Court Opinion

ID: 5072964
Source: CourtListenerOpinion
Date Created: 2021-10-01 10:55:13.698028+00
Date Added: 2024-06-11T08:19:54.759063
License: Public Domain

LEIBSON, Justice,
concurring.
Respectfully, I concur with the holding in the Majority Opinion, the effect of which is to discharge the bank from liability to the Ripatos for consequential damages, but I disagree with the reasoning underlying this result.
The Majority Opinion is premised on the conclusion that “there was a valid agreed order in which the Ripatos made a covenant not to sue, which was breached by this action.”
To the contrary, the factual underpinnings for the “agreed order” entered on November 1,1982, were fully explored at a hearing before the trial court, following which the trial court “Set Aside” said “agreed order,” finding:
“That at the time the agreed order was signed and entered by the Court the defendants [Ripatos] were no longer represented by the attorney who had negotiated the agreement on their behalf, he having resigned on October 26,1982, and that the defendants were not in agreement with the provisions of the order at the time it was entered and did not consent to the entry of the order.”
There was ample evidence to sustain the trial court in its findings, and in setting aside the agreed order. The evidence supported a finding that Betty Ripato did not participate in the discussion underlying the agreement, that neither Ripato agreed to its final terms, and that neither signed it. Further, the fact the Ripatos thereafter continued to operate the business did not constitute a waiver or ratification, because they thought it was their right to do so without regard to any agreement.
The trial judge decided he had signed the “agreed order” in error because the parties had not agreed to all of its terms. This finding should not be disturbed.
However, I agree with the result reached in the Majority Opinion. The fundamental question in this case which the Majority Opinion never reached, is whether ex parte prejudgment seizure statutory provisions utilized by Farmers Deposit Bank are adequate to withstand constitutional challenge. The trial court was in error in holding the process unconstitutional.
The proceedings and judgment on behalf of the Ripatos against the bank stem from the trial court’s order dated October 8, 1985, holding unconstitutional “the provisions of KRS Chapter 425 as provides for prejudgment seizure and attachment of property without prior notice and hearing ... as violative of due process under the Fourteenth Amendment of the Constitution of the United States.” I disagree.
The conditions for ex parte prejudgment attachment have been narrowly circumscribed in a series of United States Supreme Court decisions which can be referred to as Fuentes and its progeny. These include Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972); Mitchell v. W.T. Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974); North Georgia Finishing, Inc. v. Di Chem, Inc., 419 U.S. 601, 95 S.Ct. 719, 42 L.Ed.2d 751 (1975); and Carey v. Sugar, 425 U.S. 73, 96 S.Ct. 1208, 47 L.Ed.2d 587 (1976). I will not attempt to summarize all of the law on the subject in this Concurring Opinion. Suffice it to say that not all ex parte, prejudgment seizures are unconstitutional; the provisional remedy still exists if the statutes providing it are adequate to comply with United States Supreme Court interpretation of the mandates of due process.
These requirements are discussed at length in an article by William R. Mapother, The Constitutionality of Kentucky’s Prejudgment Seizure Law, 68 Ky.LJ. 557 (1979-80). Not coincidentally, Mr. Mapother also drafted much of Kentucky’s present *401prejudgment seizure statutory structure, seeking to comply with the mandatory language in the various United States Supreme Court decisions on the subject. Mr. Mapother’s article summarizes the following “combination” of “factors ... necessary to ‘save’ a statute”:
“(1) the decision to issue the writ is made by a judge;
(2) the plaintiff must post an indemnity bond prior to issuance of the writ;
(3) the plaintiff must be required to disclose the facts supporting his request for a writ with specificity;
(4) an early post-seizure hearing is required by the statute;
(5) the writ can be issued only upon narrowly defined grounds;
(6) the defendant can reclaim the property by posting a bond.” Id. at 569-70.
The Kentucky prejudgment seizure statutes in KRS Chapter 425 meet these requirements, with perhaps one exception. The ex parte writ of possession can only be issued by a judicial officer when it “appears from facts shown by affidavit that great or irreparable injury would result to the plaintiff if issuance of the writ were delayed until the matter could be heard on notice.” KRS 425.076(1). The only due process issue in our statutory structure is whether the alleged debtor is provided adequate notice and opportunity to be heard.
Fuentes and its progeny do not require that the alleged debtor be provided either a preseizure hearing nor an automatic hearing. They do require immediate notice to the debtor that the property has been seized and an opportunity to be heard promptly at the debtor’s option. Under Fuentes and its progeny due process requires opportunity for a prompt post-seizure hearing at which the creditor must establish the grounds upon which the writ was issued. Kentucky’s statutes expressly provide the alleged debtor with notice of the seizure and the right to demand a hearing to decide whether “the writ be quashed and any property levied on pursuant to the writ be released.” KRS 425.081(1). Conduct of the hearing is specified in KRS 425.031. The statutory scheme provides that a provisional remedy is available only in extraordinary circumstances with provisions for notice and an opportunity to be heard. It is implicit that with a provisional extraordinary remedy such as this, the debtor will have a right to demand an immediate hearing; that such hearing must be provided as soon as time will permit, as indeed it was provided in the present case. With judicial interpretation extrapolating that the requirement for a “prompt” hearing is implied by the otherwise express provisions, an interpretation well within the obvious legislative intent, the statute complies with the United States Supreme Court requirements for due process as set forth in Fuentes and its progeny. As stated in a footnote to Fuentes, “we deal here only with the right to an opportunity to be heard.... [Tjhere is a likelihood that many defendants would forgo their opportunity, sensing the futility of the exercise in the particular case.” 407 U.S. at n. 29, 92 S.Ct. at n. 29.
In the present case the facts are such that the challenge to due process is abstract and technical, lacking any substantive underpinnings. Therefore, we should uphold the constitutionality of the statutes and the adequacy of due process in this case.
GANT, J., joins in this concurring opinion.