MOORE, Judge.
Kathy Caruthers appeals from a judgment of the Pike Circuit Court. The first judgment was entered in favor of her former neighbors, Earl Robinette, Lowell Sesco, and Elbert Sesco, and it resolved a quiet title dispute regarding certain tracts of land situated in Pike County, Kentucky. Caruthers also appeals a post-judgment discovery order of the circuit court compelling her to disclose a list of her assets to appellee, American General Home Equity, Inc. Conversely, American General has moved to dismiss this latter aspect of Caruthers' appeal, and has moved pursuant to Kentucky Rule of Civil Procedure (CR) 73.02(4)
For the reasons stated in this opinion, we dismiss the entirety of Caruthers' appeal and grant American General its motion for sanctions to the extent specified.
In Caruthers v. Robinette, No. 2003-CA-000842-MR, 2004 WL 870437 (Ky. App. April 23, 2004), a panel of this Court discussed the pertinent factual and procedural history of the quiet title dispute between the appellant, Kathy Caruthers, and the appellees, Earl Robinette, Elbert and Lowell Sesco, American General, and Gathel Warren; we incorporate it here by reference. In Caruthers v. Robinette, No. 2008-CA-001212-MR, 2009 WL 3486652 (Ky. App. Oct. 30, 2009), the second time that this matter was appealed before this court, we again remanded to the circuit court. This is now the third time our Court has been presented with this quiet title dispute. Nevertheless, we have no jurisdiction to address the merits of this quiet title dispute.
The reason for our dismissal traces back to Earl Robinette's death in June, 2005. As we noted in our prior opinions, Earl Robinette was one of the landowner defendants named in this matter and also the grantor of the land held by the other landowner defendants, Lowell and Elbert Sesco. Because the boundaries of his own tract and the tract he purported to convey to the Sescos would have been affected by the outcome of this quiet title action, Earl Robinette was an indispensible party to this quiet title action and any appeal regarding it. Accordingly, on August 16, 2005, this action was revived and Earl's widow, Wilma Grace Robinette, was substituted in Earl's place and on behalf of his estate and heirs.
After the circuit court entered its second judgment against Caruthers on May 28, 2008, Caruthers filed a notice of appeal listing herself as the appellant and listing the following parties as appellees: Earl Robinette; Lowell T. Sesco; Elbert Sesco; American General Home Equity, Inc.; and Addington Enterprises, Inc. Her notice of appeal omitted the estate of Earl Robinette and Earl's widow, Wilma Grace Robinette, who had been substituted for Earl Robinette. Now, following the circuit court's third judgment in favor of the Appellees (entered June 8, 2010), Caruthers has again listed the deceased Earl Robinette as an appellee in this matter and has again omitted Earl's estate and widow as parties to her appeal.
With the above in mind, Commonwealth v. Maynard, 294 S.W.3d 43 (Ky. App. 2009), explains why this matter must be dismissed:
Id. at 46.
The appeal in Maynard was not saved from dismissal by: 1) the fact that the heirs participated in the proceedings at the circuit court level; 2) the strong probability that the omission of the heirs originated from a mutual mistake of law shared by the trial court; 3) the "little if any prejudice" caused to the heirs by the appellant's failure to name them as parties to the appeal; and 4) the fact that "the heirs have all been appointed executors of Maynard's estate and thus, their interest in the real property has been actively and vigorously litigated at all stages of this litigation, including this appeal." Id. at 47. And, upon finding that the heirs were indispensible parties to the appeal, as we have here, the Court concluded:
Id. at 47-48.
To paraphrase the above quote from Maynard, we would be affecting the interests of Earl Robinette's heirs, who are not parties here, if we were to grant Caruthers relief in this appeal. In addition, as Earl Robinette is deceased and his estate has no interest or title in the real property at issue in this dispute, there is currently no named party to this appeal with any interest or title in any of the property held by Earl Robinette who could be bound by any determination set forth by this Court. Accordingly, we DISMISS this part of Caruthers' appeal.
During the pendency of the above-referenced quiet title dispute, Caruthers and American General also asserted claims against each other relating to a promissory note and mortgage agreement they had entered into regarding the property at issue. Taken liberally, Caruthers asserted a claim of negligent misrepresentation against American General. She alleged that she had relied upon a title opinion and insurance policy that American General had obtained in relation to the mortgage in order to verify the status of her title to the property; the title opinion had induced her to enter into the mortgage agreement with American General; American General was therefore obligated to reimburse her for all of her litigation expenses and to reform the terms of the mortgage agreement; and, that she was entitled to suspend any payments she owed to American General by virtue of the mortgage. American General, on the other hand, moved to dismiss Caruthers' claim and asserted its own claim against Caruthers for the outstanding balance of the promissory note, which was approximately $13,700.
On August 16, 2005, the circuit court entered interlocutory judgment in favor of American General; specifically, it dismissed Caruthers' claim and held Caruthers personally liable to American General for the outstanding balance on the promissory note, plus post-judgment interest. This interlocutory judgment was made final on May 28, 2008, when the circuit court entered a final and appealable order adjudicating the aforementioned quiet title dispute. Although Caruthers filed a timely appeal thereafter, her appeal did not raise any arguments regarding the circuit court's dismissal of her claim against American General or American General's judgment against her. Our subsequent opinion undertook no review of those issues; therefore, the circuit court's adjudications regarding those issues became final and are now unappealable.
With this background in mind, we now turn to the second part of Caruthers' current appeal which regards a September 20, 2010 discovery order compelling Caruthers to disclose a list of her assets to assist American General in its efforts to collect upon the judgment it obtained against Caruthers regarding the mortgage and promissory note. As stated in her appellate brief, Caruthers' arguments are:
Caruthers is not arguing that the circuit court lacked the authority or wide discretion to compel this kind of post-judgment discovery; indeed, taken objectively, this aspect of Caruthers' appeal has nothing to do with the circuit court's September 20, 2010 discovery order. Instead, Caruthers has simply used that order as a pretext for collaterally attacking
With that said, there are several misstatements and legal misinterpretations in Caruthers' arguments that require clarification. To begin, Caruthers' argument apparently, and in large part, relies upon the following phrase that appeared in the three judgments the circuit court entered when it adjudicated the quiet title dispute: "the claim of American General Home Equity, Inc., in view of the Court's Judgment, is adjudged as moot[.]" However, the circuit court has never used the word "moot" in connection with the validity of American General's personal judgment against Caruthers for the balance of the promissory note. Rather, the only times it has ever used the word "moot" in relation to American General was at the conclusion of its three final orders resolving the quiet title dispute, and it used the word "moot" in relation to American General's claim to the property at issue in that quiet title dispute.
Like Caruthers, American General also asserted a claim to the property at issue in the quiet title dispute. Its claim to that property arose from its mortgage agreement with Caruthers because that property formed a part of its security for their agreement. If Caruthers had no ownership interest in that property, American General had no security interest in—and therefore no claim to —that property. This was precisely the circuit court's holding in each of the orders it entered when it resolved the quiet title dispute against Caruthers. In short, no circuit court order has ever invalidated American General's personal judgment against Caruthers for the outstanding balance of the promissory note or American General's right to collect upon it.
Based upon that same misinterpretation, Caruthers also apparently assumes that a non-party, National Title Insurance, Inc., is now attempting to assert some form of subrogation claim against her in relation to American General's title insurance policy; that some form of "double recovery" might come into play as a result; and, that she should now have another opportunity to reassert her claim that she relied upon the title opinion that American General received as some form of defense "before a judgment is granted." But, no additional claims are being asserted against Caruthers, and no additional judgment is being sought. As American General has represented in its motion to dismiss this portion of Caruthers' appeal, American General merely assigned National Title the judgment that it has already acquired against Caruthers. It retained the right, however, to institute legal proceedings to collect that judgment from Caruthers on behalf of its assignee.
A judgment is presumed valid and cannot be collaterally attacked unless it appears from the face of the record that the judgment is void. Spicer v. Spicer, 236 S.W.2d 474, 476 (Ky. 1951). Aside from her own misinterpretations of the circuit court's judgments in this matter, Caruthers has pointed to nothing that would defeat the validity of American General's judgment against her regarding the promissory note. Therefore, this latter portion of Caruthers' appeal represents an unauthorized collateral attack, and American General's motion to dismiss it is accordingly GRANTED.
American General has also asked for an award of the costs and attorney fees it incurred in filing its motion to dismiss this portion of Caruthers' appeal. It argues that Caruthers filed this appeal merely for the purpose of delaying and hindering its collection efforts. We believe such an award is appropriate in this instance. The standard for doing so was set forth in Leasor v. Redmon, 734 S.W.2d 462, 464 (Ky. 1987):
As noted, Caruthers has based this part of her appeal entirely upon her theory that the circuit court decided, on its own motion and without explanation, to revoke American General's approximately $13,700 judgment against her. Nothing in the circuit court's record—much less its judgments containing the "moot" language—can be reasonably interpreted to support that theory. Indeed, the circuit court itself informed Caruthers under no uncertain terms that she was mistaken prior to when she took this appeal: when Caruthers presented this theory to the circuit court in opposition to American General's motion to compel discovery, the circuit court rejected it and granted American General's motion.
In light of the above, we find that this part of Caruthers' appeal is frivolous and that Caruthers filed this part of her appeal in bad faith. Our finding is further justified by the fact that Caruthers' appeal is nothing more than a pretext for an unauthorized collateral attack and that her collateral attack has hindered American General's ability to collect upon its valid judgment against her. Therefore, American General's request for sanctions pursuant to CR 73.02(4) is GRANTED.
Kathy Caruthers is hereby assessed all court costs incurred by American General in filing its motion to dismiss this portion of Caruthers' appeal, including a reasonable fee for its attorney. American General shall have fifteen (15) days from the date of entry of this Opinion and Order in which to file with the Clerk of this Court (copy to Caruthers) its statement of costs, expenses, and fees (the attorney need not be made a party), together with a supporting affidavit or affidavits. Caruthers shall thereafter have fifteen (15) days to respond. This Court shall thereafter fix the amount American General shall recover, and such determination shall be made on the basis of the record, unless otherwise ordered for hearing by this Court. Following a fixing of the sanction, this case shall be remanded to the Pike Circuit Court for enforcement of American General's existing judgment against Caruthers, and for collection of the sanction.
DIXON, JUDGE, CONCURS.
TAYLOR, JUDGE, CONCURS IN PART AND DISSENTS IN PART BY SEPARATE OPINION.
TAYLOR, JUDGE, CONCURRING IN PART AND DISSENTING IN PART.
I concur with the majority in the dismissal of this appeal. However, I must respectfully and regretfully dissent regarding the imposition of sanctions against Caruthers pursuant CR 73.02(4).
The grounds asserted by American General in its motion to dismiss state that sanctions are justified against Caruthers because the purpose of the filing of the Amended Notice of Appeal (Amended Notice) was to delay or hinder collection of the personal judgment entered by the circuit court against Caruthers in August of 2005, that was made final by order entered in May 2008. However, the Amended Notice had no legal effect on the collection of this judgment since Caruthers failed to post a supersedeas bond pursuant to CR 73.04. Thus, American General was free to continue to collect the judgment pursuant to any and all legal remedies available, after the filing of the Amended Notice.
As concerns sanctions under CR 73.02(4), while I agree that the filing of the Amended Notice, at first blush, is perilously close to being frivolous in nature, I cannot agree it is so totally lacking in merit to have been taken in bad faith, given that the circuit court did not delineate with specificity in its June 8, 2010, judgment which claim or claims of American General had been adjudicated as moot. Had the circuit court's judgment specifically excluded the personal judgment entered in August of 2005, I would concur with the imposition of sanctions on Caruthers.
