Court Opinion

ID: 9368231
Source: CourtListenerOpinion
Date Created: 2023-02-03 15:05:26.615034+00
Date Added: 2024-06-11T17:16:07.412356
License: Public Domain

RENDERED: JANUARY 27, 2023; 10:00 A.M.
                  NOT TO BE PUBLISHED

           Commonwealth of Kentucky
                  Court of Appeals

                    NO. 2020-CA-1608-MR

PAULA GOFF; BETTY MCCOWN;
JIM MOORE; JOHN M. LAWRENCE
REVOCABLE TRUST; AND
LEANNA GLADDEN                                      APPELLANTS

             APPEAL FROM PIKE CIRCUIT COURT
v.          HONORABLE THOMAS M. SMITH, JUDGE
                  ACTION NO. 14-CI-01381

ELIZABETH ANN ROWE EWERS;
BETTY M. HAMILTON FAMILY
TRUST; BILLY PAUL ROWE; CHRIS
JOHNSON; COUNTY OF PIKE; JUDY
ROWE KEEN; KENNETH D.
MOORE; KENTUCKY
DEPARTMENT OF REVENUE;
MARK RUSTIN ROWE; MISTY
ROWE POTTER; PILGRIM ENERGY,
LLC; STEWART O. LECROY; AND
TAXCO, LLC                                           APPELLEES

                    OPINION AND ORDER
                        DISMISSING

                         * * * * * *

BEFORE: GOODWINE, KAREM, AND TAYLOR, JUDGES.
TAYLOR, JUDGE: Paula Goff, Betty McCowan, Jim Moore, John M. Lawrence

Revocable Trust, and Leanna Gladden (collectively referred to as appellants) bring

this appeal from an October 27, 2020, order of the Pike Circuit Court granting

Chris Johnson’s Kentucky Rules of Civil Rules (CR) 60.02 motion to set aside an

order entered October 2, 2019, confirming a foreclosure sale of real property by the

master commissioner. For the reasons stated, we dismiss this appeal as being taken

from an interlocutory order.

             This action has a complex procedural history, so we will only recite

those facts necessary to resolve this appeal. Appellants and appellees are owners

of an undivided oil and gas estate in some 400 acres of real property (oil and gas

estate) and/or are third-party purchasers of certificates of delinquency for unpaid

ad valorem taxes assessed against the oil and gas estate.

             Appalachian Investments, LLC, had purchased three certificates of

delinquency and filed a foreclosure action to enforce its liens upon the oil and gas

estate on December 30, 2014. Kentucky Revised Statutes (KRS) 134.490. In its

amended complaint, Appalachian named Chris Johnson as a defendant, who had

also purchased a certificate of delinquency for unpaid ad valorem taxes assessed

upon the oil and gas estate. Johnson filed an answer and cross-claim. In the cross-

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claim, Johnson stated that he possessed a certificate of delinquency and also sought

to enforce his lien upon the oil and gas estate.1

              Sometime in 2019, appellants purchased the lien claims held by

Appalachian. On April 24, 2019, appellants filed a Motion for Realignment of

Parties and to Reassign for Court Sale. Therein, appellants stated that they had

obtained an assignment of the liens held by Appalachian by purchasing same. As a

consequence, appellants sought to be reclassified as plaintiffs in place of

Appalachian. Appellants failed to serve Johnson or his attorney a copy of this

motion.

              By order entered June 3, 2019, the circuit court granted appellants’

motion and also ordered the oil and gas estate to be sold again by the master

commissioner. The order was prepared by appellants’ attorney and did not provide

for service on Johnson or his attorney. Subsequently, on August 28, 2019, the

master commissioner conducted the sale and filed a Report of Sale with the court

on that date. Therein, the master commissioner reported that the oil and gas estate

was sold for $17,000 to appellants. Appellants then filed a motion to confirm the

1
 On April 12, 2017, an in rem judgment and order of sale of the oil and gas estate was rendered
and a sale was conducted on May 31, 2017. Chris Johnson was duly noticed as a party in that
order. The judgment and order of sale was appealed to the Court of Appeals, said appeal being
dismissed by order entered December 15, 2017, for failure to name indispensable parties (No.
2017-CA-0858-MR). By order entered November 19, 2018, the order confirming the May 31,
2017, sale was set aside by the circuit court, and a new sale was ordered. The circuit court
emphasized that adequate notice be given to all parties in accordance with applicable law.

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sale and to order the master commissioner to deliver a deed conveying the oil and

gas estate to appellants, without notice to Johnson or his attorney. Ultimately, by

order entered October 2, 2019, the circuit court confirmed the sale and ordered the

master commissioner to deliver a deed conveying the oil and gas estate to

appellants. Again, neither Johnson nor his attorney were served a copy of the

order.

             Some eleven months later, on September 9, 2020, Johnson, by

counsel, filed a Motion to Set Aside Master Commissioner Sale and Deed and later

filed an Amended Motion to Set Aside Master Commissioner Sale and Deed.

Therein, Johnson claimed:

                    2. Chris Johnson purchased a 2014 Tax Bill
             00073G in the name of Elizabeth Ewers and has been a
             party to this action since its inception and has filed
             pleadings, appeared at hearings and was actively
             involved prior to the appeal. At no time has Mr.
             Johnson’s lien been purchased or released. Nor has the
             undersigned withdrawn from this case and received
             pleadings and notices from opposing counsel including
             Mr. Webster and the Master Commissioner. However, it
             appears that Mr. Webster stopped including the
             undersigned counsel in late 2018 or early 2019 copies of
             his pleadings.

                   3. According to Mr. Webster[,] Paula Goff, and
             others purchased the liens held by Appalachian
             Investments, LLC[,] sometime prior to April 24, 2019[,]
             in which Webster used as a basis to file a Motion For
             Realignment of Parties and to [reassign] for Court Sale.
             Mr. Webster FAILED to provide notice to the
             undersigned or his client Chris Johnson. Attached is a

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             copy of the Motion where Mr. Webster FAILED to
             notify the attorney of record James Hamilton and the
             Order prepared by Mr. Webster also omitted Mr.
             Hamilton from the certificate of service. . . .

                   4. The Master Commissioner also failed to notify
             James Hamilton or Chris Johnson of the sale despite
             Court Orders and notice requirements under Kentucky
             law. However, the Master Commissioner did notify Mr.
             Hamilton as to the first Master Commissioner sale in
             2017. . . .

                    5. Mr. Webster failed to include James Hamilton
             on his Motion to Confirm Sale and for Deed dated
             September 11, 2019. . . . Yet, Mr. Webster knew all
             along that James Hamilton represented Chris Johnson as
             he included Hamilton on his Objection and Exceptions to
             Sale and Report of Sale on June 6, 2017[,] and various
             other motions. . . . Also, see Mr. Webster’s Motion to
             Assign for Trial on issues of fact dated Feb. 21, 2017[,]
             in which James Hamilton was included on the service of
             process. . . .

                   6. Once Mr. Webster had the parties names
             changed by Motion for Realignment unbeknownst to the
             undersigned, Mr. Webster and others failed to notify the
             undersigned of any court activity.

Amended Motion to Set Aside Master Commissioner Sale and Deed at 1-2.

Johnson specifically sought to set aside the sale under CR 60.02(a), (d), and (f).

             By order entered October 27, 2020, the circuit court granted the CR

60.02 motion to set aside the master commissioner sale and deed “due to lack of

notice of sale (to Johnson or his attorney) and irregularities of the previous sale.”

October 27, 2020, Order at 1. The court further held Johnson’s lien claim was still

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valid and appellants had the option to avoid another commissioner sale of the oil

and gas estate “by satisfying Chris Johnson’s lien.” October 27, 2020, Order at 1.

If the lien was not satisfied, the court order stated that the oil and gas estate would

be resold by the master commissioner. In response, on November 25, 2020,

appellants filed a Notice of Appeal in the Court of Appeals from the October 27,

2020, order.

               In Kentucky, the general rule is that an order setting aside a judgment

and reopening the action for further proceedings is interlocutory and not final and

appealable. Hackney v. Hackney, 327 S.W.2d 570, 571 (Ky. 1959); Black Forest

Coal, LLC v. GRC Dev., LLC, 483 S.W.3d 378, 380 (Ky. App. 2015); see also 7

David V. Kramer, Kentucky Practice – Rules of Civil Procedure § 60.02 (2022).2

               We have thoroughly reviewed the extensive record in this case. The

record establishes that on September 9, 2020, Johnson filed a motion under CR

60.02(a), (d), and (f), to set aside the October 2, 2019, order confirming sale. The

premise of the motion was that neither Johnson nor his attorney were properly

2
 In Asset Acceptance, LLC v. Moberly, 241 S.W.3d 329, 332 (Ky. 2007), the Kentucky Supreme
Court recognized the general rule that an order setting aside a judgment and reopening the case is
nonfinal. However, the Supreme Court also set forth an exception to the general rule. Under this
exception, the Supreme Court permitted an immediate appeal from such an order “where the
disrupted judgment [was] more than one year old, and where the reason offered for setting it
aside” was extraordinary circumstances per Kentucky Rules of Civil Procedure 60.02(f). Id. at
334. Additionally, it must be noted that the judgment set aside was a default judgment and that
appellant alleged that due to mental incapability she was unaware of the notice concerning the
action. As to the case at hand, we believe this exception to be inapplicable.

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notified of the sale that occurred on August 28, 2019. On October 27, 2020, the

circuit court granted the CR 60.02 motion and set aside the sale. The record

reflects that appellants failed to follow the directives set forth in that order and did

not satisfy Johnson’s lien on the oil and gas estate; thus, per the October 27, 2020,

order, the oil and gas estate was to be resold by the master commissioner. That

sale apparently did not occur due to the filing of this appeal. Under these facts, as

a matter of law, we must conclude that the October 27, 2020, order is interlocutory

and nonappealable.

             Now, therefore, be it ORDERED that Appeal No. 2020-CA-1608-MR

is hereby DISMISSED as having been taken from a nonfinal interlocutory order.

             ALL CONCUR.

 ENTERED: _________________                      ___________________________
                                                 JUDGE, COURT OF APPEALS

BRIEF FOR APPELLANTS:                             BRIEF FOR APPELLEES:

Lawrence R. Webster                               James L. Hamilton
Pikeville, Kentucky                               Pikeville, Kentucky

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