JOHN DOE #1-77; JANE DOE #1-19, AND ALL OTHER SIMILARLY-SITUATED, BUT AS YET UNKNOWN JOHN DOE AND JANE DOE VICTIMS, AS A CLASS v. GOLDEN & WALTERS, PLLC; J. DALE GOLDEN; EUGENE GOSS; MARK DAVID GOSS; FERNANDEZ FRIEDMAN GROSSMAN & KOHN, PLLC; DAVID A. FRIEDMAN; ROBERT E. REEVES; REEVES & ASSOCIATES; BARRY LYNN DEMUS, JR.; OCTAVIUS GILLIS; CHRISTOPHER ANDRE WILLIAMS; CRAIG JOHNSON; DAVID T. JONES; AND JOHN DOE NOS. 1-16
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RENDERED:
SEPTEMBER 9, 2005; 2:00 p.m.
TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2004-CA-000639-MR
JOHN DOE #1-77; JANE DOE #1-19,
AND ALL OTHER SIMILARLY-SITUATED,
BUT AS YET UNKNOWN JOHN DOE
AND JANE DOE VICTIMS, AS A CLASS
v.
APPELLANTS
APPEAL FROM FAYETTE CIRCUIT COURT
HONORABLE PAMELA R. GOODWINE, JUDGE
CIVIL ACTION NO. 03-CI-02737
GOLDEN & WALTERS, PLLC;
J. DALE GOLDEN; EUGENE GOSS; MARK DAVID GOSS;
FERNANDEZ FRIEDMAN GROSSMAN & KOHN, PLLC;
DAVID A. FRIEDMAN;
ROBERT E. REEVES; REEVES & ASSOCIATES;
BARRY LYNN DEMUS, JR.; OCTAVIUS GILLIS;
CHRISTOPHER ANDRE WILLIAMS; CRAIG JOHNSON;
DAVID T. JONES; AND JOHN DOE NOS. 1-16
OPINION REVERSING AND
REMANDING WITH DIRECTION
** ** ** ** **
APPELLEES
BEFORE:
HENRY AND MINTON, JUDGES; HUDDLESTON, SENIOR JUDGE. 1
MINTON, JUDGE:
I.
INTRODUCTION.
This case arises out of a series of federal class
actions filed in the United States District Court for the
Eastern District of Kentucky: Guy v. Lexington-Fayette Urban
County Government 2 (Guy); Doe #1-9 v. Miller 3 (Doe I);
Doe #1-33 v. Lexington-Fayette Urban County Government 4 (Doe II);
Doe #1-44 v. Lexington-Fayette Urban County Government 5
(Doe III); and Doe v. Miller. 6
Each was filed on behalf of the
same class of plaintiffs, discussed below, and alleged civil
rights violations by the Lexington-Fayette Urban County
Government (LFUCG). 7
The instant case was filed as a class
1
Senior Judge Joseph R. Huddleston sitting as Special Judge by
assignment of the Chief Justice pursuant to Section 110(5)(b) of the
Kentucky Constitution and KRS 21.580.
2
Case no. 98-00431, filed October 15, 1998.
3
Case no. 00-00166, filed May 3, 2000.
4
Case no. 02-00439, filed September 25, 2002.
5
Case no. 03-00012, filed January 13, 2003.
6
Case no. 00-00166. This shared case number suggests that this case
was consolidated with Doe I, but this is not clear from the record.
It is also unclear when Doe v. Miller was filed.
7
Some of the later federal class actions named additional defendants
and additional causes of action, but the exact identity of these
defendants or causes of action is not relevant for the purposes of
this opinion.
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action case in Fayette Circuit Court, ostensibly by some or all
of the named plaintiffs 8 of Doe II and Doe III. 9
The Appellants
allege that they are members of the class of plaintiffs on whose
behalf Guy and Doe I were filed.
They brought this suit against
the named plaintiffs of Guy and Doe I, 10 the named plaintiffs’
attorneys, 11 and the attorneys’ corresponding law firms 12 after
the Appellants’ claims against LFUCG were dismissed as timebarred in Doe II and Doe III.
The Appellants allege that they
would not have lost the opportunity to pursue their otherwise
viable claims against LFUCG if not for certain acts and
8
In this opinion, the phrase “named plaintiffs” is used to
distinguish any plaintiffs who are specifically identified in the
pleadings as parties, even if only by a pseudonym, from the putative
class members. All of the named plaintiffs in the instant case
actually filed using John Doe or Jane Doe pseudonyms, as did the
named plaintiffs in Doe I, Doe II, and Doe III.
9
See Doe v. LFUCG, 407 F.3d 755, 759-760 (6th Cir. 2005), filed
May 5, 2005, petition for reh’g en banc filed May 19, 2005, reh’g
en banc denied August 12, 2005. As of the writing of this opinion,
the mandate had not been issued, meaning that Doe v. LFUCG was not
yet final. See infra for details on how and why we have taken
judicial notice of this opinion. We cannot independently verify
whether the Appellants in the instant case are the named plaintiffs
of Doe II and Doe III because of the use of pseudonyms. See supra
n.7.
10
This group of Appellees will be referred to as “the Plaintiff
Appellees” when necessary to distinguish them from the other
Appellees.
11
This group of Appellees will be referred to as “the Attorney
Appellees” when necessary to distinguish them from the other
Appellees.
12
The law firms appear to be included solely on the theory of
respondeat superior based on the actions of the attorneys affiliated
with these law firms. Because of our holding, we need not address
the law firms separately.
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omissions committed by the Appellees during the litigation of
Guy and Doe I.
The Appellants have asserted claims for attorney
malpractice (breach of duty based on attorney-client
relationship), breach of fiduciary duty, and fraudulent
misrepresentation.
The Appellants appeal from two orders of the trial
court that had the combined effect of granting summary judgment
in favor of each of the Appellees on all claims.
After these
summary judgment orders were issued and this appeal was filed,
the United States Court of Appeals for the Sixth Circuit issued
an opinion on May 5, 2005, in Doe v. Lexington-Fayette Urban
County Government (Doe v. LFUCG), a consolidated appeal of Guy,
Doe I, Doe II, Doe III, and Doe v. Miller.
Therefore, we also
must consider the effect of this federal consolidated appeal on
this matter.
We hold that the Fayette Circuit Court lacked subject
matter jurisdiction of the instant case because it was filed
prematurely before any of the causes of action asserted ever
accrued.
Accordingly, we reverse the trial court’s summary
judgment orders, which dismissed all of the claims against the
Appellees, with prejudice; and we remand with instructions to
dismiss these unripe claims, without prejudice.
The Sixth
Circuit’s opinion in the consolidated appeal, Doe v. LFUCG, has
no effect on our holding as it could not and did not resolve the
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Fayette Circuit Court’s lack of subject matter jurisdiction in
the instant case.
II.
A.
BACKGROUND.
Judicial Notice.
Any attempt to address the case at hand must begin
with an understanding of the underlying federal class actions.
However, the record before us is incomplete with regard to the
procedural history of these federal cases.
So, in the interest
of judicial economy, we must resort to judicial notice to fill
in the gaps in the chronology of the federal litigation.
The concept of judicial notice has been codified in
Kentucky Rules of Evidence (KRE) 201.
notice sua sponte. 13
A court may take judicial
Moreover, “[j]udicial notice may be taken
at any stage of the proceeding.” 14
In his highly respected
treatise on Kentucky evidence law, Professor Robert G. Lawson
notes that this provision merely codified the common law of
Kentucky which recognized the authority of an appellate court to
take judicial notice of an appropriate fact. 15
This is
13
See KRE 201(c) (stating that “[a] court may take judicial notice,
whether requested or not.”)
14
KRE 201(f).
15
ROBERT G. LAWSON, THE KENTUCKY EVIDENCE LAW HANDBOOK, § 1.00[5][d], at 19
(4th ed. 2003) (citing as examples of this case law Parkrite Auto
Park, Inc. v. Shea, 314 Ky. 520, 235 S.W.2d 986 (1950), and White v.
Crouch, 280 Ky. 637, 133 S.W.2d 753 (1939)).
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consistent with language in the Kentucky Rules of Civil
Procedure (CR) concerning what information must be included in
the appendix of an appellate brief.
CR 76.12(4)(c)(vii) creates
an exception for “matters of which the appellate court may take
judicial notice” to the general rule that materials and
documents not in the record may not be introduced or used as
exhibits in an appendix in support of an appellate brief.
But
Lawson warns that judicial notice should be used cautiously on
appeal so as not to subvert the rules concerning preservation of
error. 16
KRE 201(b) states in relevant part that “[a]
judicially noticed fact must be one not subject to reasonable
dispute . . . .”
One type of judicially noticed fact that is
not subject to reasonable dispute is a fact “[c]apable of
accurate and ready determination by resort to sources whose
accuracy cannot reasonably be questioned.” 17
Lawson provides
helpful guidance regarding how KRE 201 should be interpreted
with respect to taking judicial notice of court records.
He
writes that the critical inquiry is focused not “upon the
general noticeability of court records” but, rather, “upon the
16
LAWSON, § 1.00[5][d], at 19-20.
17
KRE 201(b)(2).
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noticeability of indisputable facts that happen to be verified
by court records.” 18
Lawson elaborates as follows:
The propriety of taking notice in a given
situation would depend first of all upon
whether the fact in question is indisputable
and secondly upon whether the fact is
“capable of accurate and ready determination
by resort to sources whose accuracy cannot
reasonably be questioned.” It is not
critical that that fact is contained in a
court record, but rather that it is capable
of verification by resort to a readily
available and accurate source of information
(which just happens to be court records). 19
We take judicial notice of the content of the federal
clerk’s docket sheets for Guy, Doe I, Doe II, and Doe III.
All
of the information contained in these docket sheets is available
through the Public Access to Court Electronic Records (PACER)
database, which may be accessed via the internet. 20
Specifically, we take judicial notice of the chronology of dates
18
LAWSON, § 1.00[4][b], at 15.
19
Id. (parentheses in original) (footnote omitted).
20
PACER “is an electronic public access service that allows users to
obtain case and docket information from Federal Appellate, District
and Bankruptcy courts and from the U.S. Party/Case Index.”
http://pacer.psc.uscourts.gov/pacerdesc.html (last visited on
August 16, 2005). PACER is a service of the United States Judiciary
and is operated by the Administrative Office of the United States
Court. Id. However, each federal court maintains its own database
with case information. Id. Access to the United States District
Court for the Eastern District of Kentucky may be accessed by
clicking a link at http://pacer.psc.uscourts.gov/cgi-bin/
links.pl#DCCTS (last visited on August 16, 2005) or by going
directly to that Court’s homepage for access to its electronic case
filing (ECF)/PACER website at https://ecf.kyed.uscourts.gov/cgibin/login.pl (last visited August 16, 2005).
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of case events, the nature of these events, and the case status
for each of these four federal cases as contained in the docket
sheets.
We are cognizant that judicial notice should be used
cautiously on appeal, but the noticed information is necessary
to determine whether the Fayette Circuit Court had subject
matter jurisdiction in the instant case.
The noticed
information is capable of accurate and ready determination
through PACER or by obtaining the information from the federal
clerk.
And because the information in the docket sheets
concerning the procedural history of Guy, Doe I, Doe II, and
Doe III is controlled by the clerk of the United States District
Court for the Eastern District of Kentucky, the accuracy of the
information provided, such as the date a particular motion was
filed or the date the federal district court denied
certification, cannot reasonably be questioned.
Therefore, the
information contained in the docket sheets is a proper subject
for judicial notice.
The Court also takes judicial notice of the opinion
issued on May 5, 2005, by the Sixth Circuit in Doe v. LFUCG, a
consolidated appeal of Guy, Doe I, Doe II, Doe III, and Doe v.
Miller.
Because this federal appeal was decided after the trial
court entered the summary judgments in the instant case, the
parties had no opportunity to include it in the record.
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As is
explained in detail below, the opinion in Doe v. LFUCG was not
yet final as of the date this opinion was written.
this would preclude us from citing this opinion.
Ordinarily
Nevertheless,
we take judicial notice of it to consider whether its effect or
potential effect on the four underlying federal class actions
has any bearing on the ripeness of the claims in the instant
case and the question of whether the trial court had subject
matter jurisdiction over the instant case. 21
We do not seek to
take notice of the propriety or correctness of the Sixth
Circuit’s decision but, rather, to take notice of the court’s
judicial act.
Although not yet final, the fact of the Sixth
Circuit’s opinion in Doe v. LFUCG and its contents cannot
reasonably be questioned.
Moreover, this information is capable
of ready determination as the opinion is available from the
Sixth Circuit, the Federal Reporter, 22 and Westlaw.
B.
Procedural History.
1.
Guy.
Guy was filed on October 15, 1998, by four named
plaintiffs on behalf of themselves and a class of similarlysituated persons who were allegedly sexually abused as minors by
21
Cf. Hocker v. Fisher, 590 S.W.2d 342, 343 n.1 (Ky.App. 1979) (taking
judicial notice of an opinion of the Kentucky Court of Appeals in
another case because it stated a fact which was controlling in the
matter before the Court, despite the fact that that case was
unpublished and could not be cited).
22
407 F.3d 755.
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Ron Berry through their involvement with Micro-City Government.
Berry was the director of Micro-City Government, a nonprofit,
community service program for disadvantaged youth 23 that was
sponsored and funded, in part, by LFUCG.
The action alleged
that LFUCG violated the plaintiffs’ civil rights because it
continued to fund Micro-City Government, despite having
knowledge that Berry was a sexual predator.
Before any ruling had been made on the issue of class
certification, the named plaintiffs of Guy filed a joint motion
with LFUCG to enter an agreed order of dismissal based on a
tentative settlement agreement making no provisions for putative
class members.
Craig Johnson and David Jones, who were not
named plaintiffs, then moved to be allowed to represent the
putative class of plaintiffs.
They also filed a motion seeking
to require the district court to issue notice to the putative
class members of any settlement or denial of certification.
They later filed a motion to intervene and an intervening
complaint.
On February 4, 2000, the district court entered an
order approving the settlement of three of the four named
plaintiffs with LFUCG and dismissing their claims against LFUCG,
with prejudice.
The district court denied the joint motion of
Johnson and Jones to intervene but noted that the statute of
23
See Berry v. Commonwealth, 84 S.W.3d 82, 84-85 (Ky.App. 2001).
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limitations remained tolled for them and for all putative class
members of Guy until the denial of class certification or the
dismissal of the case.
After a hearing, the district court
entered an order on February 28, 2000, rejecting a pro se motion
by the fourth named plaintiff to disapprove the settlement.
The
order approved the settlement between LFUCG and the fourth named
plaintiff and dismissed his claims against LFUCG.
Although there was no party left in the case to urge
class certification, the district court ruled on that issue in
an April 4, 2000, order.
The district court found that the fact
that additional putative class members had not presented
themselves since the suit was filed in October 1998, despite
considerable publicity surrounding the case, indicated that the
class was likely not so numerous that joinder was impracticable,
one of the prerequisites of a federal class action. 24
Further,
the court ruled that notice to putative class members was not
warranted because the class failed to meet the prerequisites for
certification.
2.
Doe I.
A second class action, Doe I, was filed on May 3,
2000, by a group of named plaintiffs, which ostensibly included
24
See Federal Rules of Civil Procedure (Fed.R.Civ.P.) 23(a).
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Johnson and Jones, 25 who had been unable to intervene in Guy.
Filed on behalf of the same class as Guy, Doe I also raised
essentially the same civil rights claims against LFUCG.
Before
the district court had ruled on the issue of certification in
Doe I, the named plaintiffs entered into a tentative settlement
agreement with LFUCG making no provision for the putative class
members.
This agreement was expressly contingent on the denial
of class certification.
And on June 28, 2002, the trial court
entered an order denying class certification, approving the
settlement agreement, and dismissing the case.
No notice was
given to the putative class members of the denial of
certification or of the settlement.
3.
Doe II.
The third class action, Doe II, was filed on
September 25, 2002, by a group of named plaintiffs on behalf of
the same class as Guy and Doe I.
rights claims against LFUCG.
Doe II also raised civil
The district court denied class
certification, holding that the plaintiffs of Doe II were
collaterally estopped from relitigating the merits of class
certification based on the denial of certification in Doe I.
On April 25, 2003, the district court dismissed as time-barred
all the claims of all of the named plaintiffs except for one
25
See Doe v. LFUCG, 407 F.3d at 759. We cannot independently confirm
that Johnson and Jones were among the named plaintiffs filing Doe I,
however, because all of the named plaintiffs filed under pseudonyms.
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Doe II plaintiff.
Some of the claims of the remaining named
Doe II plaintiff were also dismissed at that time as timebarred.
Ultimately, the remaining claims of the remaining
plaintiffs were dismissed as time-barred on August 22, 2003.
4.
Doe III.
Doe III was filed against LFUCG on January 13, 2003,
by a group of named plaintiffs on behalf of the same class as
the three previous cases.
On November 21, 2003, the federal
district court ruled that the plaintiffs’ claims in Doe III were
time-barred.
5.
Doe v. Miller.
According to the Sixth Circuit’s opinion in Doe v.
LFUCG, the named Appellants of Doe III also filed another
related case:
Doe v. Miller. 26
Doe v. Miller is slightly
different in focus from the earlier cases.
The plaintiffs of
Doe v. Miller sought to intervene in Guy and Doe I under
Fed.R.Civ.P. 60(b)(4), alleging that the lack of notice to the
putative class members of those cases violated due process and
rendered those judgments void. 27
These claims were purportedly
rejected by the district court in an October 7, 2002, order. 28
26
See id. at 760; see id. at n.6.
27
Id.
28
Id.
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6.
The Instant Case.
The instant case was filed as a class action in
Fayette Circuit Court on June 27, 2003, after most of the claims
in Doe II had been dismissed by the federal district court as
time-barred but before the claims in Doe III were dismissed.
Before the trial court could address the issue of certification,
it ruled on the motions that resulted in the summary judgments
now on appeal.
On February 24, 2004, the trial court granted the
joint motion of Attorney Appellees Mark David Goss and Eugene
Goss for summary judgment.
The trial court ruled that any duty
owed by Mark David Goss to the putative class ceased to exist
when he was permitted to withdraw as counsel of record for the
class.
It further held that Eugene Goss never owed a duty to
the putative class members because his only role in either Guy
or Doe I was representing the interest of a single plaintiff in
Doe I, John Doe #18.
Eugene Goss never purported to represent
the class.
On March 1, 2004, the trial court granted the motions
of each of the remaining Attorney Appellees to dismiss the
claims against them for failure to state a claim upon which
relief may be granted.
In the absence of any clear precedent,
the trial court expressed a reluctance to extend the concept of
an attorney-client relationship to include a relationship
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between the attorneys filing a class action and the putative
class members that exists before certification of the class or
after the denial of certification.
But the trial court also
ruled that the Appellants could not make a claim for attorney
malpractice because, even absent the Appellees’ alleged
malpractice, the Appellants would not have prevailed in the
underlying actions.
The trial court based this decision, in
part, on the federal district court’s rulings in Guy, Doe I, Doe
II, and Doe III.
Because the trial court considered evidence
beyond the pleadings in rendering its decision, this decision
must be considered a summary judgment. 29
The March 1, 2004, order also granted the motion of
Plaintiff Appellee Craig Johnson for a judgment on the pleadings
on the ground that any fiduciary duty that he might have owed to
the putative class members ceased when the federal district
court denied certification.
None of the other Plaintiff
Appellees, none of whom are represented by counsel, filed a
motion for judgment on the pleadings.
Nevertheless, the trial
court granted judgment on the pleadings to each of the remaining
Plaintiff Appellees because it found that the ruling regarding
Johnson also extended to these Appellees as a matter of law.
The trial court considered evidence outside of the pleadings in
rendering its decisions with regard to the remaining Attorney
29
CR 12.03.
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Appellees and Plaintiff Appellee Johnson and the other Plaintiff
Appellees.
For the reasons noted above, we must consider that
the trial court actually granted summary judgment in favor of
each of these Appellees, notwithstanding the terminology used by
the trial court.
The Appellants filed a timely appeal of both
the March 1, 2004, order and the February 24, 2004, order.
7.
Doe v. LFUCG.
On May 5, 2005, the United States Court of Appeals for
the Sixth Circuit issued its opinion in Doe v LFUCG, 30 which
addressed the outstanding appeals of Guy, Doe I, Doe II, Doe
III, and the attempt by some or all of the Appellants to
intervene in Guy and Doe I.
These cases were before the Sixth
Circuit in various procedural postures; some involved direct
appeals, while others involved appeals from orders denying postjudgment motions for relief.
One of the matters addressed was
whether the judgments in Guy and Doe I should be vacated under
Fed.R.Civ.P. 60(b)(4). 31
The Sixth Circuit held that the
district court had abused its discretion in both cases by
failing to notify putative class members of the denial of
certification because, under the specific circumstances, the
30
407 F.3d 755.
31
Id. at 761.
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putative class members were likely to be prejudiced. 32
Nevertheless, the Sixth Circuit declined to vacate the judgment
in Doe I because the settlement agreement between the named
plaintiffs and LFUCG was expressly contingent on the dismissal
of the class action. 33
But the settlement agreement in Guy was
not contingent on the dismissal of the class action.
The Sixth
Circuit vacated the district court’s order in Guy that had
dismissed the class action and approved the settlement
agreement.
This allowed the Sixth Circuit to reach “the
equitable result of allowing the [putative class members] to go
forward with their case while preserving the settlement reached
by the Doe I parties.” 34
The court also made it clear that upon
remand, the district court must decide anew the issue of class
certification in Guy on the merits. 35
On May 19, 2005, petitions
were filed with the Sixth Circuit for an en banc rehearing in
Guy, Doe I, Doe II, and Doe III.
August 12, 2005.
These petitions were denied on
But as of the date this opinion was written,
32
Id. at 763-764. The Court noted that prejudice was likely in Guy
and Doe I because there was reason to believe that there were a
large number of absent or putative potential class members. It also
noted that the notoriety of these cases made it more likely that a
putative class member might have heard about the class action and
suit and relied upon it to protect his rights. Id.
33
Id. at 765.
34
Id. at 764 (italics in original).
35
Id. at 767.
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the mandate had not yet been issued; and Doe v. LFUCG was not
yet final. 36
Because the opinion of Doe v. LFUCG was filed after
the deadline for appellate briefing in the case at hand, the
parties were granted the opportunity to file supplemental briefs
to address the effect of the opinion in the consolidated federal
appeal on this appeal.
The parties also had the opportunity to
address Doe v. LFUCG at oral argument.
III.
A.
ANALYSIS.
Nature of Damages.
The Appellants have asserted that the Appellees
committed the following acts or omissions during the litigation
of Guy and Doe I:
falsely representing that they would protect
the interests of the putative class members, entering into
settlement agreements with LFUCG that benefited only the named
plaintiffs, failing to push for certification or acquiescing
with LFUCG’s motion to deny certification, and failing to give
notice to the putative class members of the denial of
certification.
The Appellants have asserted three causes of
action against the Appellees:
legal malpractice (based on
breach of attorney-client relationship), breach of fiduciary
36
See infra for an explanation of the role of the mandate as it
relates to the finality of a decision by the Sixth Circuit.
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duty, and fraudulent misrepresentation.
Each of these causes of
action is predicated on the existence of cognizable damages or
injury. 37
And for each of the causes of action raised in the
instant case, the same damages are asserted by the Appellants.
The Appellants allege that they were injured because the
Appellees’ acts and omissions rendered the Appellants unable to
participate in Guy and Doe I, leaving the Appellants without a
remedy for their otherwise viable claims against LFUCG when
these claims later were deemed time-barred in Doe II and Doe
III.
The injury asserted by the Appellants is the lost
opportunity to pursue their otherwise viable claims.
B.
Ripeness.
The issue of ripeness was never raised by the parties
or the trial court.
claim.
But ripeness is an element of a justiciable
Section 112(5) of the Kentucky Constitution states in
relevant part that “[t]he Circuit Court shall have original
jurisdiction of all justiciable causes not vested in some other
court.”
37
Questions that may never arise or are purely advisory
Marrs v. Kelly, 95 S.W.3d 856, 860 (Ky. 2003) (stating as one of the
elements of a claim for legal malpractice that the client has
suffered an injury proximately caused by the attorney’s negligent
conduct); Sparks v. Re/Max Allstar Realty, Inc., 55 S.W.3d 343, 348
n.15 (Ky.App. 2000) (setting forth as an element of a claim for
breach of fiduciary duty the requirement that the plaintiff has
suffered an injury caused by the breach of duty); Wahba v. Don
Corlett Motors, Inc., 573 S.W.2d 357, 359 (Ky.App. 1978) (stating as
an element of a claim of fraudulent misrepresentation that the
misrepresentation has caused injury).
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or hypothetical do not establish a justiciable controversy. 38
Because an unripe claim is not justiciable, 39 the circuit court
has no subject matter jurisdiction over it. 40
It is well-
established that the issue of subject matter jurisdiction can be
raised at any time, even sua sponte, 41 as it cannot be acquired
by waiver, consent, or estoppel. 42
As discussed below, the ripeness of the Appellants’
claims depends on whether their damages asserted are fixed and
non-speculative.
Because the Appellants have asserted the same
damages for all three causes of action, these damages would
become fixed and non-speculative for all three causes of action
at the same time.
The damages asserted by the Appellants
supporting all of their claims⎯the lost opportunity to pursue
their otherwise viable claims against LFUCG⎯are the type of
damages commonly asserted in legal malpractice actions.
So we
38
Curry v. Coyne, 992 S.W.2d 858, 860 (Ky.App. 1998).
39
See id.
40
See Ky. Const. § 112(5). Cf. Anderson v. Cabinet for Human
Resources, 917 S.W.2d 581, 583-584 (Ky.App. 1996) (reversing a
decision of the circuit court that held that the appellant’s right
to judicial review of a decision by the Cabinet had expired and
remanding the case back to the Cabinet for further administrative
proceedings on the ground that the appellant’s right to judicial
review “has never ripened into justiciability” because the Cabinet
had never given the appellant notice of his right to appeal its
decision as specifically required by an administrative regulation).
41
Commonwealth Health Corp. v. Croslin, 920 S.W.2d 46, 47 (Ky. 1996).
42
Id., Duncan v. O’Nan, 451 S.W.2d 626, 631 (Ky. 1970).
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will analyze the ripeness issue as it relates to the Appellants’
legal malpractice claim for the sake of convenience.
But if the
Appellants’ legal malpractice claim is unripe because the
damages are not fixed, this would also apply to the Appellants’
claims for breach of fiduciary duty and fraudulent
misrepresentation that rest on the same damages.
C.
Accrual of Cause of Action for Legal Malpractice.
Because statutes of limitations are based on the
accrual of a cause of action, they begin to run from the time
the cause of action comes into existence. 43
To determine when or
if a cause of action for legal malpractice accrued in the
instant case, we look to the relevant statue of limitations,
KRS 413.245.
KRS 413.245 states, in relevant part, that an
action for professional services negligence “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.”
This statute has been
construed as establishing “actually two separate statutes of
limitations:
one, a statute limiting to ‘one year from the date
of occurrence,’ and then a second statute providing a limit of
‘one year . . . from the date when the cause of action was, or
43
Caudill v. Arnett, 481 S.W.2d 668, 669 (Ky. 1972).
-21-
reasonably should have been, discovered by the party injured,’
if that date is later in time.” 44
“Occurrence” has been construed as synonymous with
“cause of action” in KRS 413.245 based on the statutory
language. 45
Moreover, the Kentucky Supreme Court has cited, with
approval, the following statutory construction by a federal
court:
“‘[T]he use of the word “occurrence” in KRS 413.245
indicates a legislative policy that there should be some
definable, readily ascertainable event which triggers the
statute.’” 46
This triggering event is “the date of ‘irrevocable
non-speculative injury.’” 47
The statute of limitations for legal
malpractice does not begin to run “[u]ntil the legal harm
[becomes] fixed and non-speculative[.]” 48
The discovery provision of KRS 413.245 does not come
into play if a suit for legal malpractice was filed within one
year from the date of occurrence. 49
Logically, a party may not
44
Michels v. Sklavos, 869 S.W.2d 728, 730 (Ky. 1994) (internal
quotations, including ellipsis, as in original).
45
Id.
46
Id. (quoting Northwestern National Insurance Co. v. Osborne,
610 F.Supp. 126, 128 (D.C.Ky. [E.D. Ky.] 1985)) (quotation as in
Michels, including internal quotation marks and brackets).
47
Id. (quoting Osborne, 610 F.Supp. at 128).
48
Alagia, Day, Trautwein & Smith v. Broadbent, 882 S.W.2d 121, 125-126
(Ky. 1994).
49
Michels, 869 S.W.2d at 730.
-22-
“discover” a cause of action that does not yet exist. 50
Any
other interpretation of KRS 413.245 would allow the statute of
limitations to begin running and possibly even expire before a
cause of action for legal malpractice has accrued, which is the
function of a statute of repose not a statute of limitations. 51
This raises the question of when the damages for legal
malpractice become fixed and non-speculative.
One type of
negligent conduct on which a legal malpractice claim might be
based is litigation negligence, which has been described as “the
attorney’s negligence in the preparation and presentation of a
litigated claim resulting in the failure of an otherwise valid
claim[.]” 52
When a claim for legal malpractice is based on
litigation negligence, whether the attorney’s negligence has
caused any injury or damages necessarily is contingent on the
final outcome of the underlying case. 53
Any alleged injury is
merely speculative until the result of the appeal of the
underlying litigation is final and the trial court’s judgment
becomes “the unalterable law of the case.” 54
A panel of this
50
Hibbard v. Taylor, 837 S.W.2d 500, 501 (Ky. 1992).
Denison, 64 S.W.3d 297, 299-300 (Ky.App. 2001).
51
Michels, 869 S.W.2d at 730.
52
Id.
53
Michels, 869 S.W.2d at 730; Hibbard, 837 S.W.2d at 501-502.
54
Hibbard, 837 S.W.2d at 502. This holding of Hibbard was reaffirmed
in Michels, 869 S.W.2d at 733.
-23-
Cf. Stephens v.
Court has even held that any damages allegedly suffered as a
result of a legal malpractice claim did not become fixed and
non-speculative until the Kentucky Supreme Court denied
discretionary review of the underlying case in which the
malpractice allegedly occurred. 55
But a post-judgment motion for
relief under Rule 60.02 of the Kentucky Rules for Civil
Procedure (CR) does not affect the finality of an appeal. 56
The
fact that a client may have learned of the attorney’s allegedly
negligent conduct before the final adverse determination of the
underlying claim on appeal cannot trigger the running of the
statute of limitations until the cause of action has accrued. 57
And without legally cognizable damages, there is no ripe claim
for legal malpractice. 58
KRS 413.245 seems to demonstrate the public policy
balancing the interest in protecting persons who have been
injured by attorney malpractice with the interest in allowing
parties an opportunity to seek mitigation of damages in the
underlying claim and leaving the malpractice claim open until
that underlying claim is resolved.
This is especially important
because it is theoretically possible in a claim for attorney
55
Barker v. Miller, 918 S.W.2d 749, 751 (Ky.App. 1996).
56
Faris v. Stone, 103 S.W.3d 1, 4-5 (Ky. 2003)
57
Michels, 869 S.W.2d at 731.
58
Meade County Bank v. Wheatley, 910 S.W.2d 233, 234-235 (Ky. 1995).
-24-
malpractice for a party to be fully restored to the position
that he occupied before the negligent act or omission. 59
In such
a case, the malpractice claim would fail for lack of damages. 60
D.
Finality of Sixth Circuit Opinion.
Because the cases on which the Appellants’ claims for
damages are based are federal cases, we must consider when an
appeal before the Sixth Circuit is final.
mandate is issued.
It is final when the
As explained by the Sixth Circuit Internal
Operating Procedures (6th Cir. I.O.P.) 41(a), “[t]he mandate is
the document by which this Court relinquishes jurisdiction and
59
See, e.g., Mitchell v. Transamerica Insurance Co., 551 S.W.2d 586
(Ky.App. 1977) (holding that Appellants, who settled a personal
injury claim filed in federal court in Indiana, failed to establish
any damages in a malpractice claim against their original attorney
who had earlier let the Kentucky statute of limitations expire on
this personal injury claim because they could not show that they
received less damages than if they had been allowed to pursue their
claim in a Kentucky court). But see, e.g., Goff v. Justice,
120 S.W.3d 716 (Ky.App. 2002) (holding that ultimate settlement of
Appellants’ medical malpractice claim after attorney’s withdrawal
from action did not bar Appellants’ legal malpractice claim against
attorney where the attorney’s allegedly negligent actions had
resulted in court orders severely limiting the clients’ presentation
of expert witness testimony and had resulted in the dismissal of two
defendants from the medical malpractice case). The fact pattern of
the instant case illustrates the very harm sought to be avoided by
requiring finality of the underlying case before recognizing a cause
of action for legal malpractice based on litigation negligence.
Because of the lack of subject matter jurisdiction, we take no
position on whether the Sixth Circuit’s reopening of Guy places the
Appellants back in the same situation that they would have been in
if not for the alleged negligence of the Appellees, as in Mitchell,
or if they still suffered some injury, as in Goff. But it appears
that the reopening of Guy would certainly affect the damages
potentially recoverable by the Appellants if they proved to have any
otherwise viable claims.
60
Mitchell, 551 S.W.2d at 588.
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authorizes the originating district court . . . to enforce the
judgment of this Court.”
Ordinarily the mandate would issue
21 days after the entry of a judgment by the Sixth Circuit. 61
But the timely filing of a petition for rehearing en banc “stays
the mandate until disposition of the petition or motion, unless
the court orders otherwise.” 62
If the petition for rehearing
en banc is denied, the mandate would normally issue seven days
after the order denying the petition. 63
However, according to
Fed.R.Civ.P. 60(b), filing a post-judgment motion for relief
based on that provision “does not affect the finality of a
judgment or suspend its operation.”
E.
Accrual of the Appellants’ Cause of Action for Malpractice.
The alleged acts or omissions of the Attorney
Appellees’ on which the Appellants’ legal malpractice claims are
based occurred in the litigation of Guy and Doe I:
falsely
representing that they would protect the interests of the
putative class members; entering into settlement agreements with
LFUCG that benefited only the named plaintiffs; failing to push
for class certification or acquiescing to LFUCG’s motion to deny
certification; and failing to give notice to the putative class
members of the denial of certification.
Although these are
61
6th Cir. I.O.P. 41(a).
62
Federal Rules of Appellate Procedure (Fed.R.App.P.) 41(d)(1).
63
Fed.R.App.P. 41(b), 6 Cir. I.O.P. 41(b).
-26-
perhaps atypical of the types of negligent acts or omissions on
which most legal malpractice claims are based, 64 they,
nevertheless, fall within the category of litigation
negligence. 65
The instant case presents a unique issue.
The
Appellants allege that the Appellees’ negligent acts or
omissions occurred during the litigation of Guy and Doe I.
But
nothing occurring in these suits necessarily foreclosed the
Appellants’ claims against LFUCG or harmed the Appellants in any
way.
It was only after the Appellants learned in Doe II and
Doe III, respectively, that their causes of action against LFUCG
were deemed time-barred that the Appellants’ lost their
opportunity to pursue these claims that they allege were
otherwise valid.
This is the injury on which the Appellants’
malpractice claim is based.
The named plaintiffs of Doe II filed an appeal on
September 18, 2003, of multiple orders, including the district
court’s orders denying class certification and granting summary
64
We take
because
duty of
in this
65
Cf. Stephens, 64 S.W.3d at 300 (holding that despite the fact that
malpractice allegation based on failure to communicate a plea offer
“does not fit precisely within the definition of ‘litigation
negligence’ as defined in Michels, nevertheless, it is inescapable
that the same principle applies.” (quotation marks and italics in
original).
no position on whether these acts can rise to negligence
this depends, in part, on whether the Appellees owed any
care to the Appellants, a question which we do not address
opinion.
-27-
judgment against most of the named plaintiffs on the ground that
their claims were time-barred.
And the named plaintiffs of
Doe III filed an appeal on December 4, 2003, of the order which
granted summary judgment against them on the ground that their
claims were time-barred.
A legal malpractice claim by the
Appellants who were involved in Doe II based on their lost
ability to pursue their claims against LFUCG could not have
accrued until the appellate court affirmed the dismissal of
those claims as time-barred.
Similarly, the legal malpractice
claim by the Appellants whose claims were dismissed as timebarred in Doe III could not have accrued until the appellate
court affirmed the dismissal of their claims.
Until these
appeals were final and the dismissal of the Appellants’ claims
against LFUCG was the unalterable law of the case, the
Appellants’ damages for the alleged legal malpractice were
speculative. 66
The mere knowledge or belief by the Appellants
that the Appellees’ acted negligently is not enough to trigger
the running of the statute of limitations for legal malpractice
until the damages are fixed and non-speculative. 67
Two of the matters before the Sixth Circuit in Doe v.
LFUCG were the direct appeals of the orders dismissing the
claims in Doe II and Doe III, respectively, as time-barred.
66
Hibbard, 837 S.W.2d at 502.
67
Michels, 869 S.W.2d at 731.
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The
Sixth Circuit’s opinion in Doe v. LFUCG was not issued until
May 5, 2005; and the case is still not final because the mandate
has not been issued. 68
The instant case was filed on June 27, 2003, long
before the direct appeals of Doe II or Doe III were final.
The
injury on which the Appellants’ legal malpractice claim is based
is the Appellants’ lost opportunity to pursue their otherwise
valid claims against LFUCG after these claims were deemed timebarred in Doe II and Doe III.
Until the Sixth Circuit issued a
final opinion or opinions affirming the district court’s orders
dismissing the named plaintiffs’ claims in Doe II and Doe III,
the Appellants’ damages were merely speculative.
The Appellants
had not definitively lost their rights to pursue their claims
against LFUCG.
Therefore, no cause of action for legal
malpractice had accrued at the time the instant case was filed
in the Fayette Circuit Court.
The previous analysis has addressed the accrual of the
cause of action for the Appellants’ legal malpractice claim
only.
But, as previously noted, damages are an element of each
of the three claims asserted by the Appellants. 69
And the
Appellants asserted the same damages for each of their causes of
action.
Therefore, if the Appellants’ cause of action for legal
68
See 6th Cir. I.O.P. 41(a). The mandate was stayed most recently by
the filing on August 19, 2005, of a petition to stay its issuance.
69
See supra n.37.
-29-
malpractice had not accrued when the instant case was filed
because the damages were not yet fixed and non-speculative, 70
then the Appellants’ causes of action for breach of fiduciary
duty and fraudulent misrepresentation also must not have accrued
for the same reason.
None of the claims asserted by the
Appellants could accrue before Doe II and Doe III were affirmed
on appeal.
Yet the Appellants filed the instant case long
before that occurred.
Notably, when the trial court issued the
summary judgments on appeal, the causes of action still had not
accrued.
F.
Prematurely Filed Cause of Action.
We are faced with the question of what to do with a
case which was filed before any cause of action accrued.
We
note that this is not simply a prematurely filed appeal.
Instead, this is a case in which the very complaint was filed
before the asserted causes of action accrued.
In Lilly v. O’Brien, 71 Kentucky’s highest court was
faced with an election contest case that was filed before the
final action of the county board of election commissioners, the
event triggering the statutory right to contest an election. 72
The right to contest an election is purely a creation of
70
Hibbard, 837 S.W.2d at 502.
71
224 Ky. 474, 6 S.W.2d 715 (Ky. 1928).
72
Id. at 717-718.
-30-
statute. 73
Therefore, the statute must be strictly followed
because it grants the court subject matter jurisdiction where it
otherwise has none. 74
The cause of action eventually accrued when the county
board of election commissioners took its final action, which
occurred after the action was filed but before the trial court
ruled on the case. 75
An amended petition was filed after the
cause of action accrued. 76
The premature filing of the action
was not raised at the trial court level. 77
The appellate court
had to address whether the failure to raise the issue below
waived it, whether any jurisdictional defect in the prematurely
filed case was cured by the subsequent accrual of the cause of
action before the trial court ruled on the issue, or whether the
amended petition which was filed after the cause of action
accrued related back to the original complaint, curing any
jurisdictional defect in the premature filing. 78
The Court held in Lilly that the fact “that no cause
of action had accrued or existed when the suit was commenced
73
Id.
74
Id. at 718.
75
Id.
76
Id.
77
Id. at 719.
78
Id. at 718-719.
-31-
cannot be aided by amendment, or waived by delay in calling
attention to it.” 79
It also rejected the idea that the
subsequent accrual of the cause of action before the trial court
ruled on the case could cure the defect of a complaint filed
before a cause of action ever accrues and before subject matter
jurisdiction attached.
The Court stated that “the nonexistence
of a cause of action when the suit was started is a fatal
defect[.]” 80
The Lilly Court ultimately ruled that the
prematurely-filed case should be dismissed without prejudice. 81
Two other Kentucky cases have reached a different
conclusion on whether the issue of prematurity can be waived:
Farmers National Bank of Danville v. First Colored Baptist
Church of Danville 82 and Skinner v. Morrow, 83 which followed the
holding of Farmers National Bank of Danville.
In both cases,
the creditor of a decedent filed suit to settle the estate
before six months had elapsed from the time of the personal
79
Id. at 719 (citations omitted).
80
Id.
81
Id. See also Broyles v. Commonwealth, 309 Ky. 837, 219 S.W.2d 52,
54 (Ky. 1949) (holding that case for usurpation of office should be
dismissed, without prejudice, because it was filed before the
alleged-usurped ever assumed office and “[t]he later assumption of
the office and the amendment of the petition thereafter could not
give life to the premature petition”).
82
277 Ky. 521, 126 S.W.2d 1130 (Ky. 1939).
83
318 S.W.2d 419 (Ky. 1958). Although decided after Lilly, the Court
made no reference to Lilly in this opinion.
-32-
representative’s appointment, despite the fact that by statute,
only the personal representative is authorized to file such a
suit during that time period. 84
The Court held in Farmers
National Bank of Danville that the issue of prematurity was
waived because it was not raised before the trial court. 85
Moreover, the Court held that only the representative could
raise the issue. 86
We find these two cases involving the premature filing
of claim against the estate by someone other than a personal
representative to be distinguishable from Lilly in that these
two cases, unlike Lilly, do not involve subject matter
jurisdiction.
The rule regarding when a claim can be filed
against the estate by someone other than a personal
representative appears to be procedural in nature, akin to a
statue of limitations.
It does not convey the right to bring a
claim against the estate since that right already exists.
It
merely restricts when that right may be exercised.
84
Farmers National Bank of Danville, 126 S.W.2d at 1132. The relevant
statute at this time was Section 428 of the Civil Code of Practice.
Id.; Skinner, 318 S.W.2d at 423-424. The relevant statue at this
time was KRS 395.510. Id. at 424.
85
126 S.W.2d at 1132-1133.
86
Id., Skinner, 318 S.W.2d at 424.
-33-
The instant case involves a question of subject matter
jurisdiction as in Lilly.
The circuit court has jurisdiction
over justiciable claims. 87
An unripe claim is not justiciable. 88
Because the Appellants’ claims were filed before they were ripe,
the circuit court has no jurisdiction over the instant case.
Following the precedent established in Lilly, the Appellants’
claims should have been dismissed, without prejudice, for lack
of subject matter jurisdiction.
IV.
DISPOSITION.
For the reasons discussed in this opinion, we reverse
the summary judgment orders; and we remand this case to the
Fayette Circuit Court with direction to dismiss the case,
without prejudice.
ALL CONCUR.
BRIEFS AND ORAL ARGUMENT FOR
APPELLANT:
James M. Morris
Lexington, Kentucky
87
Guy R. Colson
Ellen Arvin Kennedy
Lexington, Kentucky
Ky. Const. § 112(5).
88
BRIEF AND ORAL ARGUMENT FOR
APPELLEES GOLDEN & WALTERS,
PLLC, AND J. DALE GOLDEN:
Curry, 992 S.W.2d at 860.
-34-
BRIEF AND ORAL ARGUMENT FOR
APPELLEES EUGENE GOSS AND MARK
DAVID GOSS:
Calvin R. Fulkerson
Melanie S. Marrs
Lexington, Kentucky
BRIEF AND ORAL ARGUMENT FOR
APPELLEES FERNANDEZ FRIEDMAN
GROSSMAN & KOHN, PLLC, AND
DAVID A. FRIEDMAN:
John M. Famularo
Alex L. Scutchfield
Lexington, Kentucky
BRIEF AND ORAL ARGUMENT FOR
APPELLEE CRAIG JOHNSON:
Linda B. Sullivan
Lexington, Kentucky
-35-
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