Court Opinion

ID: 4706004
Source: CourtListenerOpinion
Date Created: 2021-07-23 14:06:37.381324+00
Date Added: 2024-06-11T08:06:34.023663
License: Public Domain

RENDERED: JULY 23, 2021; 10:00 A.M.
                         NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                             NO. 2017-CA-1245-MR

LINDA G. HOLT, JUDITH E.
PREWITT, AND CYNTHIA L.
ROEDER                                                             APPELLANTS

            ON REMAND FROM KENTUCKY SUPREME COURT
                    (FILE NO. 2019-SC-0596-DG)

               APPEAL FROM KENTON CIRCUIT COURT
v.           HONORABLE REBECCA LESLIE KNIGHT, JUDGE
                      ACTION NO. 16-CI-01429

THOMPSON HINE, LLP                                                    APPELLEE

                                    OPINION
                                   AFFIRMING

                                  ** ** ** ** **

BEFORE: COMBS, DIXON, AND K. THOMPSON, JUDGES.

THOMPSON, K., JUDGE: This case is again before this Court upon remand from

the Kentucky Supreme Court for further consideration in light of its decision in
Seiller Waterman, LLC v. RLB Properties, Ltd., 610 S.W.3d 188 (Ky. 2020)

(Seiller).

                 Initially, following oral argument, in our previous opinion we

affirmed the Kenton Circuit Court’s order granting the law firm of Thompson

Hine, LLP’s motion to dismiss the action filed against it by Linda G. Holt, Judith

E. Prewitt, and Cynthia L. Roeder (the sisters). We continue to affirm on remand,

albeit with different reasoning regarding the statute of limitations issue.

                 In 2013, the sisters sued some of their brothers in federal court over

the alleged manipulation of their parents’ estates, including claims for breaching

fiduciary duties. That complaint was consolidated with an extant case brought by

another sister. Eventually, after having dismissed or granted summary judgment to

the brothers on many claims, the federal court ruled in favor of the sisters on the

breach of fiduciary duty claims and ordered the brothers to pay the sisters roughly

$548 million.1 Osborn v. Griffin, No. CV 2011-89, 2016 WL 1092672, at *36

(E.D. Ky. Mar. 21, 2016) (unpublished). The Sixth Circuit affirmed. Osborn v.

Griffin, 865 F.3d 417 (6th Cir. 2017).

                 While the brothers’ appeal was pending before the Sixth Circuit, on

August 29, 2016, the sisters filed this action against Thompson Hine for its alleged

role in aiding and abetting the brothers’ breaches of fiduciary duty. Doubtlessly

1
    This includes an amount to a fourth sister who is not a party in the present action.

                                                   -2-
anticipating Thompson Hine’s arguing that the complaint was untimely, the sisters’

complaint alleges that they did not learn they had possible claims against

Thompson Hine until August 2013 during discovery in the federal litigation. At

oral argument, the sisters’ counsel stated they did not seek to add Thompson Hine

as a defendant to the then ongoing federal litigation because they did not discover

the claims until after the deadline for amending their federal pleadings.

             In lieu of an answer, Thompson Hine filed a motion to dismiss

pursuant to Kentucky Rules of Civil Procedure (CR) 12.02, arguing the complaint

was not timely filed and otherwise failed to set forth a cognizable claim for relief.

On July 6, 2017, roughly three months after conducting oral argument on the

motion to dismiss, the circuit court judge’s judicial assistant sent an ex parte email

to only counsel for Thompson Hine, which stated that the judge had decided to

grant the motion to dismiss and wanted counsel to resubmit a previously tendered

proposed order. In response, counsel emailed the assistant the same terse proposed

order it had previously submitted. On July 7, 2017, the judge’s assistant again

emailed only counsel for Thompson Hine. That email said the judge wanted

counsel to submit a more detailed proposed order. Thompson Hine’s counsel

emailed a greatly expanded proposed order to only the judge’s assistant on July 10,

2017. The sisters’ counsel was not copied on any of the emails between the circuit

court’s staff and Thompson Hine’s counsel.

                                         -3-
              On July 11, 2017, the sisters’ counsel learned about the ex parte

emails between the judge’s staff and Thompson Hine’s counsel at a hearing in

federal court. That same date, the circuit court signed the order submitted by

Thompson Hine without making any changes thereto. Three days later, counsel for

Thompson Hine filed its expanded proposed order in the record.

              Dismissal was granted on the basis that the sisters’ claim was time-

barred as legal malpractice claims are subject to a one-year statute of limitations

under Kentucky Revised Statutes (KRS) 413.245 or, alternatively, the sisters’

claims were untimely under the general five-year statute of limitation contained in

KRS 413.120(6) because statutory tolling pursuant to KRS 413.190(2) did not

apply to the nonresident law firm. Shortly after the circuit court denied the sisters’

motions for the judge to recuse and to withdraw the order, they filed this appeal.

              The sisters contend that the circuit court’s decision contains a host of

errors, but dispositive for this appeal are the resolution of two of their arguments,

whether the judgment must be reversed because the circuit court erred in

dismissing the complaint as untimely and conducting ex parte contacts. After

remand, we permitted the parties to file supplemental briefs addressing the impact

of Seiller.

              “A motion to dismiss for failure to state a claim upon which relief

may be granted admits as true the material facts of the complaint . . . [s]o a court

                                          -4-
should not grant such a motion unless it appears the pleading party would not be

entitled to relief under any set of facts which could be proved[.]” Fox v. Grayson,

317 S.W.3d 1, 7 (Ky. 2010) (internal quotation marks and footnotes omitted).

When ruling on a motion to dismiss, a court must liberally construe the pleadings

in the light most favorable to the plaintiff and accept as true the allegations therein.

Id. Since a motion to dismiss for failure to state a claim upon which relief may be

granted presents “a pure question of law,” we review the matter de novo. Id.

             The professional malpractice statute of limitations provides in relevant

part:

             Notwithstanding any other prescribed limitation of
             actions which might otherwise appear applicable, except
             those provided in KRS 413.140, a civil action, whether
             brought in tort or contract, arising out of any act or
             omission in rendering, or failing to render, professional
             services for others shall be brought within one (1) year
             from the date of the occurrence or from the date when the
             cause of action was, or reasonably should have been,
             discovered by the party injured.

KRS 413.245. Our Supreme Court has held that “KRS 413.245 is the exclusive

statute of limitations governing claims of attorney malpractice.” Abel v. Austin,

411 S.W.3d 728, 738 (Ky. 2013).

             In Seiller, the Kentucky Supreme Court reviewed a decision of our

Court regarding a nonclient suit against a law firm for allegedly wrongful acts

undertaken on behalf of the firm’s clients. Seiller, 610 S.W.3d at 191. Our Court

                                          -5-
had ruled that the claims for illegal lien, slander of title, and civil conspiracy were

not barred by the one-year statute of limitations contained in KRS 413.245 if

malice was proven. Seiller, 610 S.W.3d at 192.

                The Kentucky Supreme Court reversed this portion of the opinion. It

disagreed with the Court of Appeals that when acts by attorneys “through the

pretense of providing professional services” are committing an act “for some

malicious purpose[,]” there is an exception to this statute of limitations. Id. at 202.

It explained:

                The Court of Appeals’ conclusion that KRS 413.245 is
                limited to claims free from malice cannot be discerned
                from the plain language expressed in the statute. The
                statute does not refer to malice or contain any language
                from which the presence or absence of malice might be
                inferred as relevant to the statute’s applicability. Without
                language restricting the application of KRS 413.245 to
                claims not involving malice, the plain language of the
                statute directs that the one-year limitation applies to any
                claim against an attorney arising out of any act or
                omission in rendering or failing to render professional
                services . . . . Regardless of whether malice is alleged,
                claims arising from an act or omission in the rendering
                of, or failing to render, professional services are
                governed by KRS 413.245 and must be brought within
                one year.

Id. at 204. The Kentucky Supreme Court further concluded that KRS 413.245

applied to claims brought against attorneys by nonclients:

                By its plain, unambiguous language, KRS 413.245
                applies to civil actions arising out of any act or omission
                in rendering or failing to render professional services.

                                            -6-
             Nothing in the statute limits its application to only those
             claims brought by individuals or entities who engaged
             the professional to provide such services. KRS 413.245
             thus applies to any civil action against an attorney arising
             out of any act or omission in rendering or failing to
             render professional services without regard to the identity
             of the claimant.

Seiller, 610 S.W.3d at 205.

             The sisters attempt to distinguish Seiller on the basis that aiding and

abetting criminal conduct is not a “professional service” and, therefore, the one-

year statute of limitations for KRS 413.245 is not applicable. Given the expansive

language used by the Kentucky Supreme Court, it is evident that the civil action

which the sisters filed against the law firm is governed by KRS 413.245. The

actions they complain of were undertaken while the law firm was providing

professional services to the brothers. The fact that these professional services were

undertaken for improper and illegal purposes does not exempt these services from

KRS 413.245 any more than professional acts committed with malice would be.

Therefore, pursuant to Seiller, this one-year statute of limitations applies.

             While the sisters argue that tolling is appropriate, they did not file

their action for three years after they claim it accrued through discovery in the

federal case. Therefore, tolling cannot save their claims as the statute of

limitations expired prior to them bringing suit.

                                          -7-
             The complaint’s untimeliness moots all remaining issues except,

arguably, the sisters’ argument that the decision must be reversed due to the ex

parte contacts between the circuit court’s staff and counsel for Thompson Hine.

We agree that the ex parte contact was improper, but do not agree that it

invalidates the ruling here.

             “A basic tenet of the legal profession is ex parte communication

between a judge and an attorney in a pending case is disfavored.” Commonwealth

v. Cambron, 546 S.W.3d 556, 561 (Ky.App. 2018). Consequently, Supreme Court

Rule (SCR) 4.300, Canon 2, Rule 2.9(A)(1) permits a judge to make ex parte

contact with a party or its counsel only “for scheduling, administrative, or

emergency purposes, which do[ ] not address substantive matters” provided that

“(a) the judge reasonably believes that no party will gain a procedural, substantive,

or tactical advantage as a result of the ex parte communication; and (b) the judge

makes provision promptly to notify all other parties of the substance of the ex parte

communication, and gives the parties an opportunity to respond.” Comment (1) to

SCR 2.9 states in plain language that “[t]o the extent reasonably possible, all

parties or their lawyers shall be included in all communications to or from a

judge.”

             Because of the ex parte emails, Thompson Hine knew what the

outcome of the case would be several days before the sisters, who were neither

                                         -8-
informed of the ex parte contact nor given an opportunity to respond to it. A judge

may ask counsel for draft findings on the record but may not contact only one

side’s counsel ex parte to inform it of an upcoming decision and to ask for findings

to support that inchoate decision. Additionally, SCR 2.9(D) and SCR 2.12(A)

make it plain that a judge may not direct its staff to engage in similar ex parte

contact.

             Because the circuit court indicated that it had already decided to grant

the motion, the sisters have not shown that its decision was not the product of its

own independent deliberations. Under these facts, the sisters have not

demonstrated that the ex parte contacts materially impacted the outcome of the

motion to dismiss. Therefore, though improper, the contacts here must be deemed

harmless errors. However, we strongly discourage the circuit court from engaging

in similar ex parte communications in the future.

             For the foregoing reasons, the Kenton Circuit Court’s order granting

Thompson Hine’s motion to dismiss is affirmed.

             ALL CONCUR.

                                          -9-
BRIEFS FOR APPELLANT:     BRIEFS FOR APPELLEE:

Kent Wicker               Todd V. McMurtry
Louisville, Kentucky      Kyle M. Winslow
                          Fort Mitchell, Kentucky
Eva Christine Trout
Lexington, Kentucky       Carolyn J. Fairless
                          Christopher P. Montille
ORAL ARGUMENT FOR         Denver, Colorado
APPELLANTS:
                          ORAL ARGUMENT FOR
Kent Wicker               APPELLEE:
Louisville, Kentucky
                          Carolyn J. Fairless
                          Denver, Colorado

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