RENDERED: JUNE 9, 2023; 10:00 A.M.

NOT TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2021-CA-1061-MR

SAKURA, LTD CO.;

1 SAKURA, LTD.; 

AND CHRIS ARDELT APPELLANTS 

v. 

APPEAL FROM FRANKLIN CIRCUIT COURT

HONORABLE THOMAS D. WINGATE, JUDGE

ACTION NO. 21-CI-00343

KAY-JEN INVESTMENTS, LLC APPELLEE 

AND

NO. 2022-CA-0580-MR

KAY-JEN INVESTMENTS, LLC APPELLANT

v. APPEAL FROM FRANKLIN CIRCUIT COURT

HONORABLE THOMAS D. WINGATE, JUDGE

ACTION NO. 21-CI-00900

1

 Sakura, Ltd. Co. is named in the notice of appeal. However, the trial court denied its motion to 

intervene in the underlying case. That denial was memorialized in the same order that is the 

subject of the present appeal. However, Sakura, Ltd. Co. has not challenged the denial of 

intervention. That issue is not before this Court. Accordingly, nothing herein addressing the 

merits of the present cases applies to Sakura, Ltd. Co. 
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SAKURA, LTD. AND CHRIS ARDELT APPELLEES 

OPINION

AFFIRMING IN PART, REVERSING IN PART, 

AND REMANDING

**   **  **

BEFORE: THOMPSON, CHIEF JUDGE; ACREE, AND MCNEILL; JUDGES.

MCNEILL, JUDGE: This case involves a lease (hereafter, the Lease), with an 

option to purchase a property located in Frankfort, Kentucky. Beginning on 

February 17, 2017, Appellee, Kay-Jen Investments, LLC (Lessor), leased the 

properties to Appellants, Sakura, Ltd., and Chris Ardelt (Lessees). The Lease ran 

for a term of three years and expired on February 16, 2020. The Lease also 

granted Lessees an option to purchase the property, with closing to occur “on or 

before sixty (60) days after exercise of the Option . . . .” 

After the three-year term expired, the parties agreed to amend the 

lease to extend through February 16, 2021. On that day, Lessees provided Lessor

with a notice to exercise the option to purchase. However, Lessees failed to close 

on the property within sixty days. Lessor then provided Lessees with a notice of 

cancellation of the lease. Despite the notice of cancellation, Lessees asserted rights 

under the lease. 
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Lessor filed a Petition for a Declaration of Rights in Franklin Circuit 

Court (Case One). Lessees filed a motion to dismiss, which was denied. The court 

granted Lessor’s Petition, thereby concluding that the Lease term had expired. No 

motion to alter, amend, or vacate was filed pursuant to CR2 59.05. Lessee 

appealed and the circuit court was divested of jurisdiction. Lessor subsequently 

filed a motion pursuant to CR 60.02, which was denied. 

On December 22, 2021, Lessors filed a separate action in the Franklin 

Circuit Court (Case Two), alleging, inter alia, breach of contract, damages, and 

attorney’s fees. On May 9, 2022, the court granted Lessor’s motion to dismiss on 

the basis that Case Two was an improper attempt to “split” the litigation. Lessor 

appealed. Both Cases were originally docketed as two separate appeals before two 

different panels of this Court. At the Court’s discretion, both cases shall be 

decided by the present panel. For the following reasons, we affirm the judgment in 

Case One. We reverse the judgment in Case Two and remand. Each will be 

addressed in turn. 

ANALYSIS

It is undisputed that the parties failed to close the purchase deal within 

sixty days after Lessees provided notice of their intent to purchase. And although 

there was no express clause indicating that time was of the essence, the circuit 

2

 Kentucky Rules of Civil Procedure.
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court correctly cited the “long established and universally declared rule that in such 

contracts (creating options) time is of the essence thereof both in law and equity

. . . .” Rounds v Owensboro Ferry Co., 253 Ky. 301, 69 S.W. 2d 350, 354 (1934). 

See also Good v. Evans, 178 S.W.2d 600, 601 (Ky. 1944); and 3 ROBERT W.

KEATS, KY. PRAC. REAL ESTATE TRANSACTIONS § 5:11 Client’s purpose in buying 

or selling – Time of essence.

We emphasize the circuit court’s conclusion that the Lessees had four 

years to obtain financing and to otherwise prepare for the purchase. This included 

a one-year extension of the lease’s original term. In addition, it appears that the 

parties here are sophisticated corporate entities, presumably well-versed in 

managing real estate agreements. In any event, in the absence of clear and binding 

authority to the contrary, we cannot conclude that the circuit court erred in this 

instance. Therefore, we affirm the circuit court as to Case One. We will now 

address whether the circuit court correctly determined that Case Two was an 

impermissible attempt to “split” the causes of action.

“[T]he rule against splitting causes of action precludes successive 

actions arising from one transaction.” Moorhead v. Dodd, 265 S.W.3d 201, 203 

(Ky. 2008).

Thus, the rule against splitting claims is nothing more 

than that aspect of res judicata which requires the court 

to determine the scope of the prior claim; i.e., to decide if 
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the second action involves issues which should have been 

litigated in the first action, but were not.

Coomer v. CSX Transp., Inc., 319 S.W.3d 366, 371 n.9 (Ky. 2010) (citation 

omitted). “Application of res judicata, being a question of law, is . . .

reviewed under the de novo standard.” Humber v. Lexington-Fayette Urb. Cnty.

Gov’t, 553 S.W.3d 273, 276 (Ky. App. 2018) (citation omitted). To be clear, we 

are specifically concerned here with claim preclusion.

The doctrine of res judicata is formed by two subparts: 

1) claim preclusion and 2) issue preclusion. Claim 

preclusion bars a party from re-litigating a previously 

adjudicated cause of action and entirely bars a new 

lawsuit on the same cause of action.

. . . .

For claim preclusion to bar further litigation, certain 

elements must be present. First, there must be identity of

the parties. Second, there must be identity of the causes

of action. Third, the action must have been resolved on

the merits.

Id. at 277 (citations and footnote omitted) (citing Yeoman v. Commonwealth,

Health Policy Bd., 983 S.W.2d 459, 464-65 (Ky. 1998)). Both cases at issue here 

involve identical parties. It is undisputed that Case One was resolved on the 

merits. The only remaining element of a traditional claim preclusion analysis is 

whether there is sufficient identity of the causes of action. 

However, the more precise question we must resolve here, is whether 

a declaratory claim(s) (Case One), bars a subsequent coercive claim(s) (Case Two). 
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Under the specific pleadings at issue here, we conclude that it does not. In so 

holding, we find the following case law instructive: “Claim preclusion generally 

does not apply to declaratory judgments.” Cont’l Cas. Co. v. Indian Head Indus.,

Inc., 941 F.3d 828, 835 (6th Cir. 2019) (citing ASARCO, L.L.C. v. Montana Res.,

Inc., 858 F.3d 949, 955 (5th Cir. 2017)). See also Strunk v. Bennett, 258 S.W.2d 

517, 519 (Ky. 1953) (holding that judgment in earlier suit to cancel leases did not 

preclude subsequent conversion suit because, “[t]here was really no conversion (as 

alleged) until after the court had adjudged the instruments to be void”); Cooke v.

Gaidry, 309 Ky. 727, 218 S.W.2d 960 (1949) (holding that the judgment in 

declaratory judgment action was not res judicata of matters which could have been 

adjudicated but were not); Coomer, 319 S.W.3d at 372 (noting the “number of 

exceptions” to the rule against splitting causes of action); and 50 C.J.S. Judgments 

§ 928 (March 2023 Update). We now return to the substantive pleadings at issue 

here.

Case One is a petition for a declaration of rights under the option to 

purchase provision of the Lease. By contrast, Case Two pleaded the following: 

breach of contract, conversion, damages, and fees. These causes of action and 

request for relief resulted from Lessees’ alleged wrongful withholding of rental 

income, property damage, etc. In consideration of the aforementioned case law, 
-7-

secondary source material, and the specific pleadings and procedural history at 

issue here, we conclude that Case One does not preclude Case Two. 

CONCLUSION

For the foregoing reasons – and in consideration of the record, the 

law, and the arguments presented – we affirm the Franklin Circuit Court’s opinion 

and order entered on August 31, 2021. We reverse the court’s order entered on

May 10, 2022, and remand for further proceedings consistent with the decision. 

ALL CONCUR.

BRIEFS FOR 

APPELLANTS/APPELLEES 

SAKURA, LTD. AND CHRIS 

ARDELT:

Christopher P. Farris 

Lexington, Kentucky 

BRIEFS FOR 

APPELLEE/APPELLANT KAY-JEN 

INVESTMENTS, LLC:

Matthew W. Forsythe

Carmel, Indiana