Court Opinion

ID: 9885786
Source: CourtListenerOpinion
Date Created: 2023-10-06 14:06:14.046882+00
Date Added: 2024-06-11T12:22:30.848610
License: Public Domain

RENDERED: SEPTEMBER 29, 2023; 10:00 A.M.
                       NOT TO BE PUBLISHED

                 Commonwealth of Kentucky
                           Court of Appeals
                              NO. 2022-CA-1494-MR

WILL MCGINNIS                                                     APPELLANT

                  APPEAL FROM FAYETTE CIRCUIT COURT
v.                HONORABLE THOMAS L. TRAVIS, JUDGE
                         ACTION NO. 21-CI-01761

UNIVERSITY OF KENTUCKY AND
KENTUCKY DEPARTMENT OF
REVENUE                                                            APPELLEES

                                     OPINION
                                    AFFIRMING

                                   ** ** ** ** **

BEFORE: CETRULO, KAREM, AND MCNEILL, JUDGES.

CETRULO, JUDGE: This is an appeal from an Order of the Fayette Circuit Court

which granted motions to dismiss filed by Appellees University of Kentucky

Healthcare (“UK”) and the Kentucky Department of Revenue (“DOR”). For

reasons set forth below, we affirm the circuit court.
                                      FACTS

            The facts were set forth in the circuit court order, as follows:

                   In 2013, Plaintiff sought and received medical
            treatment at [UK] and incurred a bill for that treatment
            since Plaintiff did not have insurance at the time. He was
            billed for the services. He thought it was too high and
            should have been covered by the University Assistance
            Program.       Plaintiff had an administrative hearing
            concerning the amount of his bill. The hearing officer
            issued a decision and allowed Plaintiff to submit
            exceptions to the decision (the 2014 Administrative
            Decision). Plaintiff did not appeal the administrative
            decision. Plaintiff has since brought two actions in Fayette
            Circuit Court. The first action was commenced in 2016
            and was dismissed without prejudice due to a lack of
            prosecution. The second action was commenced in 2018
            against Central Kentucky Management Services
            (hereinafter “CKMS”), a non-stock, non-profit
            corporation that performs debt collection services
            exclusively for UK. In that action, Plaintiff alleged a
            violation of due process. CKMS removed that case to
            federal court. The Eastern District Court dismissed
            Plaintiff’s claims in their entirety, holding that Plaintiff’s
            § 1983 claim was barred by sovereign immunity, barred
            by the statute of limitations, and failure to state a claim.
            Now, in this action, the Plaintiff is asking for a declaratory
            judgment and an injunction for the improper taking of his
            money due to overbilling of his 2013 cardiac stress test.
            In his amended complaint, he asserts two claims (1) breach
            of fiduciary duty, and (2) constructive fraud.

            Without that recitation of facts by the circuit court, it might be

difficult to determine exactly what had transpired in the many years of proceedings

below. The brief on behalf of Appellant Will McGinnis (“McGinnis”) fails to

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comply with Kentucky Rule of Appellate Procedure (“RAP”) 321 in multiple and

critical ways. Neither the statement of the case nor the argument section contain

any citation to the record. There is no citation to legal authority in support of any

of the arguments. There are vague allegations and references to alleged

conspiracies, due process violations, and separate class actions, with no case

numbers or captions provided. There is even a request that this Court order a

criminal investigation into $50 million allegedly collected in medical bills from

others who are not a part of this proceeding. Obviously, our ability to review those

vague allegations is limited.

               What is clear, however, is that at every step of the way in the various

filings, McGinnis has been seeking review of, and denying responsibility for, his

UK medical bill for the EKG/stress test performed over 10 years ago. There is no

dispute that he had the test, nor that it was ordered by his physician. He primarily

maintains that the charge was too high and that it should have been covered by

UK’s Financial Assistance Program.

1
  UK points out that the brief on behalf of McGinnis fails to comply with virtually every
requirement of our appellate rules and urges us to review for manifest injustice only. This Court
recognizes that McGinnis is a pro se litigant, but that does not exempt him from the requirement
to follow the rules. Koester v. Koester, 569 S.W.3d 412, 415 (Ky. App. 2019). In Clark v.
Workman, 604 S.W.3d 616, 618-19 (Ky. App. 2020), this Court outlined our options upon such
appellate rule failures and elected to review that case for manifest injustice. While we could
certainly do so in this case, we have elected to simply address the matter on the merits as did the
circuit court.

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             In the latest filing in 2021, the initial complaint did not identify what

cause of action was being asserted. The suit named DOR, but only alleged that UK

had turned collections over to the Revenue Cabinet and that his bank account had

been seized. The circuit court conducted a hearing on the motions to dismiss and

allowed McGinnis to amend the complaint to include the specific causes of action

he was asserting. The amended complaint asserted breach of fiduciary duty and

constructive fraud, again based on the same actions and events complained of in

previous suits. UK and DOR again moved for dismissal of the amended

complaint. Following a second hearing, the circuit court granted the motions of

UK and DOR and denied the motion of McGinnis to release funds, as moot, due to

the dismissal of the underlying claims. This appeal followed.

                            STANDARD OF REVIEW

             The circuit court’s order on a Kentucky Rule of Civil Procedure

(“CR”) 12 motion to dismiss is reviewed de novo, as it presents a pure question of

law. Fox v. Grayson, 317 S.W.3d 1, 7 (Ky. 2010) (citation omitted). The circuit

court is not required to make any factual determinations, but simply to ask, “if the

facts alleged in the complaint can be proved, would the plaintiff be entitled to

relief?” James v. Wilson, 95 S.W.3d 875, 884 (Ky. App. 2002). We owe no

deference to the circuit court on a question of law. Greissman v. Rawlings and

Assocs., PLLC, 571 S.W.3d 561, 565 (Ky. 2019) (citation omitted). Applying that

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standard here, it is clear that the circuit court properly applied the law to the claims

presented.

                                     ANALYSIS

                           A.     The DOR Motion To Dismiss

             Neither the original complaint nor the amended complaint contained

clear allegations against the DOR. McGinnis alleged that UK turned collections

over to the DOR and then later stated that his “bank account was seized” in 2016.

Apparently, he then entered into a payment arrangement of $25.00 per month that

continued for several years, through the time he filed this latest action. That

payment agreement was in 2016, and this lawsuit was filed in 2021.

             It appears that he is asserting an action for an injury to his person,

which would be governed by the one-year statute of limitations set forth in

Kentucky Revised Statute (“KRS”) 413.140(1)(a). Similarly, a one-year statute of

limitations has been applied to declaratory judgment actions, like McGinnis

generally asserted here. See Million v. Raymer, 139 S.W.3d 914, 918-19 (Ky.

2004). The circuit court found that McGinnis’s complaint failed to state any cause

of action against DOR; that the statute of limitations had long since expired on any

such claim; and that McGinnis had failed to exhaust his administrative remedies by

seeking first to appeal any collection activity with the Kentucky Claims

Commission or its predecessor, the Kentucky Board of Tax Appeals. Any one of

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those grounds would be sufficient to determine as a matter of law that McGinnis is

not entitled to relief in this action against the DOR.

             Although the circuit court did not reach the issue of sovereign

immunity, this Court has noted that “an appellate court may affirm the trial court

for any reason sustainable by the record.” Kentucky Farm Bureau Mut. Ins. Co. v.

Gray, 814 S.W.2d 928, 930 (Ky. App. 1991) (citing Richmond v. Louisville &

Jefferson County MSD, 572 S.W.2d 601 (Ky. App. 1978)). As such, along with

the other failures to state a claim, we find the DOR is immune from this type of

suit, pursuant to KRS Chapter 49. That chapter grants exclusive jurisdiction of

such claims to either the Kentucky Board of Claims – KRS 49.040 – or the

Kentucky Board of Tax Appeals. KRS 49.220. There are several reasons, all

sustainable by the record, to affirm the dismissal of DOR.

                               B.     UK Motion to Dismiss

             Similarly, UK set forth at least four reasons why the claims against it

should be dismissed. Going back to the initial question of the validity of the debt,

McGinnis did contest that issue in a prior administrative action and received a

hearing in 2014. McGinnis acknowledges that he did not file a timely appeal from

that determination against him, and the first legal action filed by him was in 2016.

The amended complaint asserted that the 2014 hearing was “unfair” and simply

attempted to relitigate arguments that were previously raised in at least two prior

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actions and which were not raised by an appeal from the prior administrative

ruling. McGinnis had 30 days from the prior administrative agency determination

to appeal to the circuit court. KRS 13B.140(1). He failed to do so and is now

precluded from contesting the validity or existence of his debt, and from asserting

that he did not have an impartial decisionmaker at that hearing nearly 10 years ago.

              “[D]ecisions of administrative agencies acting in a judicial capacity

are entitled to the same res judicata effect as judgments of a court.” Godbey v.

Univ. Hosp. of Albert B. Chandler Medical Ctr., Inc., 975 S.W.2d 104, 105 (Ky.

App. 1998) (citing Barnes v. McDowell, 647 F. Supp. 1307, 1310 (E.D. Ky. 1986),

overruled on other grounds by Thompson v. McDowell, 661 F. Supp. 498 (E.D.

Ky. 1987)). In this instance, McGinnis was barred by his failure to exhaust his

administrative remedies and timely appeal that decision.

              Similarly, the circuit court determined that the matter was barred

under the doctrine of issue preclusion. While “[t]he doctrine of res judicata

prohibits the relitigation of matters which actually were, or could have been,

litigated to a conclusion in an earlier action . . . [t]he doctrine of issue

preclusion . . . allows the use of the earlier judgment by one not party to the

original action to preclude relitigation of matters litigated in the earlier action.”

Godbey, 975 S.W.2d at 105. Res judicata “stands for the principle that once the

rights of [a party] have been finally determined, litigation should end.” Jellinick v.

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Capitol Indem. Corp., 210 S.W.3d 168, 171-72 (Ky. App. 2006) (citation omitted)

(emphasis added).

             In this latest filing, McGinnis sued UK. Previously in 2018, he had

filed suit on the same issues in an action against Central Kentucky Management

Services. CKMS is an affiliated corporation of UK, which performs debt

collection services. The federal court considered and dismissed all of McGinnis’s

claims concerning the validity and amount of the debt and the alleged unfair

decision maker/hearing officer. Therefore, issue preclusion bars the exact

arguments and claims that the United States District Court for the Eastern District

of Kentucky had already considered, and subsequently rejected.

             As mentioned, despite the failure to initially state a claim, the circuit

court permitted McGinnis to amend his initial complaint to set forth the specific

claims he was alleging. He clarified his pleading to allege that his claims were for

constructive fraud and breach of fiduciary duty. Constructive fraud arises through

some “breach of a legal duty which the law would pronounce fraudulent because of

its tendency to deceive others, violate confidence, or injure public interest.”

Kendrick v. Bailey Vault Co., 944 S.W.2d 147, 150 (Ky. App. 1997) (citing Wood

v. Kirby, 566 S.W.2d 751 (Ky. 1978)). McGinnis has not established any breach

of duty nor that any confidential relationship existed between him and UK.

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               A fiduciary duty is “the highest order of duty imposed by law.”

Abbott v. Chesley, 413 S.W.3d 589, 600 (Ky. 2013) (internal quotation marks and

citation omitted). Such a duty “requires more than the generalized business

obligation of good faith and fair dealing.” Ballard v. 1400 Willow Council of Co-

Owners, Inc., 430 S.W.3d 229, 242 (Ky. 2013). In fact, our courts have generally

found the “relationship between a bank and a depositor to be one of debtor-creditor

and do not ordinarily impose a fiduciary duty of disclosure upon the bank.”

Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 485 (Ky. 1991). We

are aware of no case law imposing a fiduciary duty based solely upon a debtor-

creditor relationship or a provider-customer relationship such as existed between

McGinnis and UK. See de Jong v. Leitchfield Deposit Bank, 254 S.W.3d 817 (Ky.

App. 2007), and Seeger Enterprises, Inc. v. Town & Country Bank & Tr. Co., 518

S.W.3d 791, 795-96 (Ky. App. 2017) (citations omitted) (finding relationships

between “a bank and a borrower does not ordinarily impose a fiduciary duty upon

the bank”). McGinnis has not provided any, nor set forth any facts establishing

such a duty.

               “Whether a fiduciary duty exists by virtue of the relationship between

various actors is generally a question of law for the courts to decide as it essentially

involves a policy determination.” Scott v. Forcht Bank, NA, 521 S.W.3d 591, 597

(Ky. App. 2017) (citing Mullins v. Commonwealth Life Ins. Co., 839 S.W.2d 245,

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248 (Ky. 1992). McGinnis did not adequately establish that UK owed any

fiduciary duty to him.

             Finally, the circuit court also noted that even if a claim had been

stated, the claims were barred by the statute of limitations. KRS 413.120(11)

requires an action for fraud to be brought within five years. Similarly, KRS

413.120(6) requires claims for breach of fiduciary duty to be brought within five

years. These claims arose out of a debt assessed 10 years ago and, under Kentucky

law, the statute begins to run as soon as the injury becomes known. McGinnis, at

the latest, had knowledge that the garnishment for the alleged injury occurred in

February 2016, more than five years before this lawsuit was filed in July 2021.

             McGinnis then asserts that the statute of limitations did not run

because there was a “continuing wrong” created by the agreement for continuing

monthly payments of the debt. This “continuing negligence” theory “provides that

where a tort involves a continuing or repeated injury, then the cause of action does

not accrue and the limitations period [does not] begin to run until the date of the

last injury.” Davis v. All Care Med., Inc., 986 S.W.2d 902, 905 (Ky. 1999).

There, the Kentucky Supreme Court declined to adopt the theory in an action

between a purchaser and a vendor of medical supplies, finding that there was no

continuing, ongoing relationship between the two. Id. Indeed, the Court indicated

that Kentucky had not fully adopted the continuing negligence theory. Id.

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             Here, the circuit court properly noted that, if this doctrine applies at

all, it does so when there is a continuing wrong, not an injury that can be traced

back to one alleged wrong. McGinnis has disputed this same charge since he

received the bill in 2013. He has previously attempted to assert claims regarding

that transaction which conceivably fell within the statute of limitations. These

claims, however, were commenced outside of the statute of limitations and are

therefore barred. Thus, we find that the Fayette Circuit Court properly dismissed

the claims against UK and DOR, and the order is therefore AFFIRMED.

             ALL CONCUR.

BRIEF FOR APPELLANT:                        BRIEF FOR APPELLEE
                                            UNIVERSITY OF KENTUCKY:
Will McGinnis, pro se
Lexington, Kentucky                         Bryan H. Beauman
                                            Donald C. Morgan
                                            Lexington, Kentucky

                                            William E. Thro
                                            Lexington, Kentucky

                                            BRIEF FOR APPELLEE
                                            KENTUCKY DEPARTMENT OF
                                            REVENUE:

                                            R. Campbell Connell
                                            Frank L. Dempsey
                                            Frankfort, Kentucky

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