Commonwealth Of Kentucky. Court of Appeals

Transcription

1 RENDERED: DECEMBER 15, 2006; 2:00 P.M. NOT TO BE PUBLISHED Commonwealth Of Kentucky Court of Appeals NO CA MR ELEANOR JEAN HUNTON, INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF BOBBY GENE HUNTON APPELLANT APPEAL FROM WARREN CIRCUIT COURT v. HONORABLE JOHN R. GRISE, JUDGE ACTION NO. 02-CI CITY OF BOWLING GREEN APPELLEE OPINION AFFIRMING ** ** ** ** ** BEFORE: DIXON AND TAYLOR, JUDGES; KNOPF, 1 SENIOR JUDGE. TAYLOR, JUDGE: Eleanor Jean Hunton, Individually and as Executrix of the Estate of Bobby Gene Hunton, brings this appeal from a June 13, 2005, summary judgment of the Warren Circuit Court dismissing her claim for negligent exposure to asbestos against the City of Bowling Green. We affirm. 1 Senior Judge William L. Knopf sitting as Special Judge by assignment of the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes (KRS)

2 In June 1964, the City of Bowling Green purchased real property in Warren County for the construction of a manufacturing plant for Cutler-Hammer, Inc. The City issued and sold 6.5 million dollars of revenue bonds to finance the purchase of the real estate and the construction of the plant. On June 1, 1964, the City and Cutler-Hammer entered into a lease agreement, wherein the City agreed to build the facility and Cutler-Hammer agreed to pay semi-annual rental payments. Bobby Gene Hunton worked for Cutler-Hammer in the maintenance department at the Bowling Green Plant from 1965 to While working at the plant, Bobby alleged he was exposed to asbestos from various products including pipe insulation and block insulation. Bobby eventually contracted mesothelioma caused by asbestos exposure. Bobby filed a complaint, inter alios, against the City claming he was exposed to asbestos at the Cutler-Hammer plant that caused his mesothelioma. During the pendency of the litigation, Bobby died and Eleanor Jean Hunton, Individually and as Executrix of the Estate of Bobby Gene Hunton, (Hunton) was substituted. On June 13, 2005, the circuit court entered summary judgment dismissing all claims against the City. 2 This summary 2 In the complaint and amended complaint, several other parties were named as defendants; however, these parties are not named in this appeal. -2-

3 judgment was final and appealable by order entered on September 14, This appeal follows. Hunton contends the circuit court committed error by entering summary judgment dismissing its claims against the City. Summary judgment is proper where there exists no material issue of fact and movant is entitled to judgment as a matter of law. Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476 (Ky. 1991). When reviewing a motion for summary judgment, all facts are to be viewed in a light most favorable to the nonmoving party. Id. For the reasons hereinafter explained, we are of the opinion that the circuit court properly entered summary judgment dismissing Hunton s claims against the City. Hunton attempts to hold the City liable for its alleged negligence in its capacity as a landlord. Specifically, Hunton argues: Bowling Green allowed Hunton to be exposed to asbestos on its property for over a decade during his employment in the maintenance department. Hunton s testimony describes his exposure to asbestos in detail. He was never warned about the dangers of asbestos and was not provided masks or respirators, even after OSHA began regulating asbestos exposure. Not only did Bowling Green owe a duty of ordinary care to Hunton under Kentucky law, Bowling Green breached this duty by allowing Hunton to be exposed to asbestos during his career. Hunton s Brief at

4 The law in this Commonwealth concerning landlord liability was recently set forth in Lambert v. Franklin Real Estate Co., 37 S.W.3d 770, (Ky.App. 2000): [A] landlord has a duty to disclose a known defective condition which is unknown to the tenant and not discoverable through reasonable inspection. Milby v. Mears, Ky.App., 580 S.W.2d 724, 728 (1979). However, [i]t has been a longstanding rule in Kentucky that a tenant takes the premises as he finds them. The landlord need not exercise even ordinary care to furnish reasonably safe premises, and he is not generally liable for injuries caused by defects therein. Milby at 728. [T]he landlord is under no implied obligation to repair the demised premises in the absence of a contract to that effect, nor is he responsible to a tenant for injuries to persons or property caused by defects therein, where there has been no reservation on the part of the landlord of any portion of the rented premises. In such cases the law applies to the contract or lease the doctrine of caveat emptor. Home Realty Co. v. Carius, 189 Ky. 228, 224 S.W. 751 (1920). Where the tenant is put in complete and unrestricted possession and control of the premises, as here, the landlord is liable only for the failure to disclose known latent defects at the time the tenant leases the premises. (Citation omitted.) In the summary judgment, the circuit court found that Cutler-Hammer was put in complete and unrestricted possession of the factory and that the City clearly relinquished complete and total possession of the premises while merely maintaining ownership. Hunton disagrees. He argues that the City maintained ownership and control over the plant. Hunton points -4-

5 to paragraph 8 of the lease agreement which required the City s approval before Cutler-Hammer could construct additions to the facility. Hunton also points to paragraph 11 of the agreement which required Cutler-Hammer to only substitute machinery with machinery of equal or greater value. Moreover, Hunton maintains that the City constructed the plant and much of the equipment was labeled Property of the City of Bowling Green. As the City was responsible for the construction of the plant, Hunton argues that it was also responsible for the installation and use of the asbestos containing products installed at the plant. Upon this issue, the circuit court specifically concluded: Defendant and tenant, Cutler-Hammer, took the premises as it found them. In fact, the facility was built to Cutler- Hammer s specifications. The City was not under a duty of ordinary care because it neither contracted itself to be liable for the repairs and maintenance of the facility, nor did it reserve any portion of the rented premises for itself. Nowhere in the lease between the parties, or in any other documentation, can affirmative warranties by the City of the condition of the premises be found. It is difficult for the Court to imagine another situation where the landlord so clearly relinquished complete and total possession of the premises while merely maintaining ownership.... It is clear from the record that the City of Bowling Green did not maintain the type of control over the Cutler-Hammer facility necessary for any liability to attach to it. Nothing in the lease reserves a part of the facility or the land upon which the facility sat to the City. The -5-

6 City controlled the premises as only a landlord protecting his investment would. The basis of the landlord-tenant relationship is delivery of possession of the property, not delivery of ownership. All landlords retain ultimate control by virtue of their ownership of their properties. The landlord must protect his investment. In this case, however, it is hard to discern what level of control the City could have given to Cutler-Hammer beyond what was given so as to avoid liability as a landlord. The City had a $6.2 million dollar investment to protect. The placement of identification tags and the restrictive provisions of the lease were in place to assist in protection of the investment. The City, through these provisions, was simply protecting its ownership and making sure that the debt it was incurring would be covered instead of directing the business of Cutler-Hammer. We agree with the circuit court. There is no evidence offered by Hunton that the City undertook a duty of repair under the lease agreement or reserved any part of the premises for itself. Indeed, section 9 of the Lease Agreement specifically stated that the tenant, Cutler-Hammer, was responsible for all repairs to the premises and for the upkeep of all equipment and machinery located thereon. Additionally, the City did not undertake any responsibility for injuries to persons or property caused by any defects in the factory. Upon the whole, we agree with the circuit court that Cutler-Hammer was put in complete and unrestricted possession and control of the factory. -6-

7 Hunton also alleges that the asbestos constituted a latent defect and that the City of Bowling Green had a duty to disclose the defect. As stated above, where a tenant is put in complete and unrestricted possession of a leased premises, the landlord is only liable for failure to disclose known latent defects at the time the premises is leased to the tenant. See Lambert, 27 S.W.3d 77 and Carver v. Howard, 280 S.W.2d 708 (Ky. 1955). Specifically, Hunton contends: [A]ssuming arguendo that the principles of Lambert do apply, there is evidence that Bowling Green knew or should have known, that the property was defective. It was well documented that asbestos exposure was a health hazard for decades before Bowling Green s Plant was constructed in In the early 1970 s, the federal government began to regulate asbestos exposure in employment setting due to its health implications. As Hunton worked at Bowling Green s facility until 1977, Bowling Green cannot maintain that it did not know about the dangers of asbestos prior to the time Hunton s employment ended. Hunton s Brief at 10. Essentially, Hunton is arguing that an issue of fact existed upon whether the asbestos constituted a latent defect. Hunton believes the evidence is disputed upon whether the City of Bowling Green knew or should have known that the asbestos containing products in the plant constituted a health hazard. As evidence, Hunton cites to federal government regulations effective in the 1970 s that sought to limit work -7-

8 place exposure to asbestos. As Bobby worked at the plant until 1977, Hunton argues that Bowling Green cannot maintain that it did not know about the dangers of asbestos prior to the time Hunton s employment ended. However, a landlord only has a duty to disclose known latent defects at the time the tenant leases the premises. Cutler-Hammer leased the premises in 1964, and Hunton has not cited this Court to evidence demonstrating that the City was aware of or should have been aware of the toxic nature of asbestos in Consequently, we believe that the circuit court properly concluded that the City did not fail to disclose a latent defect in the factory. Hunton also asks this Court to revisit and expand the long standing rule in this Commonwealth concerning landlord liability. We decline to do so. In sum, we are of the opinion that the circuit court properly entered summary judgment dismissing all claims against the City. For the foregoing reasons, the summary judgment of the Warren Circuit Court is affirmed. ALL CONCUR. -8-

9 BRIEFS FOR APPELLANT: Kenneth L. Sales Joseph D. Satterley D. Matthew Kannady Louisville, Kentucky ORAL ARGUMENT FOR APPELLANT: Joseph D. Satterley Louisville, Kentucky BRIEF FOR APPELLEE: H. Eugene Harmon Bowling Green, Kentucky Dixie R. Satterfield Satterfield Law Firm Bowling Green, Kentucky ORAL ARGUMENT FOR APPELLEE: Dixie R. Satterfield Satterfield Law Firm Bowling Green, Kentucky -9-