Court Opinion

ID: 9390707
Source: CourtListenerOpinion
Date Created: 2023-04-28 14:05:01.086289+00
Date Added: 2024-06-11T17:18:35.895674
License: Public Domain

RENDERED: APRIL 21, 2023; 10:00 A.M.
                  NOT TO BE PUBLISHED

           Commonwealth of Kentucky
                  Court of Appeals

                     NO. 2022-CA-0039-MR

HAZEL ENTERPRISES, LLC                              APPELLANT

            APPEAL FROM WHITLEY CIRCUIT COURT
v.           HONORABLE DANIEL BALLOU, JUDGE
                   ACTION NO. 20-CI-00564

DENNIS R. FAULKNER; CAROL A.
POWELL; GEORGE FAULKNER;
PEARL FAULKNER; SANDRA L.
BENSON; TAXCO, LLC; UNKNOWN
SPOUSE, IF ANY, OF CAROL A.
POWELL; UNKNOWN SPOUSE, IF
ANY, OF DENNIS FAULKNER;
UNKNOWN SPOUSE, IF ANY, OF
SANDRA L. BENSON; AND
WHITLEY COUNTY, KENTUCKY                            APPELLEES

                          OPINION
                         AFFIRMING

                         ** ** ** ** **

BEFORE: THOMPSON, CHIEF JUDGE; ACREE AND MCNEILL, JUDGES.
MCNEILL, JUDGE: Appellees, George Faulkner and his wife, Pearl Faulkner (the

Faulkners), own real-estate in Whitley County, Kentucky. The Faulkners failed to

pay the property taxes that were assessed on their property for the 2009 tax year.

As a result, Appellant, Hazel Enterprises, LLC, (Hazel), purchased a certificate of

delinquency for those unpaid taxes from the county. In 2015, Hazel and the

Faulkners entered into an agreement to pay the amount owed on the debt over a

period of several years. The agreement included the assessment of the taxes,

interest, and various fees. The total amount owed under the agreement was

$2,266.20.

             Although the parties agree that the Faulkners made payments, the

amount owed remains unclear. Hazel filed suit in Whitley Circuit Court on

December 31, 2020, seeking to foreclose on the Faulkners’ property due to an

alleged deficit in payment. For reasons that remain unclear, Hazel named the

incorrect defendants in that suit. Hazel filed an amended complaint on January 15,

2021, which included the correct defendants – the Faulkners, et al. Therein, Hazel

requests that collateral property be sold at public auction and for the payment of

$237.53 plus interest, as well as administrative and attorney’s fees.

             The Faulkners filed a motion to dismiss for failure to state a claim on

the basis that the statute of limitations (SOL) had run. The trial court held a

hearing on the matter and granted the motion to dismiss. The court specifically

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concluded that the “relates back” provisions of CR1 15.03 did not apply here, and

that although the pro se answer failed to assert the statute of limitations defense,

Kentucky law permits the Faulkners to subsequently raise that defense. See

Underwood v. Underwood, 999 S.W.2d 716 (Ky. App. 1999). To be clear, the

Faulkners eventually retained counsel, who then filed the motion to dismiss. In

dismissing the tax lien case, the trial court further determined that a contract case

between the parties was viable and could proceed. Hazel filed a motion to alter,

amend, or vacate, which was denied. Hazel appeals to this Court as a matter of

right. For the foregoing reasons, we affirm.

                                         ANALYSIS

                “[A] motion to dismiss for failure to state a claim upon which 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) (citation omitted). First, we

deny Hazel’s motion to strike the Faulker’s brief for failure to conform to the rules

of appellate procedure. As to the merits of the appeal, we agree with the trial court

that Underwood applies here. Therein, the Court observed that the proposition

that, “[a]lthough failure to plead the statute of limitations constitutes a waiver of

that defense, if the complaint on its face shows that the action is barred by time, the

1
    Kentucky Rules of Civil Procedure.

                                            -3-
statute of limitations may be raised by a motion to dismiss.” Underwood, 999

S.W.2d at 720 (citing Tomlinson v. Siehl, 459 S.W.2d 166 (Ky. 1970)). The SOL

at issue here is eleven years from the date the taxes became delinquent. KRS2

134.420(1). The taxes were assessed in 2009. The trial court concluded that the

parties agreed that the SOL expired on January 1, 2021. The amended complaint

was filed on January 15, 2021.

                The reasoning here appears to be that 2009 taxes became delinquent,

at the latest, on January 1, 2010. That date triggered the SOL which, again,

expired on January 1, 2021. However, Hazel disputes this and argues that the SOL

expired “sometime” in 2021, because the date the taxes became delinquent is

ambiguous and should be assessed on a case-by-case basis. In the absence of any

binding authority to the contrary, we agree that a natural and logical date to trigger

the SOL here would be January 1, 2010. To be clear, we do not opine as to the

effective date of any other taxes, including property taxes, that may differ based on

the specific facts and applicable law in subsequent cases not at issue here.

                We also agree with the trial court that CR 15.03 does not apply here.

It provides in relevant part as follows:

                (1) Whenever the claim or defense asserted in the
                amended pleading arose out of the conduct, transaction,
                or occurrence set forth or attempted to be set forth in the

2
    Kentucky Revised Statutes.

                                            -4-
             original pleading, the amendment relates back to the date
             of the original pleading.

             (2) An amendment changing the party against whom a
             claim is asserted relates back if the condition of
             paragraph (1) is satisfied and, within the period provided
             by law for commencing the action against him, the party
             to be brought in by amendment (a) has received such
             notice of the institution of the action that he will not be
             prejudiced in maintaining his defense on the merits, and
             (b) knew or should have known that, but for a mistake
             concerning the identity of the proper party, the action
             would have been brought against him.

Hazel does not cite any persuasive evidence indicating that the Faulkners “knew or

should have known” that they were the proper parties to the original suit. And

whatever notice the Faulkners are alleged to have received, would be eclipsed by

the prejudice they will endure if the lien case were to proceed – a decade after their

delinquency. More precisely, their home would be sold at auction to pay an

unspecified amount on a contract, initially worth $2,266.20, without deduction for

any payments made. In any event, in the absence of clear and binding authority to

the contrary, we cannot conclude that the trial court erred in this instance. Based

on the foregoing, and having considered the record and any remaining arguments

not expressly addressed herein, we affirm.

             ALL CONCUR.

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BRIEF FOR APPELLANT:    BRIEF FOR APPELLEES:

David Howard            James H. Wren, II.
London, Kentucky        Williamsburg, Kentucky

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