WINDHAM INVESTMENTS, INC. VS. ESDJ PROPERTIES, LLC.
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RENDERED: MARCH 18, 2011; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2009-CA-001440-MR
WINDHAM INVESTMENTS, INC.
v.
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE AUDRA J. ECKERLE, JUDGE
ACTION NO. 08-CI-010876
ESDJ PROPERTIES, LLC
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: LAMBERT AND MOORE, JUDGES; ISAAC,1 SENIOR JUDGE.
ISAAC, SENIOR JUDGE: Windham Investments, Inc. appeals from a Jefferson
Circuit Court order denying its motion to set aside a default on an agreed
judgment. We affirm.
1
Senior Judges Sheila R. Isaac sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and KRS 21.580.
On August 25, 2005, Windham executed a promissory note
acknowledging receipt of a loan of $80,000 from ESDJ Properties, LLC. On
October 14, 2008, ESDJ filed a complaint in Jefferson Circuit Court alleging that
Windham had failed to repay the loan in accordance with the terms of the note. A
bench trial was scheduled but before it was held the parties entered into an agreed
judgment which provided that ESDJ would recover $103,000 plus interest and
costs from Windham. The sum was to be paid in installments, with an
“acceleration clause” in the event that the payments were not made in a timely
manner. The pertinent portions of the agreed judgment provided as follows:
$1,000.00 to be paid by the Defendant [Windham] to the
Plaintiff [ESDJ] as set forth below on or before May 15,
2009 and on the fifteenth of each month thereafter, for
thirty (30) payments. The remaining balance to be paid
in full with accrued interest on the thirty-first (31st)
payment. However, no pre-payment penalty exists. The
above amount shall accrue interest in the amount of ten
percent (10%) per annum on the unpaid balance until
paid.
So long as said payments are made timely and without
fail, no execution or garnishment shall issue. Upon
default by the Defendant under the terms described
above, the entire amount of $103,000.00, less any
payments, shall be due and owing, including interest at
the rate of ten (10) percent per annum on said amount
calculated from August 2, 2005 until paid, plus any court
costs and/or attorney fees the Plaintiff may incur to be as
determined by the Court.
According to the affidavit of Jeff Owens, the President of Windham,
on May 15, 2009, the day that the first payment was due, his father-in-law was ill
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and a trip was planned to visit him in St. Louis. Owens wrote a check for $1,000
which did not name a payee and left the check with his secretary. She filled in the
name of the payee and Owens hand-delivered the check to ESDJ on the following
Monday, May 18, 2009. ESDJ refused to accept the payment and notified
Windham that it was in default. It also commenced garnishment proceedings.
Windham moved the court to overturn the default, to order ESDJ to accept the
tendered payments and to quash the garnishments. The circuit court denied the
motion after a hearing. This appeal by Windham followed.
Windham argues that the court erred in denying its motion to set aside
the default and to force ESDJ to accept the late payment because agreed judgments
are subject to collateral attack. In Browning v. Cornn, 240 S.W.3d 671 (Ky.App.
2007), it was held that a motion to alter, amend or vacate an agreed judgment was
only valid insofar as it was a collateral attack on that judgment on the grounds of
fraud or mistake.
An agreed judgment is nonetheless a judgment of the
court when entered and signed, although it is the
consummation of a contract. The terms of the contract
are merged into and superseded by the judgment. If that
judgment contains a judicial error, it is nevertheless
binding on all the parties. The fact that the consideration
for the contract failed cannot be regarded as nullifying
the judgment insofar as it is valid. If erroneous, the
remedy of the agreed party is by timely procedure in the
court rendering the judgment or by appeal to this court,
subject to the rule that a party will not be permitted to
complain on an appeal of a judgment to which he
consented, unless it is on the ground of fraud or mistake.
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Browning, 240 S.W.3d at 674 quoting Little v. Mann, 302 Ky. 661, 664, 195
S.W.2d 321, 323 (Ky.1946) (internal citations omitted).
Windham is alleging neither fraud nor mistake relating to the agreed
judgment. Windham merely wishes to be excused from the terms of the agreed
judgment on equitable grounds, arguing that its president was occupied with
pressing personal matters that prevented the timely payment of the first installment
and that ESDJ was not irreparably harmed by the late payment. Equitable
determinations are generally left to the circuit court’s discretion. In this case, we
can find no abuse of that discretion as the court’s decision was not “arbitrary,
unreasonable, unfair, or unsupported by sound legal principals.” Goodyear Tire &
Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky.2000).
The other cases relied upon by Windham are distinguishable. Harris
v. Greenleaf involved a lapsed payment on a real estate purchase contract, not an
agreed judgment. 117 Ky. 817, 79 S.W. 267 (1904). In Racing Investment Fund
2000, LLC v. Clay Ward Agency, Inc., 2008 WL 5102151 (Ky. 2008)(2007-CA002282-MR), this Court affirmed the trial court’s decision to find a party in civil
contempt for failing to pay the full amount of an insurance premium. Neither case
involves a challenge to an agreed judgment.
The order of the Jefferson Circuit Court is affirmed.
ALL CONCUR.
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BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Steven A. Snow
Louisville, Kentucky
Steven D. Yater
Louisville, Kentucky
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