RENDERED: JUNE 14, 2024; 10:00 A.M.

NOT TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2023-CA-0939-MR

STEWART SMITH AND SMITH 

FAMILY VENTURES, LLC 

APPELLANTS 

v. 

APPEAL FROM FAYETTE CIRCUIT COURT

HONORABLE LUCY ANNE VANMETER, JUDGE

ACTION NO. 19-CI-04395

TERRY L. HATTON; MALIBU 

JACK’S 2, LLC; MALIBU JACK’S 5, 

LLC; MALIBU JACK’S LOUISVILLE, 

LLC; MALIBU JACK’S, LLC AKA 

MALIBU JACK’S INDOOR THEME 

PARK; STEPHEN D. HATTON; AND 

STH ENTERPRISES, LLC APPELLEES 

OPINION

REVERSING 

AND REMANDING 

**   **  **

BEFORE: COMBS, A. JONES, AND KAREM, JUDGES.

COMBS, JUDGE: Stewart Smith and Smith Family Ventures, LLC, appeal from 

an order of the Fayette Circuit Court entered on June 6, 2023, granting summary 

judgment in favor of Terry L. Hatton; Stephen D. Hatton; STH Enterprises, LLC; 
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Malibu Jack’s LLC; Malibu Jack’s Louisville LLC; Malibu Jack’s 2 LLC; and 

Malibu Jack’s 5 LLC (referred to collectively as “Malibu Jack’s”). The trial court 

determined that the parties’ written agreement was so indefinite in its terms as to 

cause it to be subject to an abbreviated five-year statute of limitations as though it 

were a contract not in writing. Additionally, it concluded that the doctrine of 

laches applied to the action for breach of contract. The court determined that 

Malibu Jack’s was entitled to judgment as a matter of law because the action to 

enforce the contract was brought outside the five-year period -- and the court

perceived that Smith and Smith Family Ventures had slept on their rights to 

enforce the agreement to the prejudice of Malibu Jack’s. After our review, we 

reverse and remand for further proceedings.

The trial court accepted the following facts as undisputed. In the 

spring of 2013, Terry Hatton and Steve Hatton approached Stewart Smith about an 

investment opportunity -- “the Malibu Jack’s concept.” The parties had a longstanding business relationship after having “entered into various business deals 

dating back to 2007.” The Hattons pitched to Smith their plan for an indoor theme 

park and presented him with a detailed business plan, including projections for 

startup expenses, monthly expenses, and total gross income. The business plan 

recounted how the Hattons had developed -- then sold -- Kentucky Basketball 

Academy in Lexington and explained that they were now interested in putting “all 
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their resources into a new venture.” The Hattons envisioned themselves as part of 

the management team operating the business on a day-to-day basis. 

On May 29, 2013, Malibu Jack’s entered into a written agreement 

with Stewart Smith and Smith Family Ventures. In its entirety, the agreement 

provided as follows:

In consideration for a loan to be made from Stewart A. 

Smith and/or Smith Family Ventures, LLC (“Smith”) to 

Terry L. Hatton, Stephen D. Hatton, STH Enterprises, 

LLC, Malibu Jack and other related entities (collectively 

Hatton”).

The parties hereby agree to the following events to occur:

(1) Upon Smith obtaining loans, Smith hereby agrees to 

provide a loan to Hatton in the amount of $400,000. 

Loan document shall be prepared.

(2) Assignment of 35% lease/option agreement 

(attached) between STH Enterprises, LLC, KBA Sports, 

Inc. and Kentucky Basketball Academy, LLC dated 

March 8, 2011 and cash flow beginning presently 

payable monthly. This assignment shall be prepared by 

an attorney mutually agreed upon. Second mortgage 

(unrecorded) on Ruccio and Palumbo property since 

lease/option is not personally guaranteed by lessees. 

Upon default of lease/option agreement by lessees, loan 

still survives with a guaranteed interest rate of minimal 

11% and aforementioned mortgage to be recorded; 

however, at the option of Smith upon default of 

lease/option he can retain 35% interest in property. 

(3) In lieu of ownership interests in the entities, Smith 

shall be entitled to 3% of gross revenues/royalty 

(including sale of business, property, real estate of any 
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business interests related to Malibu Jack concept, etc.) 

Monthly reports shall be provided with payment.

(4) Hatton agrees to share pertinent financial information 

and records related to this transaction.

(5) This agreement shall be binding upon and inure to 

the benefit of the parties hereto, respective heirs, legal 

representative, successors and assigns.

Smith Family Ventures borrowed the necessary sums and issued a check to Terry 

Hatton and STH Enterprises in the amount of $400,000.00. Malibu Jack’s 

executed the document contemplated by paragraph 1 of the agreement -- a demand 

note promising to repay to Smith the sum of $400,000. Smith assigned the 

promissory note to Smith Family Ventures. 

On August 16, 2013, STH Enterprises executed the document 

contemplated by paragraph 2 of the agreement -- an assignment to Smith Family 

Ventures of a 35% interest in the lease/option specifically described. Additionally, 

on this date, STH Enterprises mortgaged to Smith Family Ventures the Ruccio 

property. The Palumbo property referenced in paragraph 2 had not yet been 

purchased -- although it was contemplated as the location for Malibu Jack’s theme 

park.

In September 2013, the Palumbo property was purchased. Malibu 

Jack’s opened for business later that fall. The venture was immensely successful, 

and Malibu Jack’s now has several locations across Kentucky and one in Indiana. 
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On November 15, 2013, shortly after the first Malibu Jack’s opened, 

Smith corresponded with Terry Hatton reminding him of item (3) of their contract: 

that in lieu of taking an ownership interest in the theme park, Smith was to be paid 

“3% of gross revenues/royalty” to be accompanied by monthly sales reports. 

Smith indicated that he expected the payments of his portion of gross revenues to 

begin “with this first month (October).” 

Terry Hatton disagreed that Smith was entitled to a percentage of 

gross revenue. He explained his understanding of the parties’ agreement as 

follows: “you were going to get 3% of gross if we needed u to co-sign on the 

property on Blake James [the Palumbo property]. Our deal with [People’s 

Exchange Bank] required SBA approval and did not require you to co-sign.” 

Smith was not provided financial information related to Malibu Jack’s operations 

nor was he ever paid a percentage of gross revenue. Loan repayments were made 

only on an intermittent basis. 

In July 2016, Smith and Smith Family Ventures agreed to a 

modification of the $400,000.00 promissory note executed by Malibu Jack’s in 

May 2013. Among other things, the original interest rate of 11% was revised to 

9%, and the borrowers agreed to use their best efforts to repay the loan in full 

before December 31, 2016. However, the loan modification did not address the 
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parties’ agreement with respect to Smith’s interest in Malibu Jack’s gross 

revenue/royalties. 

On December 12, 2019, Smith and Smith Family Ventures filed a 

lawsuit for breach of contract against Malibu Jack’s. They alleged that Malibu 

Jack’s breached the agreement to repay the loan, which had an outstanding 

balance, including interest, of more than $290,000.00. They also alleged that 

Malibu Jack’s breached the terms of the parties’ agreement by failing to pay to

them $75,000 (representing 3% of the sale of the Malibu Jack’s located at the 

Palumbo property) and by failing to remit 3% of the monthly gross revenue/royalty 

realized by Malibu Jack’s. Smith and Smith Family Ventures demanded an 

equitable accounting and presented claims based upon promissory estoppel and 

unjust enrichment. After the complaint was filed, the terms of the promissory note 

were satisfied. Claims related to this part of the parties’ agreement were 

voluntarily dismissed. Malibu Jack’s answered and denied the remaining claims 

asserted against them. They also asserted counterclaims. A period of discovery 

began. 

On May 25, 2021, Smith and Smith Family Ventures filed a motion 

for partial summary judgment. They argued that the requirements of the parties’

written agreement were plain and that Malibu Jack’s simply breached the contract. 

Malibu Jack’s responded, contending, in part, that the terms of the agreement were 
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ambiguous in many respects and that a genuine issue of material fact existed with 

respect to whether the parties intended for the loan modification agreement of 2016 

to constitute a novation. Eventually, Malibu Jack’s filed a cross-motion for 

summary judgment. 

By its order entered on June 16, 2023, the Fayette Circuit Court 

granted, in part, Malibu Jack’s motion for summary judgment. Reviewing its 

provisions, the court determined that the parties’ 2013 agreement was ambiguous. 

Having determined that the parties’ agreement was susceptible to inconsistent 

interpretations, it concluded that resort to parol evidence was required. However, 

it determined that “the matter is subject to resolution by a factfinder” and declined 

to grant summary judgment on this basis. The circuit court also declined to grant 

summary judgment on the basis that the subsequent loan modification of July 2016 

was a novation that superseded the parties’ original agreement. 

However, the circuit court was persuaded that the parties’ agreement 

of May 29, 2013, was so indefinite as to make it enforceable only within the 

abbreviated 5-year period of limitations included in the provisions of KRS1

413.120. It also concluded that “the expiration of some 70 months between the 

alleged breach of contract and the filing of this lawsuit [constitutes] an 

unreasonable delay worthy of the imposition of the doctrine of laches as a matter 

1 Kentucky Revised Statutes. 
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of law.” Because the circuit court concluded that the parties had entered into a 

contract otherwise enforceable at law, it granted summary judgment 

notwithstanding the alternative, equitable theories relied upon by Smith and Smith 

Family Ventures as a basis for relief. The judgment was made final and appealable 

as the court found no just cause for delay. 

On appeal, Smith and Smith Family Ventures argue first that the 

Fayette Circuit Court erred by concluding that Malibu Jack’s was entitled to 

judgment as a matter of law because the parties’ agreement was so vague as to be 

subject to a five-year period of limitations and that the equitable doctrine of laches 

applied to impede enforcement of its provisions. Next, they contend that the 

circuit court erred by concluding that Malibu Jack’s was entitled to judgment as a 

matter of law with respect to the claims of Smith and Smith Family Ventures for 

relief based upon theories of promissory estoppel and unjust enrichment. Finally, 

Smith and Smith Family Ventures contend that the Fayette Circuit Court erred by 

concluding that Malibu Jack’s is entitled to judgment as a matter of law with 

respect to their demand in equity for an accounting. 

 ANALYSIS

Summary judgment is properly granted where the pleadings, 

depositions, answers to interrogatories, stipulations, admissions, and/or affidavits 

show that there is no genuine issue as to any material fact and that the moving 
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party is entitled to a judgment as a matter of law. CR2 56.03. Our review of a 

summary judgment is always de novo. Cornett v. Student Loan Sols., LLC, 672 

S.W.3d 852 (Ky. App. 2023) (citing Seiller Waterman, LLC v. Bardstown Cap.

Corp., 643 S.W.3d 68 (Ky. 2022); Cunningham v. Kroger Ltd. P’ship I, 651 

S.W.3d 199 (Ky. App. 2022)). 

When parties arrive at an agreement and reduce it to writing, “all 

preliminary negotiations are conclusively presumed to have been agreed upon, and 

the writing itself to express the true contract, unless it is attacked for fraud or 

mistake.” Sanders v. Wender, 205 Ky. 422, 265 S.W. 939, 940 (1924). An 

unambiguous, written contract must be strictly enforced according to the plain 

meaning of its express terms and without resort to extrinsic evidence. Allen v.

Lawyers Mut. Ins. Co. of Kentucky, 216 S.W.3d 657 (Ky. App. 2007). Even where 

the contracting parties intended a different result, a contract cannot be interpreted 

contrary to the plain meaning of its terms. Abney v. Nationwide Mut. Ins. Co., 215 

S.W.3d 699 (Ky. 2006). A contract is not ambiguous if a reasonable person would 

find its terms susceptible to only one meaning. Cantrell Supply, Inc. v. Liberty

Mut. Ins. Co., 94 S.W.3d 381 (Ky. App. 2002). However, if the provisions in 

controversy are reasonably susceptible to different or inconsistent, yet reasonable, 

interpretations, the contract is deemed to be ambiguous. Cadleway Properties, Inc.

2 Kentucky Rules of Civil Procedure. 
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v. Bayview Loan Servicing, LLC, 338 S.W.3d 280 (Ky. App. 2010). Determining 

whether a contract is ambiguous is a question of law for the courts and is subject to 

de novo review. Cantrell, supra.

First, we address the contention of Smith and Smith Family Ventures 

that the Fayette Circuit Court erred by concluding that the parties’ agreement was 

so vague as to be subject to an abbreviated period of limitations. Kentucky’s 

fifteen-year statute of limitation, KRS 413.090, is applicable to an action 

concerning a written contract; a five-year statute of limitation, KRS 413.120, 

controls enforcement of an unwritten agreement. 

In Mills v. McGaffee, 254 S.W.2d 716 (Ky. 1953), the Supreme Court 

of Kentucky considered whether the five-year limitation period for a nonwritten 

contract or the fifteen-year limitation period for a written contract controlled. The 

court observed as follows: 

[I]f the contract be partly oral and partly in writing or if a 

written agreement is so indefinite as to necessitate a 

resort to parol testimony to make it complete, the 5-year

statute of limitations concerning ‘contracts not in writing’

would be applicable just as though the contract had rested 

entirely in parol. 53 C.J.S., Limitations of Actions, § 68, 

p. 1030. A written contract is one which is all in writing, 

so that all its terms and provisions can be ascertained 

from the instrument itself. 45 Words & Phrases, p. 605; 

53 C.J.S., Limitations of Actions, § 60, p. 1017. The 

cases generally hold that a written instrument which sets 

forth the undertaking of the persons executing it or 

discloses terms from which such an undertaking can be 

imported, and which shows the consideration for the 
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undertaking, and which identifies the parties thereto, will 

be considered a contract in writing. See Annotation to 3 

A.L.R. 2d, Sec. 2, p. 812, et seq[.]

Mills, 254 S.W.2d at 717 (footnotes omitted).

The Fayette Circuit Court observed that the parties to this action had 

different interpretations of the agreement. In support of its interpretation, Malibu 

Jack’s relied upon statements included in the parties’ negotiations. It argued that 

the parties’ discussions indicated that Smith and Smith Family Ventures would be 

entitled to share in revenue only if Smith were required to guarantee the loan that 

would be used to purchase the Palumbo property. Smith and Smith Family 

Ventures noted that the parties’ agreement contains no such language. They 

argued that whatever Malibu Jack’s had in mind during the parties’ negotiations, 

the unambiguous agreement clearly provides that a share of gross revenue will be 

distributed to Smith and Smith Family Ventures as a return on investment. 

The circuit court correctly concluded that the parties’ agreement “is 

not plain on its face that the ‘3% of gross revenues/royalty’ provision is ‘triggered 

by’ Smith guaranteeing a separate loan for purchase of the Palumbo property.” It 

observed that paragraph 3 of the parties’ agreement “is simply not limited by any 

triggering language and there is no mention of a “personal guarantee[.]” The court 

determined that any such an intention could only be gleaned with reference to 

extrinsic evidence and that parol evidence could be consulted only where the 
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agreement was considered ambiguous. Otherwise, the parties’ intentions could be 

discerned only with reference to the four corners of the instrument. 

However, examining the agreement’s provisions, the court next 

determined that it was, in fact, ambiguous in a number of ways. First, it observed 

that the contract provides that Smith agreed to provide a loan of $400,000, “upon 

Smith obtaining loans.” (Emphasis added.) The court concluded that reference to 

loans, plural, to be obtained by Smith does not match the subsequent reference to a 

single loan of $400,000 that he agreed to make to the Hattons and Malibu Jack’s. 

There is no allegation that this provision was breached. Moreover, the 

language does not render the agreement ambiguous. No matter how Smith 

obtained the $400,000 to fund the loan to Malibu Jack’s -- whether it was through 

a number of loans to him from multiple creditors or a single loan to him from a 

single creditor -- the agreement plainly provides for a single loan to Malibu Jack’s. 

This loan was provided to Malibu Jack’s as promised. 

Next, the circuit court considered the agreement’s provision relating 

to Smith’s interest in Malibu Jack’s gross revenues. Again, the agreement 

provides that “[i]n lieu of ownership interests in the entities, Smith shall be entitled 

to 3% of gross revenues/royalty (including sale of business, property, real estate of 

any business interests related to Malibu Jack concept, etc.).” (Emphasis added.) 

The court concluded that use of the word “entities” in this paragraph could be read 
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to include Kentucky Basketball Academy, LLC -- lessee in the lease agreement 

assigned to Smith and Smith Family Ventures pursuant to the agreement’s 

paragraph 2 -- rather than to Malibu Jack’s and other possible future locations of 

Malibu Jack’s. None of the businesses described in paragraph 2 is ever referred to 

as “entities,” however. The term “entities” is used in the agreement only to refer to 

business organizations related to Malibu Jack’s. Consequently, we are not 

persuaded that this provision is reasonably susceptible to different or inconsistent, 

yet reasonable, interpretations. Use of the term “entities” in paragraph 3 does not

make the contract ambiguous. 

The circuit court observed that “the Agreement does not define what 

is meant by “3% of gross revenues/royalty”; that the meaning of the phrase 

“Malibu Jack concept, etc.” is necessarily subject to interpretation; and that 

“counsel expressed uncertainty [at the hearing] regarding whether the Assignment 

of 35% [of the lease/option agreement with Kentucky Basketball Academy, LLC] 

was intended to be perpetual or whether it was extinguished upon repayment of the 

$400,000 loan.” Based upon this analysis, the court determined that the 5-year 

period of limitations ordinarily applicable to unwritten agreements precluded the 

action for breach of contract. 

 While the court noted that Smith had a difficult time defining what 

was meant by the words “revenues/royalty,” in his deposition it concluded that 
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“gross revenue” is a “commonly understood concept.” The term “revenue” is 

likewise a readily understood concept. Failing to define a contract term does not 

always -- or even often -- result in an ambiguity. Davis v. Progressive Direct

Insurance Company, 626 S.W.3d 518 (Ky. 2021). The parties expressly

contemplated that Smith and Smith Family Ventures would be further 

compensated through receipt of 3% of Malibu Jack’s revenue/royalty. Use of this 

phrase did not render the agreement ambiguous. 

The court concluded that the meaning of the phrase “Malibu Jack 

concept, etc.” is necessarily subject to interpretation and that its use rendered the 

parties’ agreement ambiguous. We disagree. The disputed phrase simply defines 

the list of assets from which Malibu Jack’s revenues/royalty could be expected to 

derive. This phrase does not render the agreement ambiguous or incomplete.

Finally, we conclude that counsel’s interpretation of the provision 

relating to the assignment of a portion of the lease/option agreement between 

Malibu Jack’s and Kentucky Basketball Academy, a provision not at issue in this 

dispute, is largely irrelevant as it involves a different source of remuneration not 

challenged in this proceeding. The entirely separate provision does not cause the 

remainder of the agreement to be rendered so vague as to be treated as an oral 

contract subject to a five-year statute of limitations. 
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Having reviewed the provisions of the parties’ agreement in dispute, 

we conclude that they are clear and unambiguous. The parties agreed that in 

exchange for making a loan to Malibu Jack’s (which presumably could not be 

secured elsewhere), Smith and/or Smith Family Ventures would be assigned an 

interest in a particular lease agreement and would be paid 3% of gross 

revenues/royalty of the Malibu Jack’s concept, specifically including any sale of 

the business, personal property, and/or real estate of any business interest related to 

the Malibu Jack’s concept. Malibu Jack’s accepted the $400,000 loan, agreed to 

repay it, and executed the necessary documents assigning part of the lease 

agreement to Smith. 

In a related argument, Smith and Smith Family Ventures contend that 

the trial court erred by concluding that the doctrine of laches also precludes 

enforcement of the agreement’s provisions. We agree. The equitable doctrine of 

laches prohibits claims “where a party engages in unreasonable delay to the 

prejudice of others rendering it inequitable to allow that party to reverse a previous 

course of action.” Cherry v. Augustus, 245 S.W.3d 766, 774 (Ky. App. 2006). 

However, because Smith and Smith Family Ventures sought a purely legal remedy 

within the applicable period of limitations, the equitable doctrine of laches is not a 

viable defense. See Gover’s Administrator v. Dunagan, 299 Ky. 38, 184 S.W.2d 
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225, 227 (1944) (in purely legal claims “the statute of limitations rather than the 

doctrine of laches is applicable”).

Next, Smith and Smith Family Ventures contend that the circuit court 

erred by concluding that Malibu Jack’s was entitled to judgment as a matter of law 

with respect to their claims based upon theories of promissory estoppel and unjust 

enrichment -- as well as their claim for an accounting. While a party may 

alternatively plead both equitable claims (including promissory estoppel, unjust 

enrichment, and an accounting) and a breach of contract claim in his complaint, a 

party may not recover upon both kinds of claims. Promissory estoppel and unjust 

enrichment are unavailable where the terms of an express contract control. 

Furlong Development Co., LLC v. Georgetown-Scott Cnty. Planning and Zoning

Commission, 504 S.W.3d 34 (Ky. 2016); Sparks Milling Co. v. Powell, 283 Ky. 

669, 143 S.W.2d 75 (1940). A claim for an accounting is also an equitable 

remedy. Peter v. Gibson, 336 S.W.3d 2 (Ky. 2010). Although they do not agree as 

to its terms, the parties do agree that they entered into a contract. Because we have 

concluded that Smith and Smith Family Ventures are entitled to proceed on 

remand on their claim for breach of contract, the circuit court’s order with respect 

to the equitable claims is immaterial. 

In summary, we conclude that the circuit court erred in determining 

that the contract was ambiguous and that, therefore, an abbreviated limitations 
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period should apply. We also conclude that entry of summary judgment in favor of 

Appellees was erroneous. 

Having determined that a viable claim for breach of contract exists, 

we remand this case to the circuit court for a resolution of this dispute by further 

proceedings. 

ALL CONCUR.

BRIEFS FOR APPELLANTS:

Ivey L. Workman

Andre F. Regard

Lexington, Kentucky 

BRIEF FOR APPELLEES:

Carroll M. Redford, III

Elizabeth C. Woodford

Lexington, Kentucky