RENDERED: JU LY 2, 2021; 10:00 A.M. NOT TO BE PUBLISHED 

# Commonwealth of Kentucky Court of Appeals

NO. 2019

- CA

- 1479

- MR
JAY RAILTON MORGAN APPELLANT

v. APPEAL FROM JEFFERSON CIRCUIT COURT

HONORABLE MITCH PERRY, JUDGE ACTION NO. 17

- CI

- 005772

FORD MOTOR COMPANY; JAMES CARROLL; JAMES T. YOUNG; MARY CULLER; AND ZIAD OJAKLI APPELLEES

OPINION AFFIRMING
**   **  **
BEFORE: DIXON, GOODWINE, AND TAYLOR, JUDGES. DIXON, JUDGE: Jay Railton Morgan appeals from the order dismissing his claims against Ford Motor Company (“Ford”), James Carroll , James T. Young , Mary Culler , a nd Ziad Ojakli , 1 entered by the J efferson Circuit Court on August 28, 2019. Following a careful review of the record, briefs, and law, we affirm.

1 Carroll, Young, Culler, and Ojakli were employees and agents of Ford at all times relevant herein

.- 2

- FACTS AND PROCEDURAL BACKGROUND Morgan was employed by Ford for 23 years . In 2008, Morgan reported that Carroll and Young engaged in insider trading. In 2011, purportedly in retaliation for hi s report, Morgan was transferred from his position in Washington, D.C., to another one in Louisville, Kentucky

. On December 17, 2012, Morgan was advised that Greg Fis cher

— mayor of Louisville, Kentucky

— made “‘very serious’ derogatory accusations about . . . Morgan’s work and conduct in Louisville as the Ford representative.” Morgan was given a three

- month notice of termination and an offer of early retirement. On Marc h 28, 2013, Morgan ’s employment with Ford was terminated.

On June 14, 2013 , Morgan brought a whistleblower action under the Sarbanes

- Oxley Act of 2002 2 against Ford with the U.S. Department of Labor , Occupational Safety and Health Administration (OSHA) , asserting he suffered adverse employment actions at Ford in retaliation for reporting insider trading

. 3
M ediation was held in Washington, D.C. Ford asserted it had legitimate, n o n retaliatory grounds to terminate Morgan because it had statement s from Fischer and Dr. Kevin Cosby

— President of Simmons College

— that Morgan had

2 18 United States Code ( U.S.C. ) § 1514A

.
3 Case No. 4

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- 13

- 043

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committed Ford funds to build a worker training facility in Louisville

. Pursuant to Ford policies, unauthorized commitment of Ford funds is grounds for termination. Despite cl aims he did not authorize such funds, Morgan entered into a confidential settlement agreement with Ford on August 6, 2013, for less than he felt entitled

. The settlement was approved by OSHA on August 29, 2013 , and the case was closed. Morgan later fil ed an action against Fischer and Dr. Cosby 4 alleging they made false statement s to Ford

— the substance of which was that Morgan committed Ford funds without authorization

— to get him fired. Ford intervened in the action, claiming Morgan improperly used conf idential mediation communications

—

in breach of the settlement agreement

— as the principal basis for his lawsuit. Both Fischer and Dr. Cosby stated in their respective affidavit s that
t he y did not make the statement s , or similar statements, alleged by Morgan. Morgan did not provide any affirmative evidence to rebut the affidavit s , nor did he provide evidence that, even if the statement s w ere made, they were made with malice. Consequently, the trial court granted sum mary judgment against Morgan , which was subsequently affirmed on appeal by another panel of our C ourt on March 24, 2017

.

4 Jefferson Circuit Court, Case No. 13

- CI

- 06576.- 4

- Meanwhile, o n November 10, 2015, Morgan requested his original whistleblower claim be reopened , alleging Ford misrepresented its pos session of
statement s from Fischer and Dr. Cosby concerning the unauthorized commitment of Ford funds that provided a legitimate, non

- retaliatory reason for termination. On January 4, 2016, OSHA dismissed Morgan’s complaint for lack of jurisdiction. 5
Mor gan appealed to the Office of Administrative Law Judge s. On June 9, 2017, that appeal was also dismissed for lack of jurisdiction. 6

On October 31, 2017, Morgan filed his complaint in the case herein 7
seek ing to undo his settlement with Ford , which he claim ed was procured by fraud. Morgan asserts he was forced to accept a reduced settlement because “Ford” told
him

— at mediation

—

that Fischer and Dr. Cosby made statements to Ford that would constitute grounds for the termination of Morgan’s employment. Appellees moved the trial court to dismiss this action for lack of personal jurisdiction or, in the alternative, for failure to state a claim upon which relief may be granted . After the motion was briefed and arguments heard, the trial court entered its o pinion and

5 Case No. 4

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6 Case No. 2016

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7 In his complaint, Morgan describes Culler as one of his supervisor s at Ford who took adverse employment actions against him and Ojakli as one of his superiors at Ford who was very angry with him for report ing Ojakli’s friend , Young , for insider trading

.- 5

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order granting the motion to dismiss the complaint with prejudice. This appeal followed. STANDARD OF REVIEW

Appellees moved the trial court to dismiss this action for lack of personal jurisdiction. “ Jurisdiction is a question of law , and ou r review is de

novo . ” Commonwealth v. B.H ., 548 S.W.3d 238, 242 (Ky. 2018) (citations omitted). “ Furthermore, ‘ [s]tatutory interpretation raises pure questions of law, so our review is [ de ] novo , meaning we afford no deference to the decisions below. ’” Id

. In the alternative, Appellees moved the trial court to dismiss the complaint under CR 8 12.02(f) for failure to state a claim upon which relief may be granted . Kentucky’s highest court has interpreted this standard, observing:

A motion to dismiss for failure to state a claim upon which relief may be granted “admits as true the material facts of the complaint.” So a court should not grant such a motion “unless it appears the pleading party would not be entitled to relief under any set of facts whic h could be proved. . . .” Accordingly, “the pleadings should be liberally construed in the light most favorable to the plaintiff, all allegations being taken as true.” This exacting standard of review eliminates any need by the trial court to make findin gs of fact; “rather, the question is purely a matter of law. Stated another way, the court must ask if the facts alleged in the complaint can be proved, would the plaintiff be entitled to relief?” Since a motion to dismiss for failure to state a claim up on which

8 Kentucky Rules of Civil Procedure.- 6

- relief may be granted is a pure question of law, a reviewing court owes no deference to a trial court’s determination; instead, an appellate court reviews the issue de novo. Fox v. Grayson , 317 S.W.3d 1, 7 (Ky. 2010) (footnotes omitted). JURISDICTION Courts recognize three categories of jurisdiction: (1) subject matter jurisdiction involving authority over the nature of a case and the general type of controversy, (2) jurisdiction over a particular case involving authority to decide a
spe cific case, and (3) personal jurisdiction involving authority over specific
persons. Hisle v. Lexington

- Fayette Urban Cty

. Gov ’ t , 258 S.W.3d 422, 429 (Ky. App. 2008). Here, the trial court found it did not have personal jurisdiction over the Appellees

— wh o are neither Kentucky citizens nor a Kentucky corporation

— under Kentucky’s long

- arm statute.

In relevant part, Kentucky’s long

- arm statute, KRS 9 454.210, provides: (1) As used in this section, “person” includes an

individual, his executor, administrato r, or other personal representative, or a corporation, partnership, association, or any other legal or commercial entity, who is a nonresident of this Commonwealth. (2) (a) A court may exercise personal jurisdiction over a person who acts directly or by a n agent, as to a claim arising from the person’s:

9 Kentucky Revised Statutes.- 7

- 1. Transacting any business in this Commonwealth; 2. Contracting to supply services or goods in this Commonwealth; 3. Causing tortious injury by an act or omission in this Commonwealth; 4. Causing tor tious injury in this Commonwealth by an act or omission outside this Commonwealth if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services render ed in this Commonwealth, provided that the tortious injury occurring in this Commonwealth arises out of the doing or soliciting of business or a persistent course of conduct or derivation of substantial revenue within the Commonwealth;

. . . (b) When jurisdiction over a person is based solely upon this section, only a claim arising from acts enumerated in this section may be asserted against him. ( E mphasis added

. ) Despite the lengthy factual allegations detailed in the complaint, this is a suit which hinges upon fraud , which Morgan alleges occurred at the mediation held in Washington, D.C. 10 Morgan does not allege that any tortious conduct at issue in this suit occurred in Kentucky , nor does he allege his

10 Morgan’s c omplaint consists of more than 35 pages of fa ctual allegations, but the fraud claim is pled in less than three pages.- 8

-

claim s arise from the Appellees ’ performance o f any of the acts listed under KRS
454.210 , in Kentucky, which would confer the court jurisdiction over them.

Even so, Morgan asserts

— for the first time on appeal

— that KRS
452.450 and Section 112 of the Kentucky Constitution provide the trial court jurisdiction. However, o nly issues fairly brought to the attention of the circuit court are adequately preserved for appellate review. Elery v. Commonwealth , 368 S.W.3d 78, 97 (Ky. 2012) (citing Richardson v. Commonwealth , 483 S.W .2d 105, 106 (Ky. 1972); Springer v. Commonwealth , 998 S.W.2d 439, 446 (Ky. 1999) ; and Young v. Commonwealth , 50 S.W.3d 148, 168 (Ky. 2001)). Accordingly, Morgan waived his ability to raise arguments concerning jurisdiction under KRS 452.450 and the Kentu cky Constitution by failing to raise them before the trial court.

SETTLEMENT AGREEMENT The trial court further found that, even if it had jurisdiction over all the parties in the case herein, Morgan’s claims are barred by the terms of the settlement agr eement. Settlement agreements are a type of contract governed by contract law. See Frear v. P.T.A. Indus

. , Inc

. , 103 S.W.3d 99, 105 (Ky. 2003). “A fundamental rule of contract law holds that, absent fraud in the inducement, a written agreement duly exec uted by the party to be held, who had an opportunity to read it, will be enforced according to its terms.” Conseco Fin

. Servicing Corp. v. Wilder , 47 S.W.3d 335, 341 (Ky. App. 2001). “‘ [I] n the absence of ambiguity a- 9

-

written instrument will be enforced s trictly according to its terms,’ and a court will interpret the contract ’ s terms by assigning language its ordinary meaning and without resort to extrinsic evidence.” Frear , 103 S.W.3d at 106 (citations omitted). It is also well

- settled that “[t]he construction and interpretation of a contract, including questions regarding ambiguity, are questions of law to be decided by the court.” First Commonwealth Bank of Prestonsburg v. West , 55 S.W.3d 829, 835 (Ky. App. 20 00). Because the construction and interpretation of a contract is a matter of law, it is reviewed under the de novo standard. Nelson v. Ecklar , 588 S.W.3d 872, 878 (Ky. App. 2019), review denied (Dec. 13, 2019).

Here, the terms of the contract were cl ear and unambiguous. The agreement provided a release of Morgan’s claims against Ford and its agents and employees . It s pecifically stat ed t his release included , but was not limited to , Morgan’s claims against Young, Culler, and Ojakli. This release als o covered any and all of Morgan’s claims against Ford and its agents and employees , whether known or unknown , “from the beginning of the world through the Effective Date[.]” 11 The a greement noted it “is intended to be broadly construed to release all claim s arising up to the Effective Date[.]” It further recited that Morgan’s decision to sign the agreement “is knowing and voluntary and not induced by the Company [(Ford)] or any Associated Persons, or any agent or employee of the

11 The “Effective Date” is the eighth calendar day after Morgan executed the agreement.- 10

-

Company or any Associated P ersons, through fraud, misrepresentation or a threat to withdraw or alter the Company’s offer to provide the consideration described in
Section 2 [

. ] ” The agreement further stated , “No party has been or is being influenced to any extent or is relying upon any representation, covenant or statement by any other person unless set forth in this Agreement. ” These provisions foreclose Morgan’s claims concerning fraudulent inducement to enter the agreement . All other claims contained in Morgan’s complaint in the case herein predate the effective date of the agreement . Thus, they are barred by the terms of the agreement

. FRAUD

Nevertheless, the trial court opined that even if it had jurisdiction over the Appellees , and Morgan’s claims were not otherwise barred by the terms of the settlement agreement, Morgan still failed to meet the heightened pleading standard in setting forth his fraud claims against the Appellees. In United Parcel Serv ice
Co mpany v. Rickert , 996 S.W.2d 464, 468 (Ky. 1999), Kentucky’s highest court
set forth the elements of a fraud claim:

the party claiming harm must establish six elements of fraud by clear and convincing evidence as follows: a) material representation b) which is false c) know n to be false or made recklessly d) made with inducement to be acted upon e) acted in reliance thereon and f) causing injury. Wahba v. Don Corlett Motors, Inc

. , [573 S.W.2d 357, 359 (Ky. App. 1978)].- 11

-

I t is enough to plead the time, place, the substance of the false representations, the facts misrepresented , and the identification of what was obtained by the fraud. Scott v. Farmers State Bank , 410 S.W.2d 717 (Ky. 1966) . This “does not require textbook pleading of all elements of fraud but requires merel y that plaintiff set forth facts with sufficient particularity to apprise defendant fairly of charges against him.” Id . at 722

.

Yet, review of Morgan’s complaint

— which he has neither amended nor moved to amend

—

reveals fatal flaws in his failure to spec ifically plead his fraud claims against the Appellees. CR 9.02 provides, “ [i] n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind o f a person may be averred generally. ” “[ A ]t a minimum, Rule 9(b) requires that the plaintiff specify the who, what, when, where, and how of the alleged fraud.” Sanderson v.
HCA

- The Healthcare Co ., 447 F.3d 873, 877 (6th Cir. 2006) (internal quotation

mar ks and citation omitted ) ( discussing federal counterpart to CR 9.02). Morgan’s complaint does not identify who made the alleged misrepresentation s he claims to have relied up on during mediation

. Absent this requirement , it is impossible to establish the elements from which a cause of action for fraud might arise.- 12

- CONFIDENTIALITY The trial court found the alleged misrepresentations are in admissible because they occurred at mediation and are protected from disclosure by the Uniform Mediation Act (UMA) ad opted in Washington, D.C. The trial court further pointed out that, a lthough the UMA has not been formally adopted in Kentucky, Jefferson Circuit Court Rules of Civil Procedure, Loc al R ule 1312 mandate s that mediation shall be considered as settlement neg otiations for purposes of KRE 12 408. However, we need not look beyond the agreement itself to determine that every allegation concerning the parties’ conduct prior to the effective date of the agreement was to be kept confidential. The a greement states Mo rgan “agrees to keep strictly confidential the existence of this A greement, the allegations raised in or related to the Asserted Claims, and the existence or substance of the negotiations and mediation leading up to this Agreement.” To the extent Morgan’s claims concern any actions by the Appellees prior to mediation, they are still barred under the settlement agreement, for the reasons previously discussed. DAMAGES

The trial court further found that Morgan’s damages are not cognizable. Morgan failed to challenge this ruling. His failure to raise an

12 Kentucky Rules of Evidence.- 13

-

argument concerning this issue constitutes waiver. Johnson v. Commonwealth , 450 S.W.3d 707, 713 (Ky. 2014)

. CONCLUSION Therefore, and for the foregoing reasons, the order of the Jefferson Circuit Court is AFFIRMED.

ALL CONCUR

.

BRIEF FOR APPELLANT: Thomas A. McAdam, III Louisville, Kentucky BRIEF FOR APPELLEE S : R. Thad Keal Prospect, Kentucky Katherine V.A. Smith Los Angeles, California Amanda C. Machin Jacob T. Spencer Washington, D.C.