Court Opinion

ID: 4572285
Source: CourtListenerOpinion
Date Created: 2020-10-02 14:06:02.236666+00
Date Added: 2024-06-11T08:47:08.529638
License: Public Domain

RENDERED: SEPTEMBER 25, 2020; 10:00 A.M.
                    TO BE PUBLISHED

           Commonwealth of Kentucky
                  Court of Appeals

                    NO. 2019-CA-1625-MR

SUSAN BEWLEY, INDIVIDUALLY
AND AS EXECUTRIX OF THE ESTATE
OF GLORIA FRANCES DORRIS;
GEORGE ENSOR; ROGER ENSOR;
AND WILLIAM SCHWANK                             APPELLANTS

            APPEAL FROM DAVIESS CIRCUIT COURT
v.         HONORABLE JAY A. WETHINGTON, JUDGE
                   ACTION NO. 17-CI-01267

DEBORAH FAYE HEADY,
INDIVIDUALLY AND AS
ADMINISTRATRIX OF THE ESTATE
OF LARRY RUSSELL DORRIS;
PHILLIP RUSSELL LUALLEN;
AND EMBRY LYNN LUALLEN                               APPELLEES

                         OPINION
                        AFFIRMING

                        ** ** ** ** **

BEFORE: ACREE, KRAMER, AND TAYLOR, JUDGES.
KRAMER, JUDGE: The issue before us is whether the Daviess Circuit Court

erroneously dismissed the above-captioned Appellants’ claim of “equitable

recovery of assets” against Appellees pursuant to Kentucky Rule of Civil

Procedure (CR) 12.02(f) for failing to state a claim upon which relief may be

granted. We conclude that it did not. Accordingly, we affirm.

             Before we turn to the merits of Appellants’ arguments, we note that in

contravention of CR 76.12(4)(c)(v), they do not have a preservation statement at

the beginning of each argument, and they make no citations to the record

whatsoever. CR 76.12(4)(c)(iv) and (v) require ample references to the record

supporting each argument. The Court recently addressed these issues in Curty v.

Norton Healthcare, Inc., 561 S.W.3d 374 (Ky. App. 2018). Given the length at

which the Court in Curty urged compliance with CR 76.12(4)(c), we quote the

rationale for the rule and the Court’s warnings that leniency should not be

presumed.

                   CR 76.12(4)(c)[ (v) ] in providing that an
                   appellate brief’s contents must contain at the
                   beginning of each argument a reference to
                   the record showing whether the issue was
                   preserved for review and in what manner
                   emphasizes the importance of the firmly
                   established rule that the trial court should
                   first be given the opportunity to rule on
                   questions before they are available for
                   appellate review. It is only to avert a
                   manifest injustice that this court will

                                        -2-
                      entertain an argument not presented to the
                      trial court. (citations omitted).

              Elwell v. Stone, 799 S.W.2d 46, 48 (Ky. App. 1990)
              (quoting Massie v. Persson, 729 S.W.2d 448, 452 (Ky.
              App. 1987)). We require a statement of preservation:

                      so that we, the reviewing Court, can be
                      confident the issue was properly presented
                      to the trial court and therefore, is appropriate
                      for our consideration. It also has a bearing
                      on whether we employ the recognized
                      standard of review, or in the case of an
                      unpreserved error, whether palpable error
                      review is being requested and may be
                      granted.

              Oakley v. Oakley, 391 S.W.3d 377, 380 (Ky. App.
              2012). . . .

                      ....

                     Failing to comply with the civil rules is an
              unnecessary risk the appellate advocate should not
              chance. Compliance with CR 76.12 is mandatory. See
              Hallis v. Hallis, 328 S.W.3d 694, 696 (Ky. App. 2010).
              Although noncompliance with CR 76.12 is not
              automatically fatal, we would be well within our
              discretion to strike Curty’s brief or dismiss her appeal for
              her attorney’s failure to comply. Elwell. While we have
              chosen not to impose such a harsh sanction, we strongly
              suggest counsel familiarize himself with the rules of
              appellate practice and caution counsel such latitude may
              not be extended in the future.

Curty, 561 S.W.3d at 377-78 (emphasis added).1

1
 Regarding the ongoing problem of noncompliant briefing, we also direct counsel’s attention to
Clark v. Workman, 604 S.W.3d 616 (Ky. App. 2020).

                                              -3-
             As in Curty, although we would be well within our discretion to strike

the Appellants’ brief, we have chosen not to do so at this time. A cursory caselaw

search does not reveal that counsel has previously been warned about deficient

briefing. Accordingly, we hereby caution counsel that we may not be so lenient in

the future. We now turn to the merits of the case.

             When reviewing appeals of CR 12.02(f) dismissals, we take as true

the allegations contained in the complaint. In that regard, the relevant allegations

of the amended complaint filed by Appellants in this matter are as follows:

                             BACKGROUND FACTS

             1. Gloria Frances Dorris (referenced herein as “Gloria”)
             and Larry Russell Dorris (referenced herein as “Russell”)
             were previously married to one another. During the term
             of their marriage, Russell became familiar with the
             loving relationships of Gloria and her children – Susan,
             George, Roger, and William.

             2. Gloria and Russell were divorced by Order of the
             Ohio Circuit Court on or about July 7, 1998.

             3. Since the time of their divorce, Gloria and Russell
             maintained a close relationship to one another, as
             evidenced by a number of facts, including, but not
             limited to, (a) Gloria attended medical appointments with
             Russell, (b) Gloria and her children being listed as
             beneficiaries on Russell’s life insurance, and (c) Gloria
             being the first person nominated in Russell’s February
             15, 2017 Last Will and Testament to serve as his
             Executrix.

             4. On April 27, 2017, Russell broke into Gloria’s home
             in the middle of the night. After entering Gloria’s home,

                                         -4-
             Russell murdered Gloria. Russell then took his own life
             later that same day in Gloria’s home.

             5. On May 2, 2017, [Susan Bewley] was appointed to
             serve for Gloria’s estate.

             6. On June 27, 2017, [Deborah Faye Heady] was
             appointed to serve for Russell’s estate.

             7. Russell had certain assets available to him during his
             lifetime that, upon his death, passed outside the probate
             process (the “Non-Probatable Assets”). The Non-
             Probatable Assets could have been accessed, liquidated,
             and used by Russell during his lifetime for any lawful
             purpose. Upon his death, the recipients of the Non-
             Probatable Assets were Deborah, Phillip [Russell
             Luallen], and Embry [Lynn Luallen].

             Based on these allegations, Gloria’s estate asserted a wrongful death

claim against Russell’s estate, and Gloria’s children (i.e., Susan, George, Roger,

and William) asserted intentional infliction of emotional distress claims against

Russell’s estate. And, with respect to Russell’s children (i.e., Deborah, Phillip, and

Embry), Appellants collectively asserted the following claim – the validity of

which is the sole issue in this appeal:

                  COUNT VI – EQUITABLE RECOVERY OF
                                ASSETS

             22. Plaintiffs restate, reiterate, and incorporate each of
             the preceding paragraphs of this Amended Complaint as
             if fully restated herein.

             23. Had Russell lived through the trial of this action, the
             Non-Probatable Assets would have been available to
             satisfy a judgment against Russell.

                                          -5-
              24. By operation of Russell’s death, the Non-Probatable
              Assets owned by Russell during his lifetime passed
              outside the probate process and the control of
              Administratrix [(i.e., Deborah)].[2]

              25. According to Administratrix, the Non-Probatable
              Assets owned by Russell which could have been
              liquidated during his lifetime were as follows: (a) a John
              Hancock Annuity Account (account number ending in 7);
              (b) a TD AmeriTrade Account (account number ending
              in 5); and (c) a TD AmeriTrade Account (account
              number ending in 0).

              26. According to Administratrix, the Non-Probatable
              Assets were received by Deborah, Phillip, Embry, and
              Russell’s Estate.

              27. The Court should exercise its equitable power to
              make any assets that would have been available to
              Russell had he lived to face judgment available to satisfy
              a judgment in this case. This would require Deborah,
              Phillip, Embry, and Administratrix to disgorge any such
              assets in the event Plaintiffs prevail in this action and
              obtain a judgment in excess of the amount available from
              Russell’s probate estate.

              In their subsequent motion to dismiss, Russell’s children contended

Appellants’ “equitable recovery of assets” claim, which appeared to call for the

“non-probatable assets” identified in Appellants’ complaint to be placed in a

“constructive trust,” was not legally recognized in Kentucky.

2
  There is no dispute that the “non-probatable assets” at issue in this matter, identified in
Paragraph 25 of Appellants’ complaint, were subject to valid transfer-on-death designations and,
thus, effectively avoided probate.

                                              -6-
                 Responding,3 Appellants argued that equity should not allow a

murderer to shield his assets by killing himself. And, that while they had been

unable to locate any Kentucky authority supportive of their argument,

                 “a constructive trust arises when a person entitled to
                 property is under the equitable duty to convey it to
                 another because he would be unjustly enriched if he were
                 permitted to retain it.” Kaplon v. Chase, 690 S.W.2d
                 761, 763 (Ky. App. 1985) (citing Becker v. Neurath, 149
                 Ky. 421, 149 S.W. 857 (Ky. 1912)).

                 Our sister states have also found that situations such as
                 this – where a murderer’s family ultimately benefitted
                 from his murder – are prime cases for application of the
                 doctrine of equitable trusts. In an Indiana case in which a
                 husband murdered his wife after she filed for divorce and
                 then killed himself, the Indiana Court of Appeals held
                 that it was appropriate to place a constructive trust on
                 certain assets received by the husband’s heirs as a result
                 of his death.

                        In our view, to allow Robert’s heirs to
                        benefit from his wrongdoing would, in
                        effect, confer a benefit upon Robert as a
                        result of his wrongdoing. In addition, we
                        cannot say that it was not Robert’s intention
                        to benefit his heirs when he took Donna’s
                        life and shortly thereafter took his own.

                 Heinzman v. Mason, 694 N.E.2d 1164, 1167-1168 (Ind.
                 App. 1998). The Heinzman court went on to quote from
                 a similar case from Montana.

                        It is argued that the petitioners did not
                        commit the killing, but are the heirs of the
                        one who did the killing. Though this is true,

3
    Appellants set forth this argument in their September 10, 2019 “response to motion to dismiss.”

                                                 -7-
                      who can say that it was not the intention of
                      the murderer to benefit his heirs when he
                      took the life of his wife followed shortly
                      thereafter by the taking of his own life.

               Id. at 1168 (quoting In re Cox’ Estate, 141 Mont. 583,
               380 P.2d 584, 588 (Mont. 1963)).

               Like the individual Defendants in the present case, the
               heirs at issue in Heinzman had not committed any wrong.
               However, that was not sufficient basis for denying the
               equitable remedy of a constructive trust.

(Emphasis added.)

               Having made their respective arguments, the parties submitted the

matter for final adjudication, asking the circuit court to determine whether

Appellants’ “equitable recovery of assets” claim was recognized under Kentucky

law. In an order of September 23, 2019, the circuit court answered in the negative

and, accordingly, dismissed Appellants’ suit to that extent.4 This appeal followed.

               We review dismissals under CR 12.02(f) de novo. Morgan &

Pottinger, Attorneys, P.S.C. v. Botts, 348 S.W.3d 599, 601 (Ky. 2011), overruled

on other grounds by Maggard v. Kinney, 576 S.W.3d 559 (Ky. 2019). CR 12.02(f)

is designed to test the sufficiency of a complaint. Pike v. George, 434 S.W.2d 626,

627 (Ky. 1968). It is proper to grant a CR 12.02(f) dismissal motion if:

4
  The remainder of Appellants’ claims remain pending. See CR 54.02 (permitting the trial court
to make an otherwise interlocutory order – e.g., one adjudicating less than all claims between all
litigating parties – final and appealable in certain circumstances).

                                               -8-
             it appears the pleading party would not be entitled to
             relief under any set of facts which could be proved in
             support of his claim. . . . [T]he question is purely a
             matter of law. Stated another way, the court must 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, 883-84 (Ky. App. 2002) (internal quotation

marks and citation omitted). For purposes of a CR 12.02(f) motion, this Court, like

the circuit court, must accept as true the plaintiff’s factual allegations and draw all

reasonable inferences in the plaintiff’s favor. Pike, 434 S.W.2d at 627.

             In their brief before this Court, Appellants repeat the argument they

made below regarding the veracity of their “equitable recovery of assets” claim.

Simply put, Appellants’ “claim” is for a constructive trust to be impressed upon the

vested property interests of an alleged murderer.

             With that said, there are at least three problems. First, the imposition

of a “constructive trust” is not a claim. It is merely a remedy. Middleton v.

Beasley, 186 Ky. 252, 216 S.W. 591, 592 (1919). To explain:

             When legal title to property has been acquired or held
             under such circumstances that the holder of that legal title
             may not in good conscience retain the beneficial interest,
             equity converts him into a trustee. Middleton v. Beasley,
             186 Ky. 252, 216 S.W. 591, 592 (1919) (citations
             omitted). Constructive trusts are created by the courts
             “in respect of property which has been acquired by fraud,
             or where, though acquired originally without fraud, it is
             against equity that it should be retained by him who
             holds it.” Hull v. Simon, 278 Ky. 442, 128 S.W.2d 954,
             958 (1939); see also O’Bryan v. Bickett, 419 S.W.2d 726,

                                          -9-
             728 (Ky. 1967). “The fraud may occur in any form of
             unconscionable conduct; taking advantage of one’s
             weaknesses or necessities, or in any way violating equity
             in good conscience.” Kaplon v. Chase, 690 S.W.2d 761,
             763 (Ky. App. 1985) (emphasis added), citing St. Louis
             and S.F.R. Co. v. Spiller, 274 U.S. 304, 47 S.Ct. 635, 71
             L.Ed. 1060 (1927). In fact, a court exercising its
             equitable power may impress a constructive trust upon
             one who obtains legal title, “not only by fraud or by
             violation of confidence or of fiduciary relationship, but in
             any other unconscientious manner, so that he cannot
             equitably retain the property which really belongs to
             another[.]” Scott v. Scott, 183 Ky. 604, 210 S.W. 175,
             176 (1919) (emphasis added). Similarly we have said
             that a constructive trust may be imposed where title is
             taken under “circumstances of circumvention [or]
             imposition[.]” Middleton, 216 S.W. at 592.

Keeney v. Keeney, 223 S.W.3d 843, 849 (Ky. App. 2007).

             Second, Appellants have asserted no viable claim that could serve as a

basis for imposing a constructive trust. As indicated above, constructive trusts

may be imposed as a remedy associated with claims of fraud, breach of confidence,

breach of fiduciary duty, or unjust enrichment. But, throughout their pleadings and

in their appellate brief, Appellants conceded Russell’s children “had not committed

any wrong.” Appellants have never argued Russell’s children acquired the “non-

probatable assets” through any “unconscientious manner” involving fraud, breach

of confidence, or breach of fiduciary duty.

             Moreover, while Appellants asserted (in their response to the Russell

children’s motion to dismiss) that the Russell children would be “unjustly

                                        -10-
enriched” if allowed to retain the “non-probatable assets,” the circumstances

presented in this matter would fail to support any claim of unjust enrichment. To

explain:

               In order for a party to prevail under the theory of unjust
               enrichment, it must prove three elements: “(1) benefit
               conferred upon defendant at plaintiffs [sic] expense; (2) a
               resulting appreciation of benefit by defendant; and (3)
               inequitable retention of benefit without payment for its
               value.”

Furlong Dev. Co., LLC v. Georgetown-Scott Cty. Planning & Zoning Comm’n, 504

S.W.3d 34, 39-40 (Ky. 2016) (quoting Jones v. Sparks, 297 S.W.3d 73, 78 (Ky.

App. 2009)).

               With respect to the first of these elements, “[a] slayer’s acquisition,

enlargement, or accelerated possession of an interest in property as a result of the

victim’s death constitutes unjust enrichment that the slayer will not be allowed to

retain.” See RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT §

45 (2011); see also Cowan v. Pleasant, 263 S.W.2d 494, 495 (Ky. 1953)5

5
 The Cowan Court recognized that Kentucky’s policy against permitting an individual from
profiting from murder is largely reflected in Kentucky Revised Statute (KRS) 381.280, which
provides in relevant part:

               (1) If the husband, wife, heir-at-law, beneficiary under a will, joint
               tenant with the right of survivorship or the beneficiary under any
               insurance policy takes the life of the decedent or victimizes the
               decedent by the commission of any felony under KRS Chapter 209
               and in either circumstance is convicted therefor, the person so
               convicted forfeits all interest in and to the property of the decedent,
               including any interest he or she would receive as surviving joint

                                               -11-
(explaining that the heirs of a joint tenant who murdered his co-tenant and then

committed suicide could only inherit the murderer’s share of the property – and not

any interest the murderer would otherwise have acquired through a survivorship

interest in the property – because “[i]t is axiomatic that a wrongdoer should not be

permitted to profit from his wrongful act”).

               Here, the first of these elements is absent. Russell’s children were not

enriched at Russell’s expense; after all, Russell had chosen them as his transfer-on-

death beneficiaries. Russell’s children were not enriched at Russell’s estate’s

expense because, as Appellants had alleged, Russell’s estate never had any interest

or expectancy in the “non-probatable assets.” More to the point, Russell’s children

were not enriched at Gloria’s expense because she never had any interest in the

non-probatable assets and because those assets were never any form of profit from

Gloria’s death.

               tenant, and the property interest or insurable interest so forfeited
               descends to the decedent’s other heirs-at-law, beneficiaries, or joint
               tenants, unless otherwise disposed of by the decedent. A judge
               sentencing a person for a [sic] offense that triggers a forfeiture
               under this section shall inform the defendant of the provisions of
               this section at sentencing.

(Emphasis added.) Obviously, this statute cannot apply here, as it did not apply in Cowan,
because there was no convicted murderer in either instance; suicide prevented any such
determination. From a broad public policy standpoint, however, this statute is notable for what it
states about the kind of property that a murderer forfeits – namely, property the murderer would
not have received, but for the killing. Likewise, Cowan is notable because, despite the absence
of any murder conviction in that matter, the Court nevertheless followed the public policy
embodied in the statute.

                                               -12-
               Finally, we turn to the third problem with Appellants’ “claim” to place

a constructive trust upon the “non-probatable assets.” As indicated, our Courts

have specified that the purpose of a constructive trust is to prevent an individual

from retaining property he or she acquired in an unconscientious manner, “which

really belongs to another[.]” Scott v. Scott, 183 Ky. 604, 210 S.W. 175, 176

(1919) (emphasis added) (citation omitted). In other words, constructive trusts are

applied to property that a wrongdoer acquired, enlarged, or accelerated his

possession of as a result of his wrongdoing, and at the expense of a victim.6

“[R]ules of equity[,]” however, “do not extend so far as to deprive the killer of his

own property.”7

6
  The caselaw Appellants discovered in Indiana and Montana is also consistent with this
principle. Specifically, in Heinzman v. Mason, 694 N.E.2d 1164, 1167 (Ind. Ct. App. 1998), the
Indiana Court of Appeals held that “even in the absence of statutory authority, a court may
properly impose a constructive trust upon any property acquired by an individual or his estate
when the individual wrongfully kills his spouse and then commits suicide before he can be
charged or convicted of causing the death.” (Emphasis added.) There, the property acquired
consisted of life insurance proceeds. The killer was the sole beneficiary of the insurance policy,
the victim was the insured, and the court held that because the killer’s wrongdoing caused the
insured’s death and put him in a position to benefit from that death, neither he nor his estate was
eligible to receive the proceeds. Id. at 1166, 1167.
        Similarly, Cox was a murder-suicide case involving the disposition of real property held
jointly by the deceased husband and wife. The court concluded that inherent in the Montana
statute dealing with joint property was the idea that the felonious killer should not benefit. Thus,
while it did allow the heirs of the murderer to inherit the murderer’s vested interest in the real
property, it did not allow the heirs of the murderer to inherit the victim’s interest. See In re Cox’
Estate, 380 P.2d 584 (Mont. 1963).
7
  See Estate of Charlotte Foleno v. Estate of Billy Foleno, 772 N.E.2d 490, 496 (Ind. Ct. App.
2002). Although it is beyond the necessary scope of this case, we add that Foleno also provides
a robust historical analysis of the now-outdated common law doctrines of attainder, forfeiture,
corruption of blood, and escheat, the disfavor of which largely accounts for why modern slayer

                                                -13-
               Here, to once again belabor the point, Russell did not acquire, enlarge,

or accelerate his possession of the John Hancock annuity account or TD

AmeriTrade accounts at issue in this matter as the result of any alleged

wrongdoing, or at the expense of any victim; rather, he already owned those assets.

Gloria’s death had no bearing upon his ownership, or his children’s subsequent

ownership.

               Considering the foregoing, the Daviess Circuit Court did not err in

dismissing Appellants’ “equitable recovery of assets” claim. We, therefore,

AFFIRM.

               ALL CONCUR.

BRIEF FOR APPELLANTS:                           BRIEF FOR APPELLEES:

S. Coy Travis                                   Samuel B. Lee
Hillview, Kentucky                              Owensboro, Kentucky

statutes and equitable principles merely prohibit a killer from profiting from murder and do not
force a killer to forfeit their own property. See id. at 493-96.

                                              -14-