Court Opinion

ID: 8482925
Source: CourtListenerOpinion
Date Created: 2022-11-10 16:04:49.281927+00
Date Added: 2024-06-11T16:49:42.854890
License: Public Domain

RENDERED: NOVEMBER 10, 2022; 10:00 A.M.
                      NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                             NO. 2021-CA-1136-MR

CHRISTOPHER C. BABCOCK, DMD,
MD; SAMUEL V. STEELE, JR.; AND
UNNAMED JOHN DOES                                                 APPELLANTS

                APPEAL FROM JEFFERSON CIRCUIT COURT
v.                HONORABLE MARY M. SHAW, JUDGE
                        ACTION NO. 17-CI-004907

RENEE ESTRIDGE; JAMIE
WARREN, DMD, MD; AND
KENTUCKIANA ORAL &
MAXILLOFACIAL SURGERY
ASSOCIATES, PSC                                                     APPELLEES

                                   OPINION
                                  AFFIRMING

                                 ** ** ** ** **

BEFORE: CETRULO, COMBS, AND GOODWINE, JUDGES.

COMBS, JUDGE: Christopher C. Babcock, DMD, MD, and Samuel V. Steele, Jr.,

appeal an order of the Jefferson Circuit Court granting judgment to Jamie Warren,

DMD, MD; Renee Estridge; and Kentuckiana Oral and Maxillofacial Surgery
Associates, PSC (KOMSA). The judgment consisted of attorneys’ fees in the

amount of $52,527.07; other costs incurred in collection of a debt in the amount of

$1,959.41; and $86,553.42 -- the remainder of principal owed. After our review,

we affirm.

             This is the parties’ second appearance before us. Litigation began

when Warren, Estridge, and KOMSA filed a civil action against Babcock and

Steele in September 2017, alleging defamation, identity theft, and other causes of

action. On May 16, 2018, the parties negotiated a settlement whereby Babcock

and Steele would (inter alia) pay a sum of money to Warren, Estridge, and

KOMSA in exchange for dismissal of the claims against them. However, litigation

resumed when Babcock and Steele resisted and challenged enforcement of the

agreement.

             On August 10, 2018, the Jefferson Circuit Court ordered the terms of

the negotiated settlement to be enforced. The court incorporated the terms of the

settlement agreement into a final judgment entered on December 7, 2018.

Babcock and Steele filed a motion to alter, amend, or vacate and a motion

requesting the court to set the terms of a supersedeas bond. By order entered on

March 15, 2019, the court denied the motion to alter, amend, or vacate. It set the

supersedeas bond at $500,000.00, “which includes the Final Judgment amount to

be paid [by Babcock and Steele], [fees incurred by Warren, Estridge, and

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KOMSA], costs, post-judgment interest of 12% per agreement . . . .” Babcock and

Steele appealed.

                In an opinion rendered on September 18, 2020, we affirmed the circuit

court’s judgment. Babcock v. Estridge, No. 2019-CA-000544-MR, 2020 WL

5587369 (Ky. App. Sep. 18, 2020). We held that the court was not manifestly

unjust to conclude that the parties entered into a binding settlement on May 16,

2018. We observed that the unqualified acceptance by Babcock and Steele of a

counteroffer to resolve the litigation among them (as proposed by Warren,

Estridge, and KOMSA) provided a sufficient basis to conclude that the parties had

achieved a meeting of the minds; that the unequivocal actions of Babcock and

Steele following acceptance of the counteroffer confirmed their agreement; that the

detrimental reliance of Warren, Estridge, and KOMSA upon the acceptance of

their counteroffer further supported the order of the circuit court; and that

enforcement of the agreement was not manifestly unjust.

                Finally, we specifically addressed the issue of post-judgment interest.

We determined that the trial court was authorized by the provisions of KRS1

360.040(3) to impose post-judgment interest and, separately, that the parties “had

agreed to such interest in their agreement.” Babcock, 2020 WL 5587369. We

denied the petition for rehearing filed by Babcock and Steele, and, by order entered

1
    Kentucky Revised Statutes.

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on March 17, 2021, the Supreme Court of Kentucky denied their motion for

discretionary review.

             Once our opinion was final, the Jefferson Circuit Court granted the

motion of Warren, Estridge, and KOMSA to enforce the supersedeas bond in

partial satisfaction of the judgment. Subsequently, the Jefferson Circuit Court

granted the motion of Warren, Estridge, and KOMSA for attorneys’ fees in the

amount of $52, 527.07; costs in the amount of $1,959.41; and the remaining

outstanding principal balance of $86,553.42 “which continues to accrue interest at

the rate of 12% since release of the supersedeas bond on June 17, 2021.” This

second appeal followed.

             On appeal, Babcock and Steele contend that the order of the Jefferson

Circuit Court should be reversed because Warren, Estridge, and KOMSA are not

entitled to recover attorneys’ fees, costs, or interest at the rate of 12%.

             The interpretation and construction of a contract is a matter of law for

the court to decide. Cinelli v. Ward, 997 S.W.2d 474 (Ky. App. 1998). We review

questions of law de novo without deferring to the conclusions of the circuit

court. Id.

             The terms of the parties’ May 16, 2018, settlement agreement provide,

in part, that Babcock and Steele will pay to Warren, Estridge, and KOMSA a sum

of money -- 55% to be paid immediately; 22% to be paid on or before November

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16, 2018; and 22% to be paid on or before May 16, 2019. It provides further that

an agreed judgment will be entered “in the event of payment default in the amount

of unpaid settlement amount, accelerated and due immediately, with interest from

date of settlement agreement until paid in full at the rate of 12% per annum, plus

attorneys’ fees and costs of collection.”

             Babcock and Steele immediately refused to honor the terms of the

agreement. Warren, Estridge, and KOMSA turned once again to the circuit court.

The Jefferson Circuit Court ordered the terms of the negotiated settlement to be

enforced, and we affirmed that decision. Nevertheless, Babcock and Steele

continue to argue on appeal that there was never a meeting of the minds and that

the parties never actually entered into a settlement agreement. They also contend

that they were deprived of due process through the first appeal process. Since

neither of these issues is subject to our present review, we decline to discuss them

further.

             Additionally, Babcock and Steele contend that the court’s subsequent

order awarding attorneys’ fees, costs, and interest at 12% is erroneous. They claim

that attorneys’ fees and costs of collection are payable under the terms of the

agreement only upon a default and are limited to those amounts incurred “in the

collection of the unpaid portions of the agreed settlement, not the attorneys’ fees

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and costs.” (Internal quotation marks omitted.) Underlying their argument is their

assertion that they never defaulted on the terms of the May 16, 2018, agreement.

             Babcock and Steele reason that the appellate proceedings

“forestall[ed] the alleged ‘default.’” We disagree. Under the terms of the May 16,

2018, settlement, Babcock and Steele agreed to pay a stated sum to Warren,

Estridge, and KOMSA on a specific installment schedule. They failed to make the

initial payment, and under the clear terms of the agreement, payment of the entire

debt was accelerated. Taking Warren, Estridge, and KOMSA back to court to

enforce the terms of the settlement agreement did not, therefore, “forestall” their

default. Recourse to the tribunal was their logical course of action.

             Finally, Babcock and Steele argue that the attorneys’ fees incurred by

Warren, Estridge, and KOMSA

             in their attempt to convince the various Courts that there
             had been an actual “agreed upon” settlement cannot be
             considered fees incurred in an effort to collect the agreed
             sums because the debt did not become “final” until the
             [Supreme Court of Kentucky denied the motion for
             discretionary review] thus immediately triggering the
             payment of the supersedeas bond.

Again, we disagree.

             The parties’ May 16, 2018, agreement was immediately enforceable.

Its provisions did not spring into existence only when our opinion of September

18, 2020, became final. The agreement provides that the entire outstanding

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balance will come due immediately upon default. The agreement provides for no

grace period; but it unequivocally provides an acceleration clause. Babcock and

Steele specifically agreed that interest of 12% per annum would accrue from the

date of the settlement agreement until paid in full and that they would pay the

attorneys’ fees and costs of collection incurred by Warren, Estridge, and KOMSA.

             KRS 411.195 provides that:

             Any provisions in a writing which create a debt, or create
             a lien on real property, requiring the debtor, obligor,
             lienor or mortgagor to pay reasonable attorney fees
             incurred by the creditor, obligee or lienholder in the
             event of default, shall be enforceable, provided, however,
             such fees shall only be allowed to the extent actually paid
             or agreed to be paid, and shall not be allowed to a
             salaried employee of such creditor, obligor or lienholder.

             Babcock and Steele argue that “the time and funds spent by [Warren,

Estridge, and KOMSA] in the prosecution of, and subsequently the defense of their

alleged Settlement Agreement had actually nothing directly to do with

‘collection’” of the debt. We disagree. Every phase of the litigation following the

default has been an attempt to collect the funds that Babcock and Steele agreed to

pay in settlement of the legal action against them. Consequently, according to the

plain language of the parties’ agreement and the provisions of KRS 411.195,

Warren, Estridge, and KOMSA are entitled to the award of attorneys’ fees and

costs incurred as the result of the default. This amount includes all legal fees

                                         -7-
incurred to defend against the claims of Babcock and Steele and to enforce the

terms of the parties’ settlement agreement.

               The remaining contentions are meritless. The order of the Jefferson

Circuit Court is affirmed.

             ALL CONCUR.

BRIEFS FOR APPELLANT                      BRIEF FOR APPELLEES:
CHRISTOPHER C. BABCOCK,
DMD, MD:                                  Matthew Cory Williams
                                          Jennifer M. Stinnett
J. Fox DeMoisey                           Leigh V. Graves
Louisville, Kentucky                      Louisville, Kentucky

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