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Embry v. Mac's Convenience Stores, LLC

Court of Appeals of Kentucky

January 25, 2019



          BRIEFS FOR APPELLANT: David Yates Thomas Juanso Louisville, Kentucky

          BRIEF FOR APPELLEE, MAC'S CONVENIENCE STORES, LLC, D/B/A CIRCLE K: Christopher P. O'Bryan Mark E. Hammond Whitney R. Kramer



          LAMBERT, J., JUDGE.

         Danny Embry has appealed from the summary judgment of the Jefferson Circuit Court in favor of Mac's Convenience Stores, LLC, d/b/a Circle K (Mac's), and dismissing his claims after deeming admitted requests for admission propounded by Mac's for his failure to file a response. We reverse and remand.

         This matter has previously been appealed to this Court, and we shall adopt the factual and procedural background as set forth in those opinions:

On June 23, 2006, Danny Embry injured his ankle as he stepped from his trailer onto uneven pavement at a Circle K gas station and convenience store. He brought suit in Jefferson Circuit Court against Circle K Midwest. Embry was initially granted a default judgment which was later set aside on the grounds of excusable neglect. The circuit court thereafter granted summary judgment to the defendants and this appeal by Embry followed.
Embry visited the Circle K to buy gasoline. He was driving a pickup truck which hauled a trailer carrying two commercial lawn mowers, weed eaters and a backpack blower. Embry parked next to a gas pump, opened the gas caps on the lawn mowers and then stepped into the trailer to check the gas levels of the mowers. He then stepped backwards from the trailer to the ground and fell, injuring his ankle. According to Embry, his fall was caused by stepping onto an area of uneven pavement. Embry alleges that as a result of the fall, he developed reflex sympathetic dystrophy, a chronic and debilitating neurological condition.
The manager of the Circle K notified the company's insurance administrator, Karen Frazer, of Embry's accident. Frazer in turn reported the incident to Sylvia Fierros, of Constitution State Services, LLC (CSS). CSS is the third-party administrator for liability claims for Mac's Convenience Stores, LLC. CSS handles claims for Circle K and Circle K's liability carrier, St. Paul Fire and Marine Insurance Company.
Embry filed suit against Circle K Midwest on August 29, 2006, alleging negligence on the part of Circle K in maintaining its property. He was later granted leave to amend his complaint to name Mac's Convenience Stores, LLC, as the appropriate defendant. Prior to the filing of the complaint, Embry's counsel had already made contact with Fierros, who wrote him a letter on August 17, 2006, informing him that Embry's claim was being denied. In a letter of August 28, 2006, she refused counsel's request for a copy of video surveillance tape of the gas station from the day Embry's injury occurred. Embry's counsel tendered a courtesy copy of the complaint and discovery requests to Fierros the day before he filed the complaint.
When Frazer received Embry's complaint from Circle K's registered agent, she forwarded it to Fierros, who confirmed receipt of the complaint and advised Frazer that legal counsel would be retained to take over handling of the claim. Fierros and plaintiff's counsel agreed to an extension of time for Mac's Stores to file an answer to the complaint. According to Embry's counsel, he agreed to the extension in order to give Fierros time to "clear up the picture" on the video surveillance tape. He also states that when Fierros forwarded the tape, the portion showing Embry's fall was missing.
After receiving the extension of time to file an answer, CSS claims handler John McCarthy instructed attorney Michael S. Maloney of the law firm Schiller, Osbourne and Barnes, to file an answer. As evidence for this, CSS produced a facsimile cover sheet, dated September 29, 2006, which was allegedly sent by McCarthy to Maloney. The cover sheet states, "We have extension until October 4th. Sylvia [Fierros] would like you to file Answer ASAP. File to follow next week." At Maloney's law firm, incoming facsimiles are initially transmitted to a telecommunications provider who in turn forwards the facsimile to the attorney's e-mail inbox. According to Maloney, he never received the e-mail facsimile. Consequently, no answer or responsive pleading was filed.
Five days after the expiration of the extended time to file an answer, Embry filed a motion for entry of default and a default judgment certificate. The trial court entered an order on October 16, 2006, granting the motion. A bench trial on damages was held on February 26, 2007. Embry requested damages of slightly over $3.9 million, which included items such as past and future medical expenses, lost wages and pain and suffering. The trial court entered judgment in the amount of $2.29 million. During the course of the hearing, the trial court commented to Embry's counsel that the court assumed Circle K Midwest had no defenses to Embry's claims. Counsel responded by stating, "We tried, we really tried."
On April 2, 2007, Maloney received a package from CSS containing a letter from Fierros and the Embry claims file. The letter stated that the claims file had previously been sent to Maloney and requested a current status on the case. Maloney had no idea what the letter was about. He contacted Embry's counsel and an employee of CSS, who sent over a copy of the fax cover sheet. Maloney immediately filed a notice of appeal on behalf of Circle K as well as a motion to set aside the default judgment and a motion to file a late answer.
The trial court granted the motion to set aside the default judgment based upon a finding of excusable neglect. In setting aside the judgment, the court acknowledged that Fierros had been negligent in failing to make certain that Maloney received the facsimile transmission requesting that he file an answer in the lawsuit. The court also found a valid excuse for that negligence, however, in that Fierros apparently sent the facsimile, obtained a confirmation sheet for it, and earnestly believed that the transmission had gone through. The court concluded that "some indeterminate error in cyberspace" caused the disappearance of the facsimile. The ...

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