Recent Firm Highlights & News
OPEN RECORDS MATTERS: MGM represents the Lexington Herald-Leader in an ongoing 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.