RENDERED: MAY 14, 2021; 10:00 A.M.

NOT TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2020-CA-0747-MR

KY MOTEL, INC. APPELLANT 

v. 

APPEAL FROM MCCRACKEN CIRCUIT COURT

HONORABLE WILLIAM A. KITCHEN, III, JUDGE

ACTION NO. 19-CI-00398 

KENTUCKY OAKS MALL 

COMPANY, LTD; BANTERRA 

CORP. D/B/A BANTERRA BANK; 

CITY OF PADUCAH, KENTUCKY 

C/O THE HONORABLE BRANDI 

HARLESS, MAYOR; HON. SAM 

CLYMER, MCCRACKEN COUNTY 

ATTORNEY; AND VIDHI LLC APPELLEES 

OPINION

AFFIRMING

**   **  **

BEFORE: COMBS, LAMBERT, AND MCNEILL, JUDGES.

COMBS, JUDGE: This case arose from a lien foreclosure action. Ky. Motel, Inc. 

(KMI), an Illinois Corporation, appeals from the summary judgment and order of 

sale of the McCracken Circuit Court entered on January 28, 2020, as amended on
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May 5, 2020. The judgment provided that KMI was indebted to Kentucky Oaks 

Mall Company, LTD. (“Kentucky Oaks”), by virtue of an affirmative covenant 

included in the deed of conveyance from Kentucky Oaks to KMI’s predecessor in 

title and that Kentucky Oaks was entitled to foreclose its lien. KMI argues that the 

court erred by failing to conclude: that the covenant should be cancelled due to a 

change in circumstances; that the covenant could not be enforced because 

Kentucky Oaks breached its duty to provide maintenance to common areas; and 

that a previous judgment concerning covenants contained in the deed was not res 

judicata. After our review, we affirm.

KMI acquired approximately 5.4 acres of real property bounded by 

US 60 and an off-ramp of Interstate 24 in Paducah by a deed of conveyance made 

on June 1, 2004. The property had been developed as a motel site in 1984, and 

KMI continued to operate the motel after acquiring the property some twenty years 

later. 

The property was conveyed subject to numerous restrictive covenants,

including those: limiting use of the property to a motel; governing the appearance 

of exterior signage; preventing the construction of fences or other barriers; and 

dictating the building’s overall aesthetics. Curb cuts and drives connecting the 

motel property to the Kentucky Oaks shopping mall and an adjacent Wal-Mart 

property were to be constructed by the original purchaser of the motel property. 
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They were to be repaired and maintained by its successors in interest (KMI). 

Kentucky Oaks retained a non-exclusive easement for vehicular and pedestrian 

traffic over the drive, but the drive could be modified (subject to the approval of 

Kentucky Oaks) at the successor’s expense. The original grantee and successors 

were to maintain and repair a suitable parking area adjacent to the motel and keep 

it illuminated. 

The property was also subject to a recorded affirmative covenant 

requiring the grantee and its successors to pay to Kentucky Oaks “an annual fee 

equal to SIX THOUSAND AND 00/100 DOLLARS ($6,000.00) per year, in equal 

monthly installments of Five Hundred and 00/100 Dollars ($500.00) each, as 

adjusted by the Cost of Living set forth in Exhibit D. . . .” Exhibit D provides that 

“the annual Common Area Maintenance charge payable hereunder” will be 

adjusted each year to reflect fluctuations in the Consumer Price Index. Exhibit D 

provides that in no event would the annual Common Area Maintenance charge fall 

below $6,000.00. 

On May 1, 2019, Kentucky Oaks filed an action against KMI based 

upon its failure “to pay the monthly installments on the common area maintenance 

assessments” and its failure “to maintain in good condition the roadways and 

parking lots of the Subject Property.” As expressly provided in the deed of 

conveyance, Kentucky Oaks sought an order requiring the property to be restored 
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to a state of good repair and an order of sale permitting it to foreclose upon its lien 

against the property based upon the “unpaid assessments.”

KMI answered the complaint and asserted a counterclaim against 

Kentucky Oaks. In its counterclaim, KMI alleged that the affirmative covenant 

included in the deed of conveyance should not be enforced because it failed to 

define the obligations of Kentucky Oaks with respect to “common area 

maintenance.” KMI also alleged that surrounding conditions and the character of 

the mall area had changed since 1984. Based upon these allegations, KMI sought 

an order declaring the covenant null and void. In its reply, Kentucky Oaks asserted 

that the counterclaim was barred by the doctrine of res judicata. 

In October 2019, Kentucky Oaks filed a motion for summary 

judgment. In its memorandum in support of the motion, Kentucky Oaks argued 

that it was entitled to judgment and an order of sale as a matter of law. It 

contended that the issue of KMI’s liability for the payment of the disputed fees had 

been fully litigated in a previous action and that the judgment of the McCracken 

Circuit Court entered in January 2012 had resolved every issue as to its right to 

enforce the covenants. The judgment had upheld the validity of the covenants and 

awarded Kentucky Oaks “past-due [common area maintenance] assessments 

against [KMI]” in the amount of $101,197.93, plus interest. Moreover, the parties 

executed an agreement thereafter reflecting KMI’s “continuing obligation to pay 
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certain common area maintenance fees (‘CAM fees’), as provided in a Special 

Warranty Deed between [Kentucky Oaks] and [KMI’s predecessor in interest].” 

KMI responded that genuine issues of material fact precluded entry of

summary judgment. It argued that the prior judgment and the terms of the parties’ 

written agreement were not dispositive because “circumstances have changed 

relating to the real property.” It reiterated that the character of the area had 

changed since 2012 and that the “Order does not and could not address facts and 

circumstances arising after entry of the Order.” It also argued that language 

recognizing KMI’s “continuing obligation” to pay common area maintenance fees 

included in the parties’ written agreement did not foreclose KMI’s ability to 

challenge the validity of those fees prospectively. Finally, KMI argued that 

alterations in traffic patterns, an increase in the number of visitors to the area, and 

changes to the footprint of nearby commercial entities were all changes impacting 

“the . . . maintenance need of the ‘common area’ as described in the 1984 

restrictions.” KMI sought to conduct discovery with respect to the collection and 

use by Kentucky Oaks of common area maintenance funds.

Following a hearing, the McCracken Circuit Court concluded that its 

judgment of January 2012 upheld the validity of the disputed fees. It granted the 

motion for summary judgment, and an order of sale was entered. 
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KMI filed a timely motion to alter, amend, or vacate. It argued that 

the covenant recorded in 1984 “is now void or unenforceable because the area 

around Kentucky Oaks Mall has undergone substantial change in the past thirtyfive years.” It also argued that Kentucky Oaks had breached its duty to perform 

common area maintenance. It requested an opportunity to conduct discovery. 

In an order entered May 5, 2020, the McCracken Circuit Court 

amended its summary judgment. The court concluded that KMI specifically 

acknowledged its obligation to pay the disputed fees in an agreement that it had

executed in late January of 2012, and it rejected KMI’s contention that changes in 

the area had any bearing on the enforceability of the covenant. The court noted 

that KMI had not identified any instance in which Kentucky Oaks failed to perform 

common area maintenance. Lastly, it reiterated that its prior judgment had finally 

decided the parties’ dispute concerning the enforceability of the covenant. This 

appeal followed. 

 A motion for summary judgment should be granted only where:

the pleadings, depositions, answers to interrogatories, 

stipulations, and admissions on file, together with the 

affidavits, if any, show that there is no genuine issue as to 

any material fact and that the moving party is entitled to a 

judgment as a matter of law. 
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CR

1 56.03. Summary judgment is appropriate where the movant shows that the 

adverse party could not prevail under any circumstance. Pearson ex rel. Trent v.

Nat’l Feeding Sys., Inc., 90 S.W.3d 46 (Ky. 2002). We review the trial court’s 

decision to grant summary judgment de novo. Caniff v. CSX Transp., Inc., 438 

S.W.3d 368 (Ky. 2014). We must consider whether the circuit court erred by 

concluding that there were no genuine issues as to any material fact and whether

Kentucky Oaks was entitled to a judgment as a matter of law. 

On appeal, KMI argues first that the court erred by failing to evaluate 

the changes that have occurred near its motel since 1984. Citing to the Court’s 

opinion in Goodwin Brothers v. Combs Lumber Company, 275 Ky. 114, 120 

S.W.2d 1024 (1938), it argues that the change in the character of the neighborhood 

is sufficient to defeat the purpose of the covenant so as to render it unenforceable. 

Next, KMI argues that the court erred by cutting off discovery aimed 

at investigating whether Kentucky Mall’s maintenance of common areas is “overexpansive” or “woefully insufficient.” It contends that the manner in which the

disputed fees are collected and utilized is a question of fact precluding summary 

judgment. 

Finally, KMI argues that the court erred by concluding both: (1) that 

the doctrine of res judicata applies to the controversy and (2) that the parties’ 

 

1 Kentucky Rules of Civil Procedure. 
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written agreement limits its ability to challenge the enforceability of the covenant. 

While we disagree with each of these contentions, our resolution of the final 

argument is dispositive.

In Yeoman v. Commonwealth, Health Policy Board, 983 S.W.2d 459 

(Ky. 1998), the Supreme Court of Kentucky explained that res judicata is an 

affirmative defense that precludes repetitious legal actions. The doctrine 

encompasses both issue preclusion and claim preclusion. Id. Issue preclusion bars 

the parties from relitigating an issue actually litigated and finally decided in a 

previous action. Miller v. Administrative Office of Courts, 361 S.W.3d 867 (Ky. 

2011). 

Claim preclusion bars a party from re-litigating a previously 

adjudicated cause of action. Id. The bar includes every matter relating to the 

subject of the litigation which could have been -- as well as those that were --

introduced in support of the contention of the parties in the prior proceeding. Id. 

If two actions concern the same controversy, then the earlier action is deemed to 

have adjudicated every matter pertaining to the contest. Id. Because of its breadth, 

claim preclusion applies only where there is an identity of parties; an identity of 

the causes of action; and a resolution of the action upon its merits. Yeoman, supra. 

In evaluating KMI’s counterclaim, the court concluded that its prior 

judgment had decided the parties’ dispute concerning the enforceability of the 
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covenants affecting the motel property -- the same dispute between them in this 

proceeding. Because that issue was previously resolved on its merits, the circuit 

court did not err by concluding that the principle of claim preclusion barred KMI’s 

claim; i.e., that the affirmative covenant requiring the payment of common area 

maintenance fees to Kentucky Oaks was unenforceable. 

In an effort to avoid the effect of claim preclusion, KMI contends that 

it intends to litigate the enforceability of the covenant only in light of changes to 

the area that have occurred since the judgment was entered in 2012 -- an issue that 

was not and could not have been addressed in the prior proceeding. However, this 

contention is belied and contradicted by language included both in its pleadings 

and in its motion to alter, amend, or vacate the summary judgment that posited its 

claim on changes in the character of the mall area since 1984. 

Furthermore, in arguing that the covenant requiring the payment of 

common area maintenance fees is no longer enforceable, KMI characterizes the 

covenant as a restrictive covenant. It relies upon restrictive covenant cases in 

which the courts recognize changed conditions and, because of the changed 

conditions, refuse to enforce the covenant or cancel it. See Godwin, supra;

Cochran v. Long, 294 S.W.2d 503 (Ky. 1956). 

The analysis and holdings of these cases are of no recourse for KMI 

because they involve an analysis of restrictive covenants requiring the covenantor 
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to refrain from some otherwise lawful use of the property. The matter before the 

circuit court in this case concerned instead an affirmative covenant calling for the 

payment of money. See RESTATEMENT (THIRD) OF PROPERTY (SERVITUDES) § 1.3 

(2000); Patch v. Springfield School Dist., 989 A.2d 500 (Vt. 2009). 

Changes in the character of restricted property or the property 

surrounding it may be so glaring as to cause restrictive covenants to lose their 

purpose over time. However, that reasoning is not relevant to the enforcement of 

the common area maintenance fees at issue in this case -- particularly regarding 

any changes that have occurred in the area since the court’s judgment of 2012. See

Lake Wauwanoka, Inc. v. Spain, 622 S.W.2d 309 (Mo. Ct. App. 1981) (concluding 

that the analysis of a petition to void an affirmative covenant is fundamentally 

different from a petition to void a negative covenant involving an alleged change in 

conditions). 

Finally, we are not unsympathetic to KMI’s contention that an 

affirmative covenant should be enforced only where a court identifies a standard 

by which the covenantee’s actions can be evaluated. See Armstrong v. Ledges

Homeowners Ass’n, Inc., 633 S.E.2d 78, 81 (N.C. 2006) (concluding that “broad 

assessments for the general purposes of promoting the safety, welfare, recreation, 

health, common benefit, and enjoyment of the residents of [a development] as may 

be more specifically authorized from time to time by the [development’s governing 
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body]” are unreasonable because they grant “practically unlimited power” to the 

governing body to assess property owners); see also Allen v. Sea Gate Ass’n, 460 

S.E.2d 197, 199-200 (N.C. App. 1995) (holding that a covenant requiring an 

assessment “for the maintenance, upkeep and operations of the various areas and 

facilities by Sea Gate Association, Inc.” was void because there was no standard by 

which a court could assess how the homeowners’ association chose the properties 

to maintain). 

However, this issue was relevant to the subject of the previous 

litigation. It could have been introduced in support of KMI’s earlier contention 

that the covenants were unenforceable. By virtue of claim preclusion, the 2012 

litigation must be deemed to have adjudicated every matter actually or potentially 

pertaining to the cause of action. Consequently, it is res judicata. 

We AFFIRM the judgment of the McCracken Circuit Court. 

ALL CONCUR.

BRIEFS FOR APPELLANT:

Nicholas M. Holland

Ryan T. Polczynski

Paducah, Kentucky

BRIEF FOR APPELLEE

KENTUCKY OAKS MALL 

COMPANY, LTD:

William E. Pinkston

Paducah, Kentucky