Recent Firm Highlights & News
2024 Open Records Request case: MGM continues it successful representation of the Kentucky Kernel Press, Inc., in its joint effort with College Heights Herald to enforce the Kentucky Open Records Act against Western Kentucky University (“WKU”). Both student-run newspapers sought to require WKU to disclose Title IX investigations into sexual misconduct allegations made against university employees. After the Attorney General ordered WKU to produce the documents with the names and personal identifiers of the complainants and witnesses redacted, and following the Kentucky Supreme Court’s Opinion in University of Kentucky v. Kernel Press, Inc., 620 S.W.3d 43 (Ky. 2021) (in which MGM also represented the Kentucky Kernel), WKU argued that it should be permitted to withhold the names of employees who were the subject of unsubstantiated allegations. In its August 16, 2024, Order in Western Kentucky University v. College Heights Herald, and The Kernal Press, Inc., d/b/a The Kentucky Kernal, case 17-CI-0233, the Warren Circuit Court rejected that argument, noting that the public interest would not be served by such an outcome. “WKU employees who were wrongfully accused could be vindicated by the disclosure of a thorough investigation revealing the reason for lack of disciplinary action.” Moreover, “[i]f unsubstantiated claims warranted greater protection in some cases, perverse incentives exist for public agencies to unsubstantiate claims to avoid public scrutiny.” The Opinion is now subject to appeal.
Former employee Whistleblower claim dismissed: The Franklin Circuit Court dismissed by order entered July 31, 2024, the claims of a former employee who attempted to claim whistleblower status but failed to meet the criteria to be “a whistleblower”. Her claims for thousands of hours of vacation time and comp time were also rejected and the entire case dismissed. See Terri Bradshaw v. Capital Community Economic/Industrial Development Authority d/b/a Kentucky Capital Development Corporation (KDCD), Case 24-CI-00151.
Presence of HEPS: The Franklin Circuit Court has overturned two 2018 rulings of positive drug tests against trainer Steve Asmussen. The Court in its July 3, 2024 Opinion and Order in Asmussen, et al. v. The Kentucky Horse Racing Commission, Case 23-CI-169, held that among other things the presence of HEPS is not conclusive evidence of an Ace violation and such finding by the Kentucky Racing Commission is sheer speculation. The KHRC further violated state statutes by elevating an internal 2013 policy decision to the level of mandatory compliance. The Court granted Asmussen Summary Judgment and reversed the KHRC’s final order and the penalties it imposed.
2021 Derby case: MGM represented Thoroughbred trainer Bob Baffert in Mattera, et al. v. Baffert, et al., No. 23-5750, a lawsuit initiated by a disappointed bettor in the 2021 Kentucky Derby. On May 2, 2024, the United States Court of Appeals for the Sixth Circuit upheld the District Court’s dismissal of that lawsuit, holding that, “[a]fter the order [of finish] is marked official, neither the stewards nor the courts can turn a losing wager into a winning one.” The decision confirms that the “rule of finality” adopted by the Kentucky Horse Racing Commission does not permit post-race disqualifications to alter the outcome of a race for pari-mutuel wagering purposes.
Newest Employment case: In the January 19, 2024 Opinion affirming in Gibson v Anderson Properties, LLC, 2023-CA-0090, the Court of Appeals affirmed the dismissal of Gibson’s claims of discrimination and retaliation because he failed to make a prima facia showing, and held that promissory estoppel does not preserve the breach of contract claim.
Keeneland Repository and Civil Rule 11 Sanctions:
MGM represented Dr. Robert J. Hunt, DVM, in an attempted class action filed against him concerning X-rays taken by Dr. Hunt and others for Keeneland’s Sale Repository. The sole “lead” plaintiff pled that he had reviewed and relied on the X-rays in the depository when purchasing horses at the Keeneland Sales, but later admitted under oath that he had never reviewed such an X-ray or asked a veterinarian to review an X-ray on his behalf prior to a purchase. The Lexington Herald Leader reported in its February 14, 2022, article on the initial ruling of the Fayette Circuit Court in favor of Hunt and others, and the Kentucky Court of Appeals in its published Opinion Affirming rendered on February 11, 2022 in Swearingen, et al., v. Hagyard Davidson McGee Associates, PLLC, et al., 2020-CA-0456-MR. After the dismissal of the claims, the wrongfully sued veterinarians (Hunt and others) and their practice sought sanctions against the attorneys who represented the plaintiff. In the Fayette Circuit Court’s Opinion and Order entered on December 1, 2022, finding violations of Civil Rule 11, the Court sanctioned the plaintiff’s attorneys for perpetuating the litigation even after it became clear that those statements were unfounded. The Court held that the attorneys representing the Plaintiff Tom Swearingen “violated CR 11 by prosecuting this case despite the clear evidence that there was no reasonable basis to believe the allegations contained in the Complaint were grounded in fact and law.” Opinion, p. 1. See Swearingen v. Hagyard-Davidson-McGee Associated, PLLC, et al., Fayette Circuit Court, Action 19-CI-00462. The Herald Leader published on December 7, 2022, an article following the Circuit Court’s recent order. The Fayette Circuit Court in its an Opinion and Order entered December 19, 2022, awarded monetary sanctions in favor of Hunt and others in the amount of $146,883.40.
Business valuation and good faith and fair dealing:
MGM represented the owner of a minority interest in a transportation brokerage company who, after years of service, was forced out by the majority owner. After the majority owner refused to purchase our client’s interest for the fair value amount required by the company’s Operating Agreement, MGM filed suit on his behalf. In Schomp and Quality Logistics, LLC v. William O Holton, et al., 2021-CA-0511 and 0557, Fayette Circuit Court, 18-CI-04270), an opinion rendered October 14, 2022 arising from appeals from the Fayette Circuit Court decisions and judgment entered for our client in the amount of $1,804,878 – more than one million dollars more than the amount tendered by the majority owner prior to suit, the Circuit Court was affirmed. The defendants had appealed the Circuit Court’s award of prejudgment interest. On October 14, 2022, the Court of Appeals panel unanimously affirmed that award, finding that the defendants’ reliance on a deeply flawed appraisal to support its initial tender of “fair value” breached the covenant of good faith and fair dealing.
Kentucky Supreme Court speaks to enforcing arbitration agreements:
The Kentucky Supreme Court has made clear that Kentucky favors arbitration agreements in its Opinion rendered September 22, 2022, in Curtis Green and Clay Green, Inc. D/B/A Green’s Toyota of Lexington et al. v Phillip Frazier, 2021-SC-0293-DG. The court said that “parties who enter enforceable arbitration agreements are required to submit their disputes to binding arbitration….”
Open Records – another win for the Lexington Herald-Leader:
In what may or may not be the final chapter in the four-year effort of the Lexington Herald-Leader to require the Kentucky Legislative Research Commission (“the LRC”), a “support” agency attached to the General Assembly, to comply with the Kentucky Open Records Act, in McClatchy Company, LLC v. Jay Hartz, in his official capacity as Director of Kentucky Legislative Research Commission, case no. 18-CI-00512, the Franklin Circuit Court ordered the LRC to pay the Herald-Leader’s attorneys fees and costs incurred in its latest appeal, which the Court characterized as “based almost exclusively on argument that had already been rejected by the Court of Appeals and Supreme Court in this very case.” (Emphasis in original). The Court also exercised its discretion to award a statutory penalty in the amount of $25 per day from the Court’s Order requiring the LRC to produce the requested documents and during the pendency of the LRC’s third trip through the appellate Courts. Miller, Griffin, and Marks is pleased to represent the Lexington Herald-Leader (and others) in furthering and protecting the important public policies embodied in the Open Records Act.
Quantum Meruit, Unjust Enrichment and Parol Evidence: MGM was successful in reversing erroneous trial court rulings on quantum meruit, unjust enrichment and parol evidence arising from a business relationship. The Kentucky Court of Appeals rendered its “to be published” Opinion Reversing and Remanding on April 22, 2022, in case 2020-CA-1574, Earley M. Johnson, III v. Kentucky Enterprises, LLC, filed in the Bourbon Circuit Court, case 15-CI-00065.
EQUINE: MGM represented the prominent and well respected equine surgeon, Dr. Robert Hunt, and successfully pursued dismissal of the claims asserted against him in the Fayette Circuit Court. The claims were dismissed by the Fayette Circuit Court and that ruling has now been affirmed by the Kentucky Court of Appeals in the February 11, 2022, published decision of Swearingen v Hagyard Davidson McGee Associates, LLC, 2020-CA-00456, Fayette Circuit Court 19-CI-462. The plaintiff admitted he did not know Dr. Hunt and had no personal cause of action against him in a sworn deposition taken, in part, by MGM. Attorneys’ fee and cost recovery from the plaintiff and his attorney may be the next step. The Opinion was featured in an article in the Lexington Herald Leader on February 15, 2022.
Open Records and attorneys’ fee recovery: The Kentucky Court of Appeals in Hartz v. McClatchy Company, 2021-CA-0634-MR, rendered February 4, 2022, has once again confirmed that the Legislative Research Commission (“LRC”) was required to disclose to the Lexington Herald-Leader documents concerning an investigation into a sexual harassment accusation against Representative Jim Stewart, III, and also affirmed the Franklin Circuit Court’s decision to award attorney’s fees to the Herald-Leader. This was the third attempt by the LRC to argue to the appellate Court that it should not be required to comply with the Open Records Act. Miller, Griffin & Marks is proud to represent the Herald-Leader in its ongoing effort to ensure that the Open Records Act is enforced and that the important public policy of government transparency underlying that Act is furthered.
Open Records update: UK pays MGM its legal fees again for violation of a client’s rights under the Open Records Act. See the August 26, 2021 Editorial Board comments in “Game over: UK can no longer hide behind its lawsuit” and the “Details of the James Harwood investigation and record battle.”
False Claims Act flashback: Brooks v. Pineville Community Hospital (1992).
Arbitration: The frustration continues with enforcing arbitration agreements. In a 2-1 opinion from the Court of Appeals in Green’s Toyota v Frazier, 2020-CA-0781-MR (July 9, 2021), the court affirmed the circuit court’s ruling holding that the arbitration agreement is substantively unconscionable because it limited the parties’ rights to recover consequential and punitive damages. The majority therefore holds the entire arbitration agreement is unenforceable. The dissenting opinion makes clear that the challenge to the entire arbitration agreement falls under the second class of issues referenced in Genesis Healthcare, LLC v. Stevens, 544 W.S.3d 645 (Ky. App. 2017). As such, “it is for the arbitrator to determine whether the provision is unconscionable and, if so, whether the provision is severable or renders the entire arbitration agreement invalid.
By order entered October 20, 2021, the Kentucky Supreme Court granted discretionary review of this case, Curtis Green, et al v. Phillip Frazier, 2021-SC-0293-D. Briefing is on-going and it is anticipated that oral arguments and/or a ruling may be forthcoming by summer 2022.
The saga of Boone Creek continues: In an unusually lengthy opinion for the Court of Appeals, the Court used 59 pages to affirm the Fayette Circuit Court that the federal regulations for the procedure to include property on the National Register violate due process as they are arbitrary and capricious. The Opinion, Clark County-Winchester Heritage Commission and Harry Enoch v. Thomas Norton, et al. 2017-CA-1172-MR (and several related appeals), rendered June 4, 2021, follows the 2013 ruling from the Court of Appeals in favor of Plaintiffs which is referred to as Norton I. Plaintiffs federal action filed in 2017 seeking the de-listing of their property from the National Register based upon these constitutionally faulty federal regulations remains pending.
Evictions: A Petition for Writ, styled 40 Acres and the Mule, LLC, et al. v. Judge Lindsay Hughes Thurston, et al., case no. 2021-SC-0153 was filed on May 7, 2021, with the Kentucky Supreme Court to challenge the continuing “moratorium” on evictions based on non-payment of rent set out in the Court’s Administrative Amended Order 2021-007. Because the federal courts in the 6th Circuit (and other circuits) have held the CDC’s “Halt Order” void, and the District of Columbia vacated the CDC’s Halt Order, the Petition challenges the Kentucky Supreme Court’s reliance on it. Respondent filed a motion to dismiss arguing procedural grounds and Petitioners have filed a response to the motion.
Open Records Requests Updates/Summary:
The Attorney General on May 27, 2021 again determined that the University of Kentucky violated the Open Records Act and “subverted the intent of the [Open Records] Act when it unreasonably delayed access to the record” in 21-ORD-099, In re: Jackson Bell/University of Kentucky.
In an April 29, 2021, Opinion concluding a nearly three-year fight by the Lexington Herald-Leader to obtain records of a sexual harassment complaint made against Representative Jim Stewart, III, from the Legislative Research Commission (“LRC”), the Franklin Circuit Court In McClatchy v Hartz, 18-CI-512, awarded attorneys’ fees to the Herald-Leader. The Order followed the Court of Appeals’ rejection of the LRC’s argument that it was entitled to legislative immunity from judicial review of its handling of the request, and the Kentucky Supreme Court’s rejection to the LRC’s challenge to the Circuit Court’s jurisdiction to hear the case.
Miller, Griffin & Marks, P.S.C., is proud of its long history of representing Kentucky news organizations in protecting the public’s vital interest in government transparency, which is embodied in Kentucky’s Open Records Acts, KRS 61.871, et seq. The Act is based on the principle that “free and open examination of public records is in the public interest,” KRS 61.871, or, in the words of United States Supreme Court Associate Justice (and Kentucky native) Louis Brandeis, “sunshine is the best disinfectant”. Although the Act includes certain enumerated exceptions to public agencies’ obligation to disclose public records, those exceptions are to be narrowly construed. In cases where the agency’s refusal to comply with the Act is willful, a litigant may be entitled to recover attorney’s fees, costs, and a statutory per diem penalty.
The firm’s experience in Open Records matters includes its representation of the Lexington Herald-Leader against the Kentucky Legislative Research Commission (“LRC”), following the LRC’s refusal to disclose records concerning a staff member’s sexual harassment complaint against Kentucky Representative Jim Stewart, III. The Herald-Leader prevailed at every level of appellate review, including confirmation by the Kentucky Supreme Court that, contrary to the LRC’s insistence, the Franklin Circuit Court had jurisdiction to consider whether the LRC violated the Act. Harilson v. Shepherd and Lexington Herald-Leader, 2019-SC-000156-MR. Thereafter, the Kentucky Court of Appeals rejected the LRC’s argument that it was entitled to legislative immunity from judicial review of its handling of the Herald-Leader’s records request. Harilson, et al. v. Lexington H-L Services, Inc., D/B/A Lexington Herald-Leader, 2018-CA-1857-MR. Upon remand, the Franklin Circuit Court awarded the Herald-Leader its attorney’s fees, finding that the LRC had indeed acted erroneously. LINK. Unfortunately, this case appears to have resulted in an amendment to the relevant statute, KRS 7.119, purporting to remove the right to any judicial review from the LRC’s decision to deny an Open Records Act request. 2021 Kentucky Laws Ch. 160 (HB 312).
In another action representing the Herald-Leader, Miller, Griffin & Marks obtained an order from the Kentucky Court of Appeals requiring the University of Kentucky to turn over information responsive to an Open Records request for documents explaining why the University repaid $4 million to the federal government in connection with services rendered at a cardiology clinic that it acquired in Hazard. While the University initially insisted that only nine pages of documents were appropriate for disclosure, the Herald-Leader’s challenge led to the University ultimately turning over at least 15,000 pages. The Kentucky Supreme Court declined to hear the University’s request that it review the Court of Appeals’ decision. On remand, the Fayette Circuit Court awarded the Herald-Leader a portion of its attorneys’ fees and costs, finding the University’s refusal to produce the documents following the Kentucky Court of Appeals’ Opinion and Order to be in bad faith and wilful. Order on June 12, 2020.
The firm also represented the Kentucky Kernel, the University of Kentucky’s student-run newspaper, in its fight to obtain documents concerning the manner in which the University investigated allegations of sexual harassment against a professor and employee of the University. Following a victory at the Court of Appeals, the Kentucky Supreme Court entered a unanimous Opinion and Order confirming that “the University is not authorized to decide what public records must be disclosed and what records can lawfully be withheld.” to-be-published opinion. The Kentucky Kernel reported on the victory on March 25, 2021. http://www.kykernel.com/news/kentucky-supreme-court-rules-in-favor-of-kernel-in-lawsuit-from-uk/article_b22d981a-8d75-11eb-9020-4fdb2845e80e.html
Workers Comp. In a unanimous opinion rendered April 29, 2021, in Brownwood Property, LLC v. Sheena Thornton, et al., 2020-SC-0167-WC (2019-CA-1376 and WC-18-92452), the Supreme Court adopted MGM’s argument that an employee of Brownwood Property, LLC, a horse farm, was excluded from Workers Compensation coverage because her duties were incident to or in conjunction with Brownwood’s farming operation. As a result, she was a person employed in agriculture within the meaning of KRS 342.650(5) and KRS 342.0011(18). She spent her days mowing along fence lines and cleaning houses and barns. The Commission and Court of Appeals had concluded her duties were non-farm related and the Supreme Court reversed those rulings. This is a victory for farm owners throughout Kentucky.
KRS 100.3471 ruled unconstitutional by Jessamine Circuit Court. In an order entered April 2, 2021, in Boone Development, et al. v. Nicholasville Board of Adjustment, et al., case 20-CI-494, the circuit court held unconstitutional the bond requirement found in KRS 100.3471 which applies to appeals of final decisions of the circuit court of legal challenges arising under the Chapter (which deals with planning and zoning and land use matters). The Court determined that the statute violates the doctrine of separation of powers established by Sections 27 and 28 of the Kentucky Constitution, violates Section 115 of the Kentucky Constitution by imposing what constitutes a penalty on the right to a first appeal regardless of whether an appellant is indigent or not, and violates the right to equal protection under the law guaranteed by Section 3 of the Kentucky Constitution. Further, the Court found that the statute is arbitrary and irrational under the rational basis standard of review.
NEWEST OPEN RECORDS CASE: In University of Kentucky v. The Kernal Press, 2019-SC-0468-DG (March 25, 2021), the Kentucky Supreme Court ruled in favor of the The Kentucky Kernal, affirming the decision of the Court of Appeals which held that the University of Kentucky failed to comply with its statutory obligations under the Open Records Act. The to-be-published opinion addressed the records sought and that the University withheld regarding sexual assault of female graduate students by a tenured professor. The Court held that “the University is not authorized to decide what public records must be disclosed and what records can lawfully be withheld.”
OPEN RECORDS MATTER UPDATE: In McClatchy Company, LLC v. Hartz, et al., case 18-CI-00512 in the Franklin Circuit Court, Miller, Griffin & Marks represents the Lexington-Herald Leader against the Kentucky Legislative Research Commission (“LRC”) in an action arising from the LRC’s failure to comply with the Kentucky Open Records Act by producing (in redacted form) documents pertaining to the harassment of an LRC staff member by an elected member of the General Assembly. On December 7, 2020, the Franklin Circuit Court entered an Opinion and Order granting the Herald-Leader’s motion for summary judgment and rejecting the LRC’s constitutional and statutory arguments as to why it should not be required to comply with the Act.
MGM also represents the Lexington Herald-Leader in the Open Records Act dispute with the University of Kentucky concerning documents related to an audit and investigation of billing errors at a medical clinic formerly associated with the University. After four years of litigation, the Fayette Circuit Court, Division 4, in case no. 16-CI-3065, entered an Order on June 12, 2020, that partially granted the Herald-Leader’s request for attorney’s fees and costs, finding the University’s failure to produce requested documents following the Kentucky Court of Appeals’ finding of an Open Records Act violation to be in bad faith and willful.
UNEMPLOYMENT BENEFITS/DISQUALIFICATION/DISHONESTY: The Kentucky Unemployment Insurance Commission (“UIC”) ruled in favor of the employer, Tree Top Landscaping, Inc. dba Vescio Sportsfield, to disqualify a former employee from receiving unemployment benefits based on the employee’s dishonesty. The UIC order reversing was entered on May 29, 2020.
STATUE OF LIMITATIONS/PROPER PARTY: In Leger v Elkins, the Court of Appeals addressed in a May 15, 2020 Opinion the statute of limitations issue caused by plaintiff naming the wrong defendant.
LANDLORD/TENANT – In an odd effort by a tenant to create a “federal case” out of a dispute with the landlord, the US District Court granted summary judgment to the landlord. In a Memorandum Opinion and Order entered March 11, 2020 in Hibbett Sporting Goods, Inc. v. ML Georgetown Paris, LLC, 18-524-DCR, Judge Reeves dismissed the tenant’s case and claim for declaratory judgment as moot and denied the tenant’s claim for anticipatory breach of the commercial lease.
OPEN RECORDS MATTERS:
MARCH 3, 2020: LEXINGTON HERALD LEADER ARTICLE – Hazard heart clinic ended up costing UK more than $7.4 million
FEBRUARY 20, 2020: LEXINGTON HERALD LEADER – UK. Miller, Griffin & Marks, PSC represents the Lexington Herald-Leader in its Open Records Act claim against the University of Kentucky to obtain documents that explain why UK reimbursed the federal government $4.1 million for amounts charged to Medicare and Medicaid by a UK cardiology clinic. When ordered to turn over documents related to the audit that led to the reimbursement, UK initially provided only nine pages. After four years, UK has finally produced over 15,000 pages of records to the Herald-Leader. See the Lexington Herald Leader Opinion article February 20, 2020.
KENTUCKY KERNAL – Miller, Griffin & Marks also represents UK’s student-led newspaper, the Kentucky Kernel, in its Open Records Act claim against UK to obtain documents concerning UK’s decision to allow a professor accused of sexually harassing his students to resign.
The Kentucky Court of Appeals rendered an opinion on May 17, 2019, in which Miller, Griffin & Marks represented The Kentucky Kernel regarding its Open Records Request to the University of Kentucky regarding the manner in which the University had investigated students’ allegations of sexual harassment against a professor. In The Kernal Press, Inc. d/b/a The Kentucky Kernal v. University of Kentucky, et al., 2017-CA-394, the Court of Appeals held that the Family Educational Rights and Privacy Act (“FERPA”) did not exempt the requested documents from disclosure,and that the University had not “made any attempt to comply with the Open Records Act in any meaningful way.”
LEXINGTON HERALD LEADER –LRC. Miller, Griffin & Marks represented the Lexington Herald-Leader against the Legislative Research Commission’s (“LRC”) refusal to disclose records concerning a sexual harassment complaint made against Kentucky Representative Jim Stewart, III. In an opinion rendered September 26, 2019, the Supreme Court denied the relief sought by the LRC, a writ from the Court of Appeals that would prohibit the Franklin Circuit Court from hearing the Herald-Leader’s claim. The Supreme Court held that the Franklin Circuit Court does have jurisdiction to consider whether the LRC violated the Act. See the Opinion of the Court by Justice Hughes in Harilson v. Shepherd and Lexington Herald-Leader, 2019-SC-000156-MR.
Thereafter, in a unanimous and to-be-published decision rendered November 22, 2019, Harilson, et al. v. Lexington H-L Services, Inc., D/B/A Lexington Herald-Leader, 2018-CA-1857-MR, 2019 WL 6222913, the Kentucky Court of Appeals rejected the Commission’s argument that it was entitled to legislative immunity from any judicial review as to its handling of the Herald-Leader’s records request.
FEBRUARY 20, 2020: SWEARINGEN v. HUNT. Miller, Griffin & Marks, PSC, represents Dr. Robert Hunt, one of several veterinarians sued by Tom Swearingen, who claimed to have relied on allegedly misdated x-rays in the Keeneland Repository when purchasing horses at Keeneland sales. Mr. Swearingen testifed at his recent deposition that never relied on a digital x-ray in the Repository when purchasing a horse and had never asked a veterinarian to review such an x-ray on his behalf during the years in question, and that he could not identify any damages that he incurred as a result of any allegedly misdated x-rays. As a result, Dr. Hunt moved to dismiss the Complaint against him and asked the Court for leave to assert counterclaims against Mr. Swearingen for abuse of process and malicious prosecution. A copy of the Lexington Herald Leader article, February 20, 2020.
FIDUCIARY DUTIES OF ATTORNEY AND INDEMNIFICATION – In R&J Oil v. R.C. Rodgers, et al., 18-CV-00117-GNS-CHL, the US District Court at Louisville ruled in favor of the clients of Miller, Griffin & Marks in the Memorandum Opinion and Order entered January 13, 2020. The Court held that an attorney acting as an escrow agent owes a duty to strictly comply with the escrow agreement in carrying out his or her obligations. The attorney also owes a fiduciary duty to the parties to the transaction to carry out the terms of the escrow agreement, and his failure to do so is not excused by placing the blame on his or her staff. Finally, the Court rejected the attorney’s argument that an indemnification provision in the escrow agreement required the plaintiffs to indemnify him for the damage that he caused through his own breach of that agreement.
FRANKLIN COUNTY SCHOOLS SUPERINTENDENT – Miller, Griffin & Marks represented Mark Kopp as he was cleared of claims that he “violated state statute.” See Lexington Herald-Leader article published November 22, 2019.
Landlord/Tenant matter – In Blue Stallion Brewing, LLC v Ericka Strecker update, the Kentucky Supreme Court denied the request for discretionary review by Strecker in its order entered August 23, 2019. As a result, the opinion of the Kentucky Court of Appeal is the law of the case. See below for the Court of Appeals opinion.
ARBITRATION – The US District Court at London has upheld an arbitration provision (ADR forum choice) in a franchise agreement. Issues included whether the Federal Arbitration Act (“FAA”) or the Ky Uniform Arbitration Act (“KUAA”) applies, and whether the requirement for the KY franchisee to arbitrate its KY dispute in California (not Kentucky) was enforceable. The July 11, 2019 Opinion and Order in CK Franchising, Inc. v. SAS Services, Inc., 18-CV-94-REW-HAI holds that the FAA applies and the KY Franchisee must arbitrate its dispute in California.
ANDOVER GOLF COURSE – In what appears to be the door-closing ruling on the Andover Golf Course matters, the Court of Appeals rendered an opinion in Ball Homes, Inc., et al. v. Andover Golf and Country Club, Inc., et al., 2017-CA-885, on July 3, 2019, which makes it 3-for-3 for the Court of Appeals on its ability to never get to the merits of the issues in this dispute. In this July 3, 2019 Opinion dismissing, the Court dismissed the pending appeal initiated by the developers arising from the foreclosure proceeding and the criticisms that the foreclosure process failed to comply with the basic rules applicable to a master commissioner’s sale of real property. The Court did not get to the merits and ruled that because of a subsequent ruling (after the appeal was initiated) of the trial court that the developers had no standing in the underlying case ( see Circuit court Opinion, September 22, 2017, holding the developers have “no standing to enforce the purported express restrictive covenant,”… ” no legitimate interest in seeking the enforcement of the express restrictive covenant, nor do they have a legal duty or obligation to do so…”), they likewise have no standing to challenge the sale itself and therefore the appeal was dismissed.
In an ironic twist confirming its misunderstanding of the overall situation, the Court of Appeals footnotes on page 11 that the “Association has intervened in the related action to assert its right to enforce the restrictive covenants.” Oh, if the Court of Appeals only knew the actual position taken by the Association(s).
The Court of Appeals has previously dismissed as moot both CR 65.07 motions, one of which was filed by Whitaker Bank to challenge the underlying Injunction granted by the trial court that required the golf course property to remain as a golf course, and the other challenge by the developers to contest the $1 Million Dollar bond set by the trial court. Both CR65.07 motions were dismissed by the Court of Appeals as moot, again citing a subsequent order by the trial court, so the Court of Appeals never addressed the merits of the issues arising from this massive case. See cases 2017-CA-1038-I and 2017-CA-1047-I.
Contract dispute – The United States Court of Appeals for the Sixth Circuit issued an Opinion on February 21, 2019, in Cameo v. ITW Deltar IPAC, case no. 17-5732, vacating the trial court’s verdict and remanding the case for further proceedings. The Opinion sides with Cameo on all issues presented in its appeal as the Court not only agreed with Cameo on its argument that the trial court erred on shifting the burden of proof to Cameo, but also ruled against ITW’s cross-appeal and held that, on retrial, the jury will have to decide whether the liquidated damages clause in the contract between the parties limits liability for ITW.
Landlord/Tenant matter – In Blue Stallion Brewing, LLC v Ericka Strecker, the Court of Appeals held in a December 21, 2018, Opinion Reversing and Remanding that a provision in a commercial lease (related to additional parking) was “an agreement to agree” which was not enforceable. The Court reversed the trial court and remanded the case to the Fayette Circuit Court (case # 14-CI-0005) to follow the directive to dismiss the counterclaim of the landlord for damages and to return the money the tenant had paid under the previous, erroneous ruling of the trial court.
Short-term rental restriction – The Supreme Court rendered an Opinion on November 15, 2018, in Gadd v. Hensley (2017-SC-189-DG and 2017-SC-431-DG) that involved cross-appeals that holds short-term rental of residential property is commercial use and violates the deed restrictions for the property and is therefore prohibited. Without defining “short-term” the court may have opened the door to an easy attack and prohibition on AirBnB rentals in Kentucky.
Parking lot trespass – The newest update in the John’s Run Shop matter (Behr et al v. Ashland Avenue Properties, LLC et al, Fayette Circuit Court case no. 17-CI-2156) and the trespassing business neighbors is another ruling in favor of John’s. The Fayette Circuit Court ruled as a matter of law that the Behr Properties plaintiffs cannot claim some form of prescriptive easement or right of way through John’s parking lot. See Judge Goodwine’s September 26, 2018 Opinion and Order.
Arbitration/Employment – The Kentucky Supreme Court rendered a published opinion on September 27, 2018, in Grimes v. GHSW Enterprises, LLC (dba Strong Auto) that addresses arbitration provisions covering an employment agreement holding that the mutuality requirement does not have to be written verbatim in the document to be understood to exist.
Open records – The Herald-Leader obtained an Opinion from the Kentucky Court of Appeals On September 14, 2018, affirming the Fayette Circuit Court’s conclusion that the University of Kentucky was required under the Kentucky Open Records Act to disclose certain audit records regarding a heart clinic that the University had acquired. The Court held that the records were not protected from disclosure by any of the exceptions to the Open Records Act, or by the University’s assertions of attorney-client privilege or work product protection.
Qui Tam Settlement. Miller, Griffin and Marks successfully represented the qui tam relator who brought whistleblower claims against a corporate nursing home chain and its affiliated management companies for False Claims Act Violations related to providing worthless services and illegally up-coding reimbursable services. The Department of Justice investigated the claims and ultimately settled with the corporate defendants. The relator received an 18% share of the settlement and the defendants agreed to pay her attorneys’ fees and costs. Miller, Griffin and Marks has successfully represented many plaintiffs in nursing home cases and cases involving medical providers submitting false claims for reimbursement to the federal government. For specific information see the June 2018 press release: https://www.justice.gov/usao-edky/press-release/file/1076766/download
Tom Miller was a presenter for the Kentucky Bar Association Annual Convention in Lexington in June 2018 for “The NCAA and Representing Student Athletes.”
Business sale/toxicology lab – The Fayette Circuit Court on May 22, 2018, entered an Order Appointing Custodian/Monitor in the matter of Solar Holdings Group, LLC et al. v. Curare Laboratory, LLC, Junior Johnson, et al. The order follows extensive evidentiary hearings and allegations of breaches of fiduciary duties and diversion of company funds and assets. Thereafter, on June 30, 2018, the court entered an order returning possession, custody and control of Bluewater Toxicology, LLC and its lab and assets to Solar and Bolus as its sole remaining Board Member.
Landlord/tenant – In Wildcat Property Management, LLC v Reuss, et al., the Court of Appeals in an Opinion rendered May 18, 2018, let stand (by affirming in part and reversing in part) the conclusions of the trial court in a landlord/tenant dispute, thus bringing to a close a 13 year litigation saga. The opinion touches on future rent post eviction arising from a residential lease, and claims by the landlord for interest, attorneys’ fees, late fees and utility expenses. Wildcat has filed a motion for discretionary review with the Kentucky Supreme Court.
Property rights – The US District Court, Eastern District of Kentucky, issued a Memorandum Opinion and Order on March 15, 2018, in the case of Norton v. Paul Loether, Keeper of the National Historic Register of Historic Places, case 17-351-DCR, that continues the ten year legal efforts of property owners to challenge the National Park Service (and Commonwealth of Kentucky, State Historic Preservation Office) over its arbitrary and capricious agency regulations for listing property on the National Historic Registry. This Opinion is another significant forward step for the property owners after several years of favorable rulings from the Kentucky state courts.
In Commonwealth v. Ronald Exantus, Woodford Circuit Court, case 15-CR-00090, Special Judge Phil Patton issued an Amended Order Regarding Media Coverage on March 2, 2018, at the request of Intervening Plaintiff, Lexington H-L Services, Inc., d/b/a Lexington Herald-Leader, which allows for and clarifies the media coverage for the trial being conducted in the Fayette Circuit Court building.
On February 13, 2018, a prominent and successful Arabian horse trainer defeated allegations he wrongly shanked a horse under his control at a show. Charges were filed with the United States Equestrian Federation against Michael Byatt by an official at the 2016 Arabian National Championship horse show, alleging he improperly shanked a horse just prior to taking him into the show ring. After a lengthy hearing, the Hearing Panel unanimously concluded there had been no wrongdoing and dismissed all charges. Mr. Byatt shows horses all over the world and has a national and international reputation as an outstanding horseman and a proponent of the humane treatment of horses. We were very pleased to have assisted Mr. Byatt in obtaining this just resolution. Read the February 13, 2018, Findings and Decision.
Review various pleadings and documents from the Andover Golf Course litigation, including Ball Homes, Inc and Lochmere Development Corporation v. Whitaker Bank and related cases. Click here.
NEW: The Court of Appeals entered an order on February 23, 2018 which dismisses as moot both CR 65.07 Motions filed by Whitaker (to challenge the temporary injunction) and Ball/Lochmere (to challenge the $1 Million bond amount). The Court held that because the trial court dismissed “the claims underlying the temporary injunction” by order on October 17, 2017, the motions are moot. See the Order dismissing.
The Court of Appeals relies upon an October 17, 2018, order, though that order does not appear to address anything related to what the Court of Appeals relies upon for its ruling and dismissal of the CR 65.07 motions. Possibly, the court was referring to an October 18, 2018 Judgment, a copy of which is attached, which dismisses Ball/Lochmere as not having standing. For a complete understanding of the basis for the Judgment dismissing the developers as not having standing, one must read the trial court’s September 22, 2017, Findings of Fact and Conclusions of Law which addresses the standing of Ball/Lochmere and holds that they do not have the a legitimate interest in seeking enforcement of the express restriction nor do they have a legal duty or obligation to do so, and therefore they do not have standing to enforce the purported express restrictive covenant.
On February 14, 2018, at 9:00 a.m., the Fayette Circuit Court, 3rd Division, held a lengthy hearing during which he ruled from the Bench on the pending cross motions asking for the court to rule on whether the golf course restriction is valid and enforceable. The court held that there is an “implied servitude” on the golf course property including on all parties in the controversy, to maintain the golf course property as a golf course, or such other definition decided by the HOA’s, the bank, AGCC (current title owner) and the homeowners. The Court declined at this time to further ‘define’ this modification (or lessening) of the restriction. Thus, the Court sustained the pending motion of the HOA’s and denied the motion of Whitaker Bank. It is a non-final, non-appealable order because it is interlocutory. The Court noted the frustration of all parties and property owners from the failure of the Court of Appeals to timely address the CR 65.07 motions related to the Temporary Injunction issues in June 2017, and the associated $1 Million Dollar bond required by the Court to be posted before the injunction is triggered.
The order from the February 14, 2018, hearing, finding the implied servitude on the real property, was entered on February 16, 2018. It is interesting in that the written order (prepared by counsel still involved in the case) appears to be somewhat different than the Court’s verbal ruling from the Bench.
At the hearing the Court verbally addressed the newest twist presented by numerous HOA’s (but not the estates section HOA) requesting the Court enter an order that authorizes the HOA’s to make capital calls of all property owners to raise money to buy the golf course property from Whitaker, and further for the Court to approve future monthly assessments to maintain the property as merely “green space” — not to be operated as a golf course. The Court did not directly rule on the issue but stated for the benefit of the property owners present for the hearing that Kentucky law does allow HOA’s to assess its members.
PREVIOUSLY: On December 13, 2017, the Fayette Circuit Court was to address the motion for summary judgment filed by Whitaker Bank which attempts to eliminate the obligation for the property to be used as a golf course, and cross motions for summary judgment filed by various HOA’s and various property owners. The Estates section HOA brought in new counsel (Rich Getty) and several property owners were represented by Eric Case. It is anticipated that they will support the property remaining a golf course though there are several HOA’s (represented by Nathan Billings) that have been seeking to eliminate the obligation for the property to be used as a golf course. That hearing was continued by the court based upon Whitaker and the HOAs agreeing to participate in a mediation on January 4. (The Circuit Court had previously dismissed Ball and Lochmere from the cases based on lack of standing). The mediation was conducted but was unsuccessful. That resulted in return to court January 25, 2018, for determination on the legal issues. That hearing was fairly lengthy with well over a hundred property owners in attendance. The court gave great consideration to the matters before it, expressed some concerns that we have not yet received rulings from the Court of Appeals on the dueling cross motions (under CR 65.07) related to the temporary injunction and the amount of the injunction bond from last summer, and the appeal filed in May by Ball and Lochmere to the underlying foreclosure ruling in favor of Whitaker and sale of the proeprty from April 2017. As a result, the court continued the hearings to February 13, 2018, and indicated that he would rule from the Bench on issues at that time.
BEHR PROPERTIES, LLC, THE BEER TRAPPE, INC. AND BEHR ENTERPRISES, LLC V. ASHLAND PROPERTIES, ET AL., 2017-CA-1155, September 20, 2017. The Court of Appeals denied Behr’s request to dissolve the injunction entered in favor of Ashland Properties and other defendants by Judge Goodwine in the Fayette Circuit Court. The injunction prohibits Behr and the other plaintiffs from trespassing on the defendants’ property. See the Court of Appeals Order Denying Motion for Interlocutory Relief; and see the Fayette Circuit Court’s June 27, 2017, Temporary Injunction.
Don Pisacano was successful at the Kentucky Supreme Court in a case involving application of an insurance policy provision to the collapse of a structure caused by termite damage. Read the Thiele v. Kentucky Growers Insurance, 2015-SC-158, June 15, 2017, Opinion.