, because Appellee is a non-resident company and is not an expected adverse party.
- Appellee Is a Non-Resident Company, Consequently the Circuit Court Lacks Subject Matter Jurisdiction.
In matters of subject matter jurisdiction, “the courts have recognized three separate categories of jurisdiction: (1) personal jurisdiction involving authority over a specific person; (2) subject matter jurisdiction involving authority over the nature of a case and the general type of controversy; and (3) jurisdiction over a particular case involving authority to decide a specific case.” Hisle v. Lexington-Fayette Urban Cty. Gov’t, 258 S.W.3d 422, 429 (Ky. Ct. App. 2008).
The circuit court lacks subject matter jurisdiction over Allstate’s petition. A court’s jurisdiction must extend to the type of controversy. Then, that type of controversy must be justiciable. In order to have a justiciable controversy, ripeness needs to be established. Ripeness “is an element of a justiciable motion or claim.” Nordike v. Nordike, 231 S.W.3d 733, 739 (Ky. 2007). In Nordike, the court stated, “Questions that may never arise or are purely advisory or hypothetical do not establish a justiciable controversy. Because an unripe claim is not justiciable, the circuit court has no subject matter jurisdiction over it.” Id. Justiciable controversy is pursuant to Ky. Const. § 112 (5). It states that the circuit court has jurisdiction over all justiciable causes. Therefore, if the cause is not justiciable controversy then the court does not have subject matter jurisdiction.
Here, Allstate is a non-resident company. Gary Bryant and Erica Brown are not presenting a first-party claim against Allstate. They are presenting a third-party claim against Allstate’s insured, Carey Lamb. Jefferson Circuit Court does not have authority over the type of controversy, because Gary Bryant and Erica Brown presented a third- party claim on the insured, not Allstate. There is no ripe controversy because Allstate is not an expected adverse party. The circuit court lacks subject matter jurisdiction because it lacks authority over the controversy, and the said controversy is not justiciable.
- Appellee Is Not an Expected Adverse Party Under CR 27.
CR 27.01 (1) establishes that someone who is a nonresident of this state who has “an interest in real property herein, concerning which he expects to be a party to an action in a court thereof. . . may file in the circuit court of the county of the residence of any expected adverse party, or in which the real property is situated, a verified petition. . .” CR 27.01 (1) (a) establishes what must be included in a verified petition, and specifically states that the petition must show “. . . that the petitioner expects to be party to an action cognizable in a court of this state. . .” Kentucky law does not generally allow direct actions against insurance companies. The only way that Allstate could be an adverse party is if Gary Bryant and Erica Brown have a third-party bad faith claim against Allstate. Bad faith law is an attempt to unfairly delay the payment of claims and harass claimants pursuant to KRS § 304. 12-230 (12). Allstate is not an expected adverse party in any litigation Gary Bryant and Erica Brown may bring against Carey Lamb. There is no cause of action for Gary Bryant and Erica Brown to assert against Allstate, therefore Allstate cannot satisfy the requirement of CR 27 to a valid petition for pre-litigation deposition. (See, Appendix C) Unless Allstate has admitted that Gary Bryant and Erica Brown have a third-party bad faith claim against them then there is no standing to request CR 27 relief.
- The Circuit Court Did Not Conduct an Analysis of Rule 27 Factors Prior To Granting A Pre-Litigation Deposition.
The purpose of CR 27 depositions is solely to perpetuate testimony. 
- The Circuit Court Erred in Ordering Pre-Litigation Depositions for Purposes Other Than Perpetuation of Testimony.
CR 27.01(1) (e) says that the petitioner “shall ask for an order authorizing the petitioner to take the depositions of the persons to be examined named in the petition, for the purpose of perpetuating their testimony.” In other words, the circuit court has to determine that in ordering the petition for pre-litigation depositions, it must be to produce additional testimony relevant to further proceedings. Ordering a pre-litigation discovery deposition is improper for the purpose of claims investigation. A pre-litigation deposition is proper only to perpetuate testimony. Under the circumstances, Allstate is superseding the purpose of pre-litigation depositions. CR 27.01 exists only for perpetuation of testimony. Although, Allstate may claim that the pre-litigation depositions are reasonable and necessary to further proceedings, the circuit court should not have granted Allstate’s demand for discovery. Discovery is not proper under CR 27. Allstate is seeking impermissible discovery using CR 27.01.
- Perpetuation of Testimony Is Different Than Discovery Deposition.
In Meredith v. Wilson, 423 S.W.2d 519, 520 (Ky. 1968) the court addressed the issue of discovery depositions. “The right of discovery depositions is an important one vouchsafed by the civil rules.” However, the difference in depositions results from “scope of examination as well as the form of interrogation as respects depositions for discovery and depositions for perpetuation of testimony.” Id. Specifically, the court said “that depositions for perpetuation of testimony may not be used for the purpose of discovery.” Id. The court cited to CR 27, saying that it permits “petitioners to take depositions to perpetuate testimony.” Id. The purpose of perpetuating testimony is developed in such instances where “the information and evidence now available may be lost in the event of the death . . .” Id.
Here, those instances to apply perpetuation of testimony are not applicable. The discovery from the pre-litigation deposition that Allstate seeks does not develop the purposes of perpetuation of testimony. There is no anticipation of death which necessitates perpetuation of testimony.
The Jefferson Circuit Court improperly granted Allstate’s motion for pre-litigation depositions under CR 27.01. The circuit court should not have signed the order without proper notice. The circuit court erred in denying Gary Bryant and Erica Brown the ability to answer the petition and in not holding a hearing. The circuit court erred in signing the order because Allstate has no standing. The two reasons there was no standing are that the Appellee is a non-resident company and is not an anticipated adverse party. The circuit court also erred in granting the order without the analysis of perpetuating testimony pursuant to CR 27. Therefore, the request of pre-litigation depositions by Allstate exceeded the clear rule of Ky. CR 27.
Wherefore, Appellants request that this Court reverse the circuit court on the issue that allowing a pre-litigation deposition is invalid.
Aaron Michael Murphy
MURPHY & ASSOCIATES PLC
455 S. 4th Street, Suite 1250
Louisville, Kentucky 40202
Counsel for Appellants
 Ky. CR 27.01 (1).