Court Opinion

ID: 4200124
Source: CourtListenerOpinion
Date Created: 2017-08-30 16:09:50.239558+00
Date Added: 2024-06-11T14:41:31.745460
License: Public Domain

IMPORTANT NOTICE
        NOT TO BE PUBLISHED OPINION

THIS OPINION IS DESIGNATED "NOT TO BE PUBLISHED."
PURSUANTTOJHE RULES OF CIVIL PROCEDURE
PROMULGATED BY THE·SUPREME COURT, CR 76~28(4)(C),
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CITED OR USED AS BINDING PRECEDENT IN ANY OTHER
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RENDERED AFTER JANUARY 1, 2003, MAY BE CITED FOR
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                                             RENDERED: JUNE 15, 2017
                                                NOT TO BE PUBLISHED

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                         2016~SC-000462-MR.  r:r-w~ ~
DAWN SPALDING-MCCAULEY

                . ON APPEAL FROM COURT OF APPEALS           "
V.                     CASE NO . 2016-CA~000421
               TAYLOR CIRCUIT COURT NO. 14-Cl-00047

HON. SAMUEL TODD SPALDING, JUDGE                           APPELLEE
TAYLOR.CIRCUIT COURT

AND

BETTY DAMERON, INDIVIDUALLY                REAL PARTIES IN INTEREST
AND AS EXECUTRIX OF THE ES.TATE
OF PAUL DAMERON; MIKE. BREEN;
AND MIKE BREEN, ATTORNEY AT LAW, P.S.C .

AND                     .2016-SC-000463-MR

BETTY DAMERON,INDIVIDUALLY.                             APPELLANTS
AND AS EXECUTRIX OF THE; ESTATE
OF PAUL DAMERON; MIKE BREEN;
AND MIKE BREEN, ATTORNEYAT LAW, F'.S.C

                ON APPEAL FROM COURT OF APPEALS
V.                   CASE NO. 2016-CA-000308
               TAYLOR CIRCUIT COURT NO. 14-CI-00047

HON. SAMUEL TODD SPALDING, JUDGE                         APPELLEES
TAYLOR CIRCUIT COURT;

AND

DAWN SPALDING-MCCAULEY                        REAL PARTY IN INTEREST
                  MEMORANDUM OPINION OF THE COURT

                                  AFFIRMING

      On July 24, 2013, Paul Allen Dameron died as a result of injuries he

sustained while driving his vehicle in Taylor County, Kentucky. The injuries ,

were caused by a rock that was propelled through Mr. Dameron's windshield.

The rock was thrown from a Bush Hog mower operated by Terry Mattingly.

      Betty Dameron ("Dameron") is Mr. Dameron's surviving spouse and the

Executrix of his Estate. She entered into a written agreement with attorney

Dawn Spalding-McCauley ("McCauley") to represent her and the Estate. On

February 8, 2014, McCauley filed a wrongful death sufr on behalf of her clients

in Taylor Circuit Court. Dameron subsequently terminated McCaule:fs

representation and hired attorney Mike Breen ("Breen") to handle the case

moving forward. Breen entered his appearance in the case and the court

issued an order permitting McCauley to withdraw as counsel of record.

      During the summer of 2014, Breen entered into a settlement agreement

with Mattingly's insurance carrier for $1,000,000.00 and also entered into an

agreement with Paul Dameron's insurance provider for $100,000.00. Breen

received $385,000.00 in attorney fees plus additional expenses.

      On September 3, 2014, Breen filed a motion to apportion the proceeds of

the wrongful death claim be~ause Dameron and her step-daughter could not

agree on the appropriate dispensation of the proceeds. McCauley, Dameron's

first attorney, also filed_ a motion to intervene under the theory o(quantum

meruit and to attach the attorney fees paid to Breen. The trial court entered an

                                       2
order allowing McCauley to intervene. McCauley also filed a notice.of an

attorney lien. The court ordered that the proceeds of the wrongful death action

and· attorney fees be held by the court pending further orders.

       Dameron subsequently filed a KBA complaint against McCauley.

Discovery revealed that Breen's office assisted in the preparation of the KBA

complaint. As a result, McCauley filed a motion to compel the production of all

written correspondence between Breen and Dameron regarding the alleged

breach of McCauley's ethical duties.

      The trial court gr~ted the motion to compel and concluded that the

attorney-client privilege was waived because Breen and Dameron had made the

communications. an issue by alleging that McCauley had been discharged for

cause as a defense to McCauley's quantum meruit claim. See Baker v.

Shapero, 203 S.W.3d 697 (Ky. 2006). Breen filed a motion to reconsider which

was denied by the trial court.

      The parties filed cross petitions, each seeking a writ of prohibition. The

Court of Appeals denied the writ requests and the parties appealed to this

Court. Case Nos. 2016-SC-000462-MR and 2016-SC-000463-MR. Having

reviewed the facts and the law, we affirm the Court of Appeals' denial of the

petitions.

                                 Procedural Issues

      Dameron and Breen have filed motions for oral argument. Having

considered the motions, the responses, and being otherwise sufficiently

advised, the parties' motions for oral argument are hereby DENIED. On its

                                        3
 own motion, the Court orders that Case Nos. 2016-SC-000462-MR and 2016-

 SC~00_0463-MR are hereby CONSOLIDATED.

                                  Standard of Review

        An appellate court has discretion to grant a writ where a trial court is

 proceeding within its jurisdiction upon a showing that the court is: 1) acting or

 is about to act erroneously; 2) there exists no adequate remedy by appeal or

 otherwise, and 3) great injustice and irreparable injury will result if the petition

 is not granted. Hoskins v. Maricle, 150 S.W.3d 1,      io (Ky. 2004).   We review the

 Court of Appeals' determination under an abuse of discretion standard.

 Sowders v, Lewis, 241 S.W.3d 319, 322 (Ky. 2007) ..

                              Case No. 2016-SC~463-MR

        Breen and Dameron seek a writ "prohibiting the trial court from

 enforcing ~y orde.rs ·requiring Dameron or Breen to testify about or disclose ·

 the confidential communications, and prohibiting him from enforcing any

 orders requiring Mr. Breen to withhold his fee." They argue that the

 compulsion of this information violates the attorney-client privilege. We have

 previously held that "violaj:ion of a privilege satisfies both the requirement of no

 adequate remedy by appeal, 'because privileged information cannot be recalled

 once it has ·been disclosed,' and the substitute requirement in 'special cases'

 that the administration of justice would suffer." Collins v. Braden, 384 S.W.3d

. 154, 158 (Ky. 2012j (citing St. Luke Hospitals, Inc. v. Kopowski, 160 S.W.3d
771, 775 (Ky. 2005)). Because the present case alleges a violation of the

 attorney-client privilege, it is proper for writ review.

                                           4
        We begin by noting that the trial court specifically ordered the production

of "all written correspondence, including emails, between [Breen] and Betty

Dameron as it pertained to any alleged breach of attorney McCauley's ethical

duty to Betty Dameron." The order continued as follows: "the Court concludes

that attorney McCauley should have the ability to cross-examine attorney

Breen concerning the dismissal [of the defendant Bush Hog] because such

questions will be relevant and fundamental fairness requires same." Therefore,

Breen and Dameron's broad assertion that the court ordered them "to testify"

about the confidential communications at issue here is unfounded.

        KRE 503 provides: "A client has a privilege to refuse to disclose and to

prevent any other person from disclosing a confidential communication made

foi: the purpose of facilitating the rendition of professional legal services to the

client[.]" However, KRE 503 (d)(3) states that there is no privilege for "a

communication relevant to an issue of breach of duty by a lawyer to the client

or by a client to the lawyer[.]" In 3M v. Engle, we observed that "a client 'waives

the privilege if he ... voluntarily discloses or consents to disclosure of any·

significant part of the privilege matter.'. This waiver may be explicit, but it may

also be implied." 328 S.W.3d 184, 188 (Ky. 2010) (Internal footnotes omitted).

The Court of Appeals applied our ruling in Engle in its analysis of the present

case:

        As the trial court noted, Breen did not purport to represent
        Dameron in the KBA complaint proceeding. The KBA complaint
        was written and signed by Dameron and not by Breen. Therefore,
        we conclude that any communications between Dameron and
        Breen regarding the 'KBA complaint were not for the purpose of
        "facilitating the rendition of professional legal services." Further,
        the communications at issue concerned the breach of a duty by
                                          5
       McCauley to Dameron. Therefore, there is no privilege under KRE
       503(d)(3). Moreover, even if the privilege applied, such privilege
       was waived because Dameron had placed the communications at·
       issue by asserting that McCauley was terminated for cause in
       defense to the quantum meruit claim. We cannot conclude that
       the. trial court abused its discretion by rejecting the claim of
       privilege.

We agree with the Court of Appeals' reasoning and conclusion.

       Breen and Dameron also request a writ prohibiting the trial court from

enforcing its_ order withholding Breen's attorney fees pursuant to KRS 425.011.

They argue that the court's order constitutes an unconstitutional taking of

property resulting in irreparable injury. As correctly 'noted by the Court of

Appeals, however, "the validity of prejudgment attachments may be adequately

remedied upon direct appeal." Therefore, Dameron and Breen have failed to

demonstrate the lack of an adequate remedy by appeal. This issue also fails to

satisfy our "special case" exception.

                           Case No.·2016-SC-462-MR

      Attorney McCauley argues the trial court acted outside its jurisdiction

when it ordered a jury trial on her quantum meruit claim. She alternatively

argues that the trial court acted erroneously within itsjurisdiction by ordering

a jury trial. McCauley specifically alleges that quantum meruit seeks· an

equitable remedy for which there is no right to a jury trial.

      We agree with the Court of Appeals' conclusion that "the circuit court

clearly has subject-matter jurisdiction over cases involving a claim of quantum

meruit;" Therefore, we must determine whether relief is available under the .

second class of writ actions-where the trial court was acting within its

jurisdiction.
                                         6
       It is well-established that "[t]he right to trial by jury has occupied a

central place in our jurisprudence." B.F.M. Bldg., Inc. v. Trice, 464 S,W.2d 617,

619 (Ky. 1971). In civil cases, however, "Kentucky law recognizes exceptions to

the right to a jury, including causes of action at common law that would have

been regarded as arising in equity rather than law." Daniels v. CDB Bell, LLC,

300 S.W.3d 204, 210 (Ky. App. 2009) (citing Reese's Administrator v.

Youtsey,113 Ky. 839, 69 S.W. 708 (Ky. 1902)); and Steelvest, Inc. v. Scansteel

Service Center, Inc., 908 S.W.2d 104, 108 (Ky. 1995). Therefore, "[i]f the nature

of the issues presented is essentially equitable, no jury trial is available. Id.

(citing Meyers v. Chapman Printing Co., Inc., 840 S.W.2d 814 (Ky. 1992)).

      Although the underlying issue in Daniels was a claim seeking to pierce

the corporate veil, it provides an apt analogy to the present case. Quantum

meruit is a common law action in equity. And although we have never

addressed this issue directly, we have previously embraced the.Court of

Appeals' decision in Daniels and adopted much of its language verbatim. See

Schultz v. General Electric Healthcare Financial Services Inc., 360 S.W.3d 171,

174-76 (Ky. 2012).

      Furthermore, we stated in Baker v. Shapero that "when an attorney

employed under a contingency fee contract is discharged·without cause before

completion of the contract, he or she is entitled to fee recovery on a quantum

meruit basis only, and not on the terms of the contract." 203 S.W.3d at 699.

Several Kentucky cases indicate that this determination is most appropriately

decided by the trial court. See id.; and e.g., Lofton v. Fairmont Specialty

Insurance Managers, Inc., 367 S.W.3d 593 (Ky. 2012).
                                         7
    1
        Therefore, we agree that the trial court committed clear error here by

ordering this case tried before a jury. H_owever, in order to prevail on her writ

petition, McCauley must demonstrate that there exists no adequate ,remedy by

appeal or otherwise, and that a great injustice and irreparable injury will result

if the petition is not granted. McCauley asserts that there is no adequate

remedy by appeal here because the bar complaint against her would be

admitted as evidence in the jury trial and that attorney discipline matters are

confidential unless public sanction is imposed. Supreme Court Rule (SCR)

3.150.

        We·have previously defined "no adequate remedy by appeal or otherwise"

to mean that the injury to be suffered "could not therefore be rectified in

subsequent pro<:eedings in the case." Bender v. Eaton, 343 S.W.2d 799, 802

(Ky. 1961). According to McCauley, her reputation in the community would be

diminished if this information was made public. McCauley also argues that

jurors are not qualified to make equitable determinations.

        As correctly noted by the Court of Appeals, "Li]uries are routinely

expected to adjudge the conduct of attorneys ii.) complex situations such as

legal malpractice cases_." We do not believe the mere evidence that a bar

complaint has been filed against McCauley is sufficient to cause irreparable

harm which justifies a writ. We also note that the trial court entered an agreed

order sealing any documents referring to the KBA file and reserving the right to

rule on the admissibility of any information pertaining to the KBA file prior to

the jury trial. What is critical to our analysis here, however, is that McCauley

may appeal the trial court's jury trial order and, if successful, she may retry
                                        ' 8
the case before the trial court without a jury. Therefore, there is a clear and

adequate remedy by appeal here. Compare Co7Jtmonwealthv. Green, 194
S.W.3d 277, 280 (Ky. 2006) ("If the district court proceeds with a bench trial,

as has been ordered, jeopardy will attach and retrial by a jury will be

prohibited under KRS 505.030. This alone is sufficient to demonstrate the lack

of an adequate remedy by appeal.").

      Moreover, there is no great injustice and irreparable injury here. We

have defined "great and irreparable" injury as "something of a ruinous

nature." Bender, 343 S.W.2d at 801. Similar_ to the previous issue, 'we cannot

conclude that the potential for publicity here would be "ruinous" to McCauley.

      McCauley also insists that tgis case satisfies the "special case" exception

to our writ standard. However, "our case law is clear that the certain-special-

cases exception only .supplants the requirement that a petitioner prove

irreparable harm in the absence of a writ, not the requirement that there be no

adequate remedy by appeal or otherwise." Ridgeway Nursing & Rehabilitation

Facility, LLC v. Lt;ine, 415 S.W.3d 635, 641-42 (Ky. 2013) (citing Bender, 343
S.W.2d at 801). As previously discussed, McCauley has failed to demonstrate

the absence of an adequate remedy on appeal. Accordingly, the Court of

Appeals did not abuse its dis·cretion in denying McCauley's petition.

      Although our writ standard has not been satisfied here, we are compelled

to repeat our strong admonition that the trial judge is committing "clear error"

if he proceeds with a jury trial on a quantum meruit claim. The only role a jury

could possibly have in this action in equity would be as an advisory jury on

issues of fact pursuant to Kentucky Rule of Civil Procedure 39.03. _See Barrier
                                       9
 v. Brewster, 349 S.W.3d 823 (Ky. 1961) (the "issues" that can be tried by an

 advisory jury are only issues of fact and the_ judge cannot delegate his

 discretion or equitable function).

                                      Conclusion

       For_ the foregoing reasons, we affirm the Court of Appeals' denial of the

 petitions seeking a writ 9f prohibition filed in Case Nos. 2016-SC-000462-MR

 and 2016-SC-000463-MR.

       All sitting.   All concur.

 COUNSEL FOR APPELLANT/REAL PARTY IN INTEREST, DAWN SPALDING-
 MCCAULEY:                                              .

 David A. Nunery
 Steven Casey Call
 NUNERY & CALL, PLLC

 APPELLEE:

· Hon. Samuel Todd Spalding
  Judge, Taylor Circuit Court

 COUNSEL FOR APPELLANT/REAL PARTY IN INTEREST, BETTY DAMERON,
 INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF PAUL DAMERON:

 Michael Anthony Breen
 Michael Anthony Breen, Attorney at Law, PSC

 COUNSEL FOR APPELLANTS/REAL PARTIES IN INTEREST, MIKE BREEN
 AND MIKE BREEN, ATTORNEY AT LAW, P.S.C.:

Michael Anthony Breen
Attorney at Law

James Hadden Dean
Sheehan, Barnett, Dean, Pennington, Little & Dexter, PSC
                                      .                     '
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