NICKELL, Judge:
Underlying these three related appeals are three commercial equipment and furniture leases Kentuckiana Medical Center, LLC ("KMC")
Now that KMC has defaulted, the doctors admit signing the guaranties, but dispute
In the context of whether the trial court properly granted Appellees summary judgment, we will address whether: the trial court awarded the correct amount of damages; the trial court abused its discretion in denying a motion to withdraw matters deemed admitted where Appellants did not timely respond to a request for admissions their attorney claimed was not received; and, the defenses of mistake and fraud were meritorious where some of the doctors claimed two of their own — not the Appellees or anyone acting on their behalf — misled them into signing the guaranties by assuring them they would be liable in an amount equal to their pro rata ownership of KMC rather than joint and several liability as plainly stated in the guaranties. Having reviewed the record, the briefs and the law, we affirm.
Despite a multitude of twists and turns, this is a deceptively simple case made complex by a missed deadline, multiple parties, and a significant amount of money being at stake. In our truncated, though still lengthy, recitation of facts we mention only those relevant to our holding. Due to limited discovery having occurred in this case, much of the history is culled from affidavits.
A plan was developed to launch KMC, a full-service, physician-owned hospital in Clarksville, Indiana, as a joint venture between Cardiovascular Hospitals of America, LLC ("CHA"), an entity based in Wichita, Kansas, and Kentuckiana Investors ("KI"), a consortium of local physicians who would practice at KMC. CHA was to be the majority shareholder — owning fifty-one percent of KMC — and KI was to be the minority shareholder — owning the remaining forty-nine percent. Dr. Christodulous Stavens, one of the Appellants, served as both the Chief Executive Officer ("CEO") of KMC and the initial manager of KI.
Doctors who purchased shares in KI were subject to KI's 2007 operating agreement in which they agreed:
LGP, CUB and PBM were not parties to the KI operating agreement and there is no evidence they were aware of its terms.
With the foregoing backdrop in mind, we shift our focus to the three commercial leases and two personal guaranties at the heart of these three appeals. To outfit KMC with equipment, furniture and supplies, lease agreements with LGP were contemplated. To pave the way for the lease agreements, between May 26, 2009, and June 3, 2009, the thirty physicians signed two personal guaranties — a fact that is undisputed. In their entirety, the identical guaranties read:
All parties agree the only direct contact between the individual doctors and LGP occurred when each doctor signed the two guaranties. Ben Shown, a LGP sales representative, stated in an affidavit that he personally witnessed all thirty doctors sign the single guaranty for Lease Nos. 11684 and 11681 and the separate guaranty for Lease No. 11661. All signatures were procured in May and June 2009, about two weeks before the two June leases were executed and about three months before the September lease was executed. Shown described the signing process as follows:
Shown also explained the staggered starting dates for the leases. Because all of the items being leased could not be delivered at one time, as an accommodation to KMC, two leases were executed in June and the third was delayed until September when the final items were delivered.
As mentioned previously, Digenis was the only doctor who claimed he asked about "joint and several liability" before signing the guaranties. He stated in his affidavit,
There is no proof, or even an allegation, that any doctor — besides Stavens and/or Hallal — had direct contact with LGP, CUB or PBM (other than at the time of signing the guaranties); was asked to sign a document for the benefit of CUB or PBM relating to the guaranties; or was misled by Appellees or anyone acting on their behalf.
Stavens executed the three commercial lease agreements with LGP on KMC's behalf and admitted doing so in an affidavit dated December 8, 2010. According to the lease agreements, Lease Nos. 11661 and 11681 pertained to equipment received by KMC on June 23, 2009, and were signed that day; Lease No. 11684 pertained to
Things progressed smoothly until mid-2010, when KMC defaulted on all three leases. When their demands for payment were ignored, Appellees filed suit
On September 21, 2010, Hon. Michael McClain filed a single answer
To move the case along, on September 24, 2010, Appellees mailed a discovery request, including a request for admissions and interrogatories,
Turner's affidavit, dated November 2, 2010, explained how the guaranties, leases, and associated promissory notes and security agreements came into being and specified $2,033,207.92 was due on Lease No. 11681; $579,676.62 was due on Lease No. 11684; and $277,521.30 was due on Lease No. 11661. Despite demand having been made for all three sums, Turner stated no payment had been received. The figures listed in Turner's affidavit mirrored proofs of claim
In their summary judgment motion, Appellees argued Appellants' failure to respond to the request for admissions should result in these matters being deemed admitted and conclusively established under CR 36.02: 1) KMC entered into Lease No. 11661 with LGP on June 23, 2009, and subsequently defaulted leaving an unpaid balance of $277,521.30; 2) KMC entered into Lease No. 11681 with LGP on June 23, 2009, and subsequently defaulted leaving an unpaid balance of $2,033,207.92; 3) KMC entered into Lease No. 11684 with LGP on September 3, 2009, and subsequently defaulted leaving an unpaid balance of $579,676.62; and, 4) all thirty Appellants executed two personal guaranties making each liable for the full amount due and when payment was demanded, Appellants did not respond. Citing Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476, 482 (Ky.1991), Appellees posited they were entitled to summary judgment because any genuine issue of material fact should be deemed admitted and any defense or dispute was nullified.
Two days later, on November 10, 2010, McClain moved for an extension of time — until December 10, 2010 — to respond to the summary judgment motion. Curiously, the extension motion made no mention of the original request for admissions mailed in September, nor the duplicate copy attached to the summary judgment motion served in November. When the extension motion was orally argued on November 15, 2010, Appellees did not object, and again there was silence from Appellants about the request for admissions. The trial court gave Appellants until December 10, 2010, to respond to the summary judgment motion.
The situation appears to have finally crystallized for McClain on December 10, 2010 — a day marked by a flurry of filing activity by Appellants. A response was filed on behalf of twenty-seven of the thirty doctors opposing Appellees' motion for summary judgment coupled with a cross-motion for summary judgment in their own favor. The response argued Appellees should not be granted summary judgment because: 1) the guaranties, which were drafted by Appellees, were ambiguous — while stating the maximum aggregate liability was $3,200,000.00, the guaranties did not specify whether that figure included attorney's fees and costs
The final argument in the response/cross-motion mentioned the request for admissions for the first time:
McClain's affidavit, referenced above, stated in relevant part:
Also attached to the response/cross-motion was an affidavit from Stavens admitting KMC had entered into two leases with LGP on June 23, 2009, and a third lease on September 3, 2009, and he had signed all three leases as KMC's CEO. He also stated in late May and early June 2009, all thirty doctors "executed two separate, but identical documents entitled `Unconditional Guaranty of Payment,' ... in favor of LGP."
Also filed December 10, 2010, was a motion to withdraw matters deemed admitted. The motion says McClain's affidavit is attached, but no affidavit was attached to the copy filed in the trial court record.
When the withdrawal motion was finally heard on January 5, 2011, Appellees recounted the history of their request for admissions beginning with the mailing in September 2010, and ending with passage of several months without receipt of a response or a motion for an extension of time in which to respond. Appellees noted Turner's affidavit, which Appellants had not contested, "subsumed" all of the requested admissions, rendering moot the need for admissions. Appellees expressed a desire for Appellants to answer the interrogatories and requests for production it had served, but objected to the trial court allowing withdrawal of the matters deemed admitted and/or the filing of a late response to the request for admissions because Appellants had failed to respond and withdrawal would not serve the merits of the case as required by CR 36.02 since the matters deemed admitted would likely be stipulated at any hearing or trial. In response, McClain stated the request for admissions was not received until the summary judgment motion arrived in November with a copy attached, and further explained he had not tendered a late response because CR 36.02 requires leave of court to do so. As the eleven-minute hearing wore on, McClain requested the opportunity to respond to Appellees' discovery requests, but acknowledged uncertainty that a late response would change the posture of the case because,
At the close of the hearing, the trial court allowed McClain to tender responses, but did not say the responses would be filed or considered.
While debate roiled over whether matters in the request for admissions should be deemed admitted or allowed to be withdrawn, the once-cohesive group of thirty doctors splintered into factions. On January 10, 2011, Hon. R. Kenyon Meyer and Hon. Caroline Lynch Pieroni entered an appearance on behalf of Drs. David Britt, Brian Paradowski, Keith B. Carter and McConnell. These four doctors were allowed to file a surreply
In the meantime, on January 12, 2011, McClain mailed a response to Appellees' first discovery request on behalf of all thirty Appellants. Regarding the request for admissions, Appellants responded: 1)
On January 18, 2011, Hon. David Kaplan filed a notice of appearance on behalf of Drs. Abdul Buridi and Glisson and moved for leave to file a surreply to the summary judgment motion. Two days later, the trial court granted leave for Kaplan to file an amended answer on behalf of Buridi, Glisson and Dr. Hussein. The amended answer raised defenses of fraud and mistake for the first time — based on assurances made by Stavens and Hallal to the doctors that the extent of their financial liability would be limited to their pro rata ownership of KMC — and the allegation that LGP "knew or should have known that Hallal and Stavens had misrepresented to [Appellants] their maximum exposure on the Guaranty." The amended answer further alleged the guaranties did not form a contract due to inadequate consideration, no meeting of the minds, and Stavens and Hallal having exceeded their authority or agency by delivering the signed guaranties to Appellees "without notifying [the doctors] as to the nature and extent of the obligations [the doctors] were being asked to guarantee personally."
On February 1, 2011, a surreply to the summary judgment motion was also filed on behalf of these three doctors, arguing discovery was incomplete, genuine issues of material fact were unresolved, and the proof of damages was insufficient because Turner's affidavit did not show how the amount claimed was calculated. This surreply also suggested Appellees should have reviewed the KI operating agreement to discover its inconsistent terms, and should have questioned the authority the doctors had given to Stavens and Hallal.
Also on February 1, 2011, McClain filed a surreply on behalf of twenty-one
On April 28, 2011, the trial court issued an opinion and order granting summary judgment to Appellees. The opinion summarized the handling of the request for admissions as:
In denying Appellants' motion to withdraw the matters deemed admitted, the trial court held doing so would prejudice Appellees by causing them to rework their summary judgment motion and engage in discovery. The trial court further held,
This last passage appears to be an especially bitter point of contention for Appellants who maintain they consistently challenged the enforceability of the guaranties and the amount owed. Ultimately, the trial court concluded a general denial without supporting proof was insufficient to overcome the summary judgment motion.
Next, the trial court held the personal guaranties were enforceable under KRS 371.065 because they contained an internal reference specifying the nature and location of the property being leased. The trial court held inclusion of these terms adequately identified the debt the doctors were securing by executing the guaranties; eliminated the need for the guaranties to state the maximum aggregate liability and termination date; and, made post-execution addition of the lease numbers "irrelevant." The trial court repeated that any question about the amount owed had been deemed admitted.
Next, the trial court rejected Appellants' argument that even if the guaranties were statutorily sound, they were unenforceable by CUB and PBM because while the leases had been assigned to the banks, the guaranties had not. The trial court found a merger clause contained in paragraph 22 of each lease integrated the guaranties into the leases. The merger clause stated:
Therefore, assigning the leases to CUB and PBM — which all parties agree occurred
Next, the trial court rejected claims of mutual mistake and lack of a contract because the parties never reached a meeting of the minds. The trial court found a unilateral mistake by the doctors was not grounds to rescind or reform the guaranties. Campbellsville Lumber Co. v. Winfrey, 303 S.W.2d 284, 286 (Ky.1957). While a mutual mistake — one made by both parties — would have supported rescission, the necessary elements
Finally, the trial court rejected the doctors' plea that the state court litigation be stayed because the bankruptcy court had recently ordered KMC to make adequate protection payments. The trial court concluded "a mere payment schedule will not absolve all liability" and Appellees will not be "unjustly enriched" by a double recovery because any amounts paid by KMC will be credited against the debt owed by Appellants and vice versa.
In the wake of the trial court awarding summary judgment to Appellees, three motions to alter, amend or vacate were filed. These motions argued: the bankruptcy court had entered summary judgment for KMC on May 6, 2011 — after the trial court had awarded summary judgment to Appellees on April 28, 2011 — finding the leases were "disguised security agreements";
The motions also argued: the judgment amount was wrong; the only proof of damages — Turner's affidavit — merely stated amounts due without supporting documentation and proof recently mustered by Appellants showed the proper amount should be only $2,310,191.75; questioned whether credit had been given for $30,000.00 in adequate protection payments made by KMC; the description and location of the leased property mentioned in the guaranties was too vague to qualify as an "express" reference to the three leases that were yet to be written; under KRS 371.065, guaranties may secure only existing instruments, and since the guaranties and leases were not executed contemporaneously, the guaranties were unenforceable. Finally, Appellants argued Appellees failed to mitigate damages; and, Appellants' failure to read the guaranties before signing should be excused due to fraud in the inducement.
McClain supported the CR 59.05 motion he filed with several items, including an affidavit from Timothy J. Donahue, KMC's Chief Restructuring Officer, dated May 9, 2011, saying the amount owed was $2,310,191.75 — nearly $600,000.00 less than the amount awarded. Since summary judgment had been entered April 28, 2011, the trial court determined Appellants had offered this proof too late, but did modify the original opinion to retain control over the judgment amount to ensure any payments made by both KMC and the doctors were credited appropriately.
In reviewing Donahue's affidavit, we note it referenced two other items — an invoice from CUB dated May 3, 2011, and an invoice from PBM dated May 4, 2011 — neither of which existed while the summary judgment motion was pending. However, Donahue's affidavit also referenced several other items that did exist but were not produced while the motion was pending, including: 1) a minute entry/order of the bankruptcy court dated February 17, 2011, requiring KMC to make $10.000.00 adequate protection payments
In a twenty-one page opinion and order entered on September 23, 2011, the trial court denied all three motions to alter, amend or vacate — with the exception of retaining jurisdiction to ensure payments were appropriately credited. The opinion reiterated that Appellants had not responded to the request for admissions when it was mailed in September 2010, nor had they reacted timely upon receiving a duplicate copy with the summary judgment motion in November 2010. The trial court stated "even absent the first failure, no excuse exists as to the second instance" and went on to say,
As further explained in the opinion, the trial court found sufficient grounds to enforce the guaranties wholly apart from the admissions, and deemed the admissions important — if at all — on the limited issue of damages. The trial court found the guaranties were enforceable based solely on the internal reference to the furniture and equipment being leased and its location — a decision reached without reliance on the matters deemed admitted, or the late response to the admissions. The trial court specifically noted: KRS 371.065 does not require a guaranty to include a lease number to be enforceable; Appellants had sufficient details to avoid insuring an unknown risk; and, the details provided were better than a lease number. On the claim that the guaranties and leases had to be executed contemporaneously, the trial court found KRS 371.065 does not require a lease to be in existence when a guaranty is executed and a court cannot add a requirement not included by the legislature. The trial court found Appellants' citation to the opinion of the bankruptcy court — which had not been rendered when the trial court awarded summary judgment to Appellees — was untimely and did not warrant relief. The trial court also concluded there was no evidence of mutual mistake and no apparent fraud or misrepresentation. The trial court found the doctors' failure to conduct due diligence before signing did not justify reforming the guaranties.
Finally, on the issue of damages, the trial court found the amount awarded was supported by Turner's affidavit, and the lease terms eliminated the requirement that Appellees mitigate damages.
Ultimately, the central issues in this case are whether the guaranties were enforceable, the trial court properly granted summary judgment to Appellees without allowing more time for discovery, and the judgment amount was correct. To address the question of enforceability, we begin by reviewing KRS 371.065, a statute "unique to Kentucky." Intercargo Ins. Co. v. B.W. Farrell, Inc., 89 S.W.3d 422, 426 (Ky.App.2002). Our review will be de novo — without deference to the trial court's interpretation. Wheeler & Clevenger Oil Co., Inc. v. Washburn, 127 S.W.3d 609, 612 (Ky.2004) (internal citations omitted).
Few cases interpret KRS 371.065, but those that do recognize its goal is to "reduce the risk" a consumer will agree to an unknown obligation — not to "eliminate" all unknown obligations. Alliant Tax Credit Fund 31-A, Ltd. v. Nicholasville Community Housing, LLC, 663 F.Supp.2d 575, 582 (E.D.Ky.2009) (citing Wheeler, 127 S.W.3d at 615 and collecting cases). Thus, our overall inquiry is whether the guaranties provided the doctors — sophisticated and learned individuals — sufficient detail to know the breadth of the obligation they were accepting before they signed. We believe they did.
KRS 371.065 directs:
The statute identifies three scenarios under which a guaranty may be valid or enforceable: (1) the guaranty may be written on the instrument being guaranteed; (2) the guaranty may "expressly refer to" the instrument(s) being guaranteed; or (3) the guaranty may specify the guarantor's maximum aggregate liability and the date the guaranty ends.
By reading the guaranties, we have gleaned the following details: the guaranties
The signed guaranties provided to us also bear handwritten lease numbers, but we discount that fact because the leases were finalized after the guaranties were signed, making the lease numbers unknown to the doctors at the time of execution. Even so, because the doctors voluntarily signed the guaranties without benefit of having seen the actual leases, it is highly doubtful the mere lease numbers would have held much value for the doctors.
Based upon the eight pieces of valuable information recited above, we believe the doctors knew full well the obligation to which they bound themselves by signing the guaranties and had sufficient details upon which to calculate the risk being undertaken. After all, they were launching a hospital; they knew equipment, furniture and supplies would be needed to diagnose, treat and feed the patients; and there is no suggestion there was any confusion about the purpose or magnitude of the leases between KMC and LGP, nor that the guaranties pertained to an instrument or instruments other than the three leases discussed herein. Several doctors even stated in affidavits that the leases between KMC and LGP were contemplated when the guaranties were executed. For example, Digenis stated KMC and LGP:
This same recollection was echoed in affidavits signed by Kaqvi and Sharma. Rahman referred to "the early stages of a proposed business transaction between KMC and [LGP]" in his affidavit. Thus, it would be disingenuous for the doctors to now claim they did not know the guaranties secured the leases being negotiated between, and subsequently executed by, KMC and LGP. Moreover, we note that KRS 371.065 neither expressly mandates only "existing" instruments may be guaranteed, nor that "future" instruments may not be guaranteed. We will not read words into a statute that are not there. Bohannon v. City of Louisville, 193 Ky. 276, 235 S.W. 750, 752 (1921).
We do not place much stock in Appellants' claim that the guaranties and leases had to be created contemporaneously or that the lease had to exist before the guaranties were signed. The guaranties clearly anticipated future action by twice using the word "will" as in, "[t]he Leases
We find support for our view in Smith v. Bethlehem Sand & Gravel Co., LLC, 342 S.W.3d 288, 294 (Ky.App.2011), where a one-day delay between execution of a note and a guaranty was deemed "immaterial" because both were part of a single transaction. So it is with the peculiar facts of this case.
First, we are not troubled by the fact that the two guaranties are identical and do not distinguish between the two leases executed on June 23, 2009, and the single lease executed on September 3, 2009. Shown explained in his affidavit that the staggered starting dates were an accommodation to KMC — to prevent them from paying for items in June that would not be delivered until September. Because both guaranties were part of a single transaction, absence of a distinguishing factor is not fatal.
Second, while nearly three weeks passed between execution of the guaranties and two of the leases, and three months passed before execution of the third lease, the previously mentioned doctors' affidavits indicate negotiations were underway to finalize the leases when the guaranties were signed — said guaranties being the inducement for LGP to enter into the leases. It would be rare for a fully operational hospital to spring up overnight. It does not surprise us that there was a sequence of events leading to the launch of the hospital and that all of those of events were interrelated, but not contemporaneous. Based on the facts of this case, we believe the guaranties secured the leases and were enforceable. Therefore, we affirm the trial court on this issue.
The next issue we address is the trial court's handling of Appellees' request for admissions. When Appellants failed to respond, several matters were automatically deemed admitted under CR 36.02.
Harris v. Stewart, 981 S.W.2d 122, 124 (Ky.App.1998), succinctly states the law regarding requests for admissions and the peril of not responding.
Here, a request for admissions was mailed to McClain on September 24, 2010. When no response was received, on November 8, 2010, Appellees moved for summary judgment and attached a copy of the request for admissions to the motion, asking that the matters included in the request be deemed admitted. McClain asked for more time to respond to the summary judgment motion and even orally argued for an extension of time — but never mentioned the request for admissions. It was not until about December 10, 2010, that McClain realized a request for admissions had been served in September, with a second copy provided in November, and the October deadline for responding had long expired. As a result, McClain prepared an affidavit stating he did not receive the request in September; did not promptly see the second copy in November; but in December, had moved the trial court to allow the matters deemed admitted to be withdrawn, and to grant leave of court for filing a late response.
At a hearing on January 5, 2011, counsel for Appellees' opposed withdrawal of the matters deemed admitted, noting all the matters covered in the request for admissions were "subsumed" within Turner's affidavit which Appellants had not contested — making the need for answers now moot. McClain also spoke of mootness, noting the doctors had no contrary proof to offer and the only matter they could possibly contest was the calculation of damages. Still, McClain asked for the opportunity to respond to the request for admissions. The trial court indicated it would allow the doctors to place a response in the court file, but did not say any such response would be filed in the record or considered. On January 12, 2011, McClain submitted a late response to the request for admissions which was placed in the court file.
Ultimately, however, the trial court did not consider the late response, and did not permit withdrawal of the matters deemed admitted. Appellants claim this was error because: Appellees did not prove they would be prejudiced by withdrawal; Appellants were unduly prejudiced; and even though the doctors had always admitted signing the guaranties, they had consistently disputed enforceability of the guaranties and the balance due under the leases.
The trial court found Appellees would be prejudiced if discovery were prolonged due to Appellants' untimely admissions, and if Appellees had to rewrite their summary judgment motion. The doctors argue that is not the type of prejudice envisioned by CR 36.02, and we agree. However, as we will discuss later, absence of prejudice is only one part of a two-part test. Under CR 36.02, withdrawal
In F.D.I.C. v. Prusia, 18 F.3d 637, 640 (C.A.8 1994),
Deeming the Prusia analysis to be logical and persuasive, we conclude that Appellees having to engage in discovery and rework a summary judgment motion so early in the litigation was not the type of prejudice envisioned by CR 36.02.
But prejudice is only one part of the equation. The trial court must also evaluate whether "the presentation of the merits of the action will be subserved" by withdrawal or amendment. It is with this part of the analysis that we have difficulty seeing how withdrawal of the matters deemed admitted would have done anything but delay the inevitable — a loss for Appellants.
When contract terms are unambiguous, we look only to the four corners of the document — in this case, the guaranties — to determine the intent of the parties. See 3D Enterprises Contracting Corp. v. Louisville and Jefferson County Metro. Sewer Dist., 174 S.W.3d 440, 448 (Ky.2005). "The fact that one party may have intended different results, however, is insufficient to construe a contract at variance with its plain and unambiguous terms." Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381, 385 (Ky.App. 2002). In these guaranties, the phrase, "they shall be liable jointly and severally" is clear and unambiguous. Thus, we have no need to consider the 2007 KI operating agreement — especially since Appellees were not parties to it. Also in their answer, the doctors said each guaranty "speaks for itself and the Physician Defendants deny any characterization of that document that is inconsistent with its express terms." Thus, the doctors acknowledge agreeing to be bound "jointly and severally" for KMC's debts.
Turner's affidavit stated KMC had breached the leases and damages of $2,890,405.80 were due and owing. While the doctors attacked Turner's affidavit for not showing how the damages were calculated, they did not offer their own calculation prior to the entry of summary judgment. In fact, at a hearing on January 5, 2011, McClain stated the only item the doctors could contest was the amount owed; they would likely have to admit the facts contained in Turner's affidavit; and, they had no contrary evidence to offer.
The foregoing review of the proof eliminates any material issue of genuine fact, thus, paving the way for the award of summary judgment to Appellees. We simply do not see how allowing withdrawal of the matters deemed admitted and permitting discovery would have changed the outcome of the issues between these particular parties.
Appellants further argue the guaranties were unenforceable due to noncompliance with KRS 371.065. As previously noted, however, the guaranties were statutorily sound because they expressly referred to the leases they guaranteed.
The doctors generally denied the amount Appellees claimed was due, but offered no proof of a different amount until after summary judgment had already been awarded. A general denial was insufficient. "[A] party opposing a properly supported summary judgment motion cannot defeat it without presenting at least some affirmative evidence showing that there is a genuine issue of material fact for trial." Steelvest, 807 S.W.2d at 482. Appellants offered no such proof while the summary judgment motion was pending.
As support for a CR 59.05 motion, McClain submitted a bankruptcy court opinion entered May 6, 2011; an affidavit showing the judgment amount should be reduced by nearly $600,000.00; and, other affidavits, payment histories, and invoices. However, a motion to alter, amend or vacate cannot be used "to introduce evidence that should have been presented during the proceedings before the entry of the judgment." Gullion v. Gullion, 163 S.W.3d 888, 893 (Ky.2005) (internal citations omitted). In that same vein, "[i]t is improper for a trial court to rely upon evidence of events that occurred subsequent to the trial in ruling on a CR 59.05
While we agree there was an insufficient showing of prejudice, we do not believe the presentation of the merits would have been advanced by allowing withdrawal. Furthermore, we would not characterize the trial court's ruling as an abuse of discretion. CR 36.02 says "the court
As the trial court stated, even if the lack of a response to the original mailing of the request for admissions in September was excusable due to nonreceipt, there was no excuse for counsel's failure to immediately seek permission to file a late response when the copy attached to the summary judgment motion was received in early November. Counsel admits receiving the second copy, but says he did not notice it until he began preparing his response to the summary judgment motion. It appears the second copy of the request sat in counsel's office, unbeknownst to him, for about one month — from November 8, 2010, or thereabouts, until about December 10, 2010.
Harris cautions about the risk of not timely responding to a request for admissions. We reiterate that warning here. In light of these facts, we cannot deem the trial court's decision to enforce the literal terms of CR 36.02 an abuse of discretion. See Manus, Inc. v. Terry Maxedon Hauling, Inc., 191 S.W.3d 4, 8 (Ky.App.2006). To reverse the trial court would erode our rules of procedure. Seeing nothing "arbitrary, unreasonable, unfair, or unsupported by sound legal principles" in the trial court's decision, English, 993 S.W.2d at 945, we affirm.
Finally, Appellants argue summary judgment was inappropriate because genuine issues of material fact existed and Appellants had no real opportunity to take discovery. We disagree. As previously noted, we discern no unresolved facts. Furthermore, Appellants had the opportunity to take discovery — but did nothing. Shown's deposition was scheduled at Appellants' request, but without explanation, Appellants cancelled it. Appellants have identified no discovery they wished to take but were prohibited from completing.
In reviewing the trial court's award of summary judgment, our task is to determine whether the trial court correctly found an absence of genuine issues of material fact and that Appellees were entitled to judgment as a matter of law. CR 56.03. On the basis of the record before us, we could reach no other conclusion. Appellants "could not prevail under any circumstances." Steelvest, 807 S.W.2d at 480 (citing Paintsville Hospital Co. v. Rose, 683 S.W.2d 255 (Ky.1985)).
In reviewing these three appeals, the doctors' real objection appears to have nothing at all to do with LGP, CUB or PBM. Their objection is that they had agreed to pro rata liability under the 2007 KI operating agreement and assumed the guaranties they executed in 2009 were either consistent with or subservient to that operating agreement — an assumption that turned out to be legally unfounded and incorrect. Had the doctors read the guaranties and consulted with legal counsel to resolve any questions — both of which they had the opportunity to do but did not — it is unlikely they would be in their current predicament. Because the doctors failed
Therefore, we affirm the trial court's award of summary judgment to Appellees, and its order that Appellants, jointly and severally, pay Appellees the amount of $2,890,405.80. We also recognize the trial court's retention of continuing jurisdiction over the damages award to ensure all payments made by KMC and the doctors are properly credited.
ALL CONCUR.
