RENDERED: FEBRUARY 25, 2011; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
JOSEPH STEVEN CLARK
APPEAL FROM MARION CIRCUIT COURT
HONORABLE DOUGHLAS M. GEORGE, JUDGE
ACTION NO. 08-CI-00485
HECTUS & STRAUSE PLLC,
AND C. THOMAS HECTUS
REVERSING AND REMANDING
** ** ** ** **
BEFORE: CLAYTON AND MOORE, JUDGES; LAMBERT,1 SENIOR JUDGE.
LAMBERT, SENIOR JUDGE: Joseph Steven Clark appeals from the Marion
Circuit Court’s entry of summary judgment in favor of Hectus & Strause, PLLC
Senior Judge Joseph E. Lambert sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes
and C. Thomas Hectus. Appellant filed suit against Appellees seeking
reimbursement of all or part of a $10,000 fee paid to Appellees during their
representation of Appellant in a criminal matter. Appellant contended that he was
entitled to reimbursement of all or some of this amount because his case did not go
to trial. Because the written fee agreement between the parties is ambiguous as to
the question of whether Appellant would be entitled to partial reimbursement of
the subject fee in the event that the case did not proceed to trial, we hold that
summary judgment was entered erroneously. Thus, we reverse and remand for
Appellant and a number of other defendants were charged in federal
court with conspiracy to traffic in cocaine. On September 13, 2003, Appellant
agreed to pay Appellees a retainer of $10,000 to represent him in the case. The
parties did not have a standard written fee agreement. Instead, the fee was part of a
“flat fee” arrangement set forth in correspondence between the parties.
On February 13, 2004, Appellee Hectus sent a letter to Appellant
indicating that further funds would be needed because it appeared likely that the
case would proceed to trial:
Finally, as you will recall, I had advised you that my
initial retainer will not cover the preparation and trial of
this case. It now appears that it is likely that we are
going to trial, and I will have to begin trial preparation in
earnest. The remainder of the trial fee, an additional
$10,000, will be due and payable within thirty (30) days.
On March 20, 2004, Appellant replied to this correspondence with a letter agreeing
to pay Appellees an additional flat fee of $10,000 “for preparation and trial fee of
for [sic] my case. This gives us a total of $20,000 to complete my case when we
go to trial.” At the bottom of this letter is the notation “agreed and accepted,”
Appellee Hectus’s signature, and the date “3/26/04.”2 Nothing else in the record
illustrates the intentions of the parties with respect to this sum.
Ultimately, Appellant’s case did not proceed to trial. Instead, he
entered a guilty plea one day before trial was set to begin and was later sentenced
to 140 months’ imprisonment. On July 7, 2008, Appellant sent a letter to
Appellees demanding a refund of the second $10,000 payment because his case
had been resolved prior to trial. Appellees refused this demand, and Appellant
filed the current action seeking reimbursement of this amount or part of it.
On July 6, 2009, Appellant filed a motion for summary judgment.
Appellees responded with their own motion for summary judgment on September
23, 2009. On November 25, 2009, the trial court entered an order granting
Appellees’ motion for summary judgment (and denying Appellant’s motion)
without further comment. This appeal followed.
On appeal, Appellant contends that summary judgment was entered
erroneously because of the existence of genuine issues of material fact that
remained to be resolved. He specifically argues that he is entitled to at least a
partial refund of the subject fee because he entered a guilty plea in lieu of going to
Appellees also handled two other unrelated criminal matters for Appellant in exchange for
$5,000. This sum is not at issue here.
trial and that a genuine factual dispute remains as to his entitlement to such.
Appellees argue in response that summary judgment was appropriately entered
because they fulfilled their obligations to Appellant – trial or no – and were
therefore entitled to retain the entire fee. The standards for reviewing a trial
court’s entry of summary judgment are well-established and were concisely
summarized by this Court in Lewis v. B & R Corp., 56 S.W.3d 432 (Ky. App.
The standard of review on appeal when a trial court
grants a motion for summary judgment is “whether the
trial court correctly found that there were no genuine
issues as to any material fact and that the moving party
was entitled to judgment as a matter of law.” The trial
court must view the evidence in the light most favorable
to the nonmoving party, and summary judgment should
be granted only if it appears impossible that the
nonmoving party will be able to produce evidence at trial
warranting a judgment in his favor. The moving party
bears the initial burden of showing that no genuine issue
of material fact exists, and then the burden shifts to the
party opposing summary judgment to present “at least
some affirmative evidence showing that there is a
genuine issue of material fact for trial.”
Id. at 436 (Internal footnotes and citations omitted). Because summary judgments
involve no fact finding, we review the trial court’s decision de novo. 3D Enters.
Contr. Corp. v. Louisville & Jefferson County Metro. Sewer Dist., 174 S.W.3d 440,
445 (Ky. 2005); Blevins v. Moran, 12 S.W.3d 698, 700 (Ky. App. 2000).
Resolution of this appeal necessarily requires consideration of the
parties’ written agreement with respect to the subject fee. Although the parties did
not have a standard contractual fee arrangement, they agree that Appellant’s letter
of March 20, 2004, reflects their agreement and was intended to serve as a contract
as to the $10,000 in dispute. Thus, our review is necessarily focused upon this
document as well as – to a lesser extent – the preceding letter from Appellees
setting forth their request for this amount.
“It is well settled that the interpretation of contracts is an issue of law
for the court to decide.” Equitania Ins. Co. v. Slone & Garrett, P.S.C., 191 S.W.3d
552, 556 (Ky. 2006). This includes determining whether a contract is ambiguous.
3D Enterprises Contracting Corp. v. Louisville and Jefferson County Metropolitan
Sewer Dist., 174 S.W.3d 440, 448 (Ky. 2005); Elmore v. Commonwealth, 236
S.W.3d 623, 626 (Ky. App. 2007). The intention of the parties as to a written
instrument generally must be gathered from the four corners of that instrument.
Equitania, 191 S.W.3d at 556. However, “if the writing is ambiguous, the factual
question of what the parties intended is for the jury to decide.” Id.; see also
Hunter v. Wehr Constructors, Inc., 875 S.W.2d 899, 901 (Ky. App. 1993).
In their letter of February 13, 2004, Appellees advised Appellant that
the initial $10,000 retainer paid by Appellant would “not cover the preparation and
trial of this case.” Thus, Appellees requested “[t]he remainder of the trial fee, an
additional $10,000.” A plain reading of this letter certainly suggests that this
$10,000 payment was intended to compensate Appellees for their efforts in trial
preparation and trial. Appellant responded to this request with a letter agreeing to
pay Appellees an additional flat fee of $10,000 “for preparation and trial fee of for
[sic] my case. This gives us a total of $20,000 to complete my case when we go to
trial.” (Emphasis added). Appellee Hectus acknowledged his acceptance to these
terms on the letter itself. Again, this language strongly suggests that the $10,000
payment was intended to cover trial preparation and trial. Appellees argue that the
fee “included trial preparation, as well as trial (if necessary),” but the parties’ fee
arrangement does not explicitly indicate that Appellees would be entitled to retain
the entire $10,000 in the event that there was no trial.3 Thus, we believe that the
fee arrangement between the parties was intended to pay for Appellees’ services in
trial preparation and trial.
However, with this said, the correspondence between the parties
contains nothing definitive on the question of what the parties anticipated and
intended with respect to the $10,000 – or a possible refund of a portion of that fee
– in the event that the case did not proceed to trial.4 While unearned payment
would normally be subject to reimbursement, we are compelled to conclude that
the subject documents are ambiguous on this subject. Because of this ambiguity,
summary judgment was prematurely entered and reversal and remand is required to
Appellees argue that the sentencing hearing that took place following Appellant’s guilty plea
should be considered a “trial” for purposes of this case, but we believe this argument has little
merit. The correspondence between the parties clearly anticipated a “trial” as that term is used in
the conventional sense, i.e., “[a] formal judicial examination of evidence and determination of
legal claims in an adversary proceeding.” BLACK’S LAW DICTIONARY 1543 (8th ed. 2004). In
contrast, a “sentencing hearing” (or “presentencing hearing”), is “[a] proceeding at which a judge
or jury receives and examines all relevant information regarding a convicted criminal and the
related offense before passing sentence.” Id. at 1221. The correspondence between the parties
clearly reflects a belief that Appellant’s case would proceed to a full-blown criminal trial with
both a merit phase and, if necessary, a sentencing phase.
Appellant acknowledges in his brief that a “portion” of the $10,000 “may very well have been
consumed for trial preparation.” Thus, he would not be entitled to a full refund of the $10,000.
resolve the issue. See, e.g., Equitania, 191 S.W.3d at 556. When an ambiguity
exists with respect to a contract:
“the court will gather, if possible, the intention of the
parties from the contract as a whole, and in doing so will
consider the subject matter of the contract, the situation
of the parties and the conditions under which the contract
was written,” by evaluating extrinsic evidence as to the
Frear v. P.T.A. Industries, Inc., 103 S.W.3d 99, 106 (Ky. 2003), quoting Whitlow
v. Whitlow, 267 S.W.2d 739, 740 (Ky. 1954); see also Holly Creek Production
Corp. v. Rose, 284 S.W.3d 542, 544 (Ky. App. 2009).
Appellant argues that the fee was intended to compensate Appellees,
in part, for their services during trial and that because a trial did not occur, it was
“inconceivable” that the entire amount was consumed. In response, Appellees
contend that they performed $10,000 worth of services even though the case was
not tried; therefore, they are obligated to retain the entire amount either pursuant to
the parties’ arrangement or to the theory of quantum meruit.5 In light of the
ambiguous nature of the parties’ fee agreement, their arguments clearly present
genuine issues of material fact that cannot be properly resolved via summary
judgment. Because the parties did not create a fee contract that addressed the issue
of who was entitled to what in the event that a trial did not take place, the question
will have to be resolved by a finder of fact.
Appellees spend a considerable portion of their brief detailing the amount of work that they did
on Appellant’s behalf. However, this effort – and Appellant’s response to such – only
emphasizes that factual disputes on these matters remain to be resolved by a finder of fact in
light of the imprecise nature of the parties’ contractual agreement.
For the foregoing reasons, the summary judgment entered by the
Marion Circuit Court is reversed, and this matter is hereby remanded for further
proceedings consistent with this opinion.
BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEE:
Joseph Steven Clark, pro se
C. Thomas Hectus