GEORGE W. PRIVETT. JR. V. HOLLY M. CLENDENIN
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RENDERED: AUGUST 23,200l
TO BE PUBLISHED
2000-SC-0127-DG
GEORGE W. PRIVETT. JR.
V.
ON REVIEW FROM COURT OF APPEALS
1998-CA-1797-MR
JESSAMINE CIRCUIT COURT NO. 96-Cl-15
HOLLY M. CLENDENIN
APPELLEE
OPINION OF THE COURT BY JUSTICE JOHNSTONE
AFFIRMING
Dr. George W. Privett, Jr., and Holly Clendenin were married for almost thirteen
years and were blessed with two children. While still married, Privett and Clendenin
established two accounts under the Kentucky Uniform Transfers to Minors Act (UTMA)
for the benefit of their children. Clendenin was named custodian of the accounts. After
their marriage was dissolved, Privett petitioned the Jessamine Circuit Court for relief
against Clendenin under the UTMA. The trial court ruled in Privett’s favor. The Court of
Appeals reversed on grounds that the Jessamine Circuit Court lacked subject-matter
jurisdiction over claims brought under the UTMA. We agree with the Court of Appeals
and affirm its decision.
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Privett and Clendenin were married on December 3, 1978. Their divorce was
finalized on October 1, 1991. Two children were born of the union. On November 16,
1987, an account for each of the children was established at the First Security Bank.
These accounts were closed on August 3, 1988. On the same date, two separate
mutual funds, one for each child, were established under the UTMA. Clendenin was
named custodian and each child was designated as co-owner of his or her respective
accounts. Sometime after their divorce, Clendenin withdrew Two Thousand Dollars
($2,000.00) from each account for the children to take a school-related trip to England
and France.
In his petition, Privet-t alleged that Clendenin violated her duties under the UTMA
by withdrawing money from the accounts for the trip. Privett alleged that the withdrawal
was made for a family vacation to Europe, rather than for educational purposes. Privett
claimed that, as a parent of the children, KRS 385.122(5) gave him the right to inspect
the accounts. Further, he alleged that Clendenin violated numerous provisions of the
UTMA by failing to keep proper records, by failing to observe the proper standard of
care, and by misusing funds.
The trial court ruled in Privett’s favor and ordered: (1) that Clendenin reimburse
the accounts for the withdrawals for the European trip “plus an amount to include the
loss of growth in the accounts” due to the withdrawals; (2) a full accounting; (3) that
Clendenin be removed as custodian; and (3) that Privett be made successor custodian
of the accounts. The Court of Appeals determined that the district court has exclusive
jurisdiction for all claims brought under the UTMA and, accordingly, held that the
Jessamine Circuit Court lacked subject-matter jurisdiction to hear Privett’s petition.
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Privett is both a “member of the minor’s family” and a “transferor” within the
meaning of the UTMA. See KRS 385.012(10) & (16). He clearly had the right under
the UTMA to bring his claims against Clendenin:
A minor who has attained the age of fourteen (14) years, the minor’s
guardian of the person or legal representative, an adult member of the
minor’s family, a transferor, or a transferor’s legal representative may
petition the court:
(a) For an accounting by the custodian or the
custodian’s legal representative; or
(b) For a determination of responsibility, as
between the custodial property and the
custodian personally, for claims against the
custodial property unless the responsibility has
been adjudicated in an action under KRS
385.172 to which the minor or the minor’s legal
representative was a party.
KRS 385.192(l).
Unfortunately for Privett, the UTMA grants exclusive jurisdiction over such claims
to the district court. The definition section of the UTMA provides that: “‘Court’ means
district court.” KRS 385.012(5). This definition was put into place by the Legislature in
1986 when it enacted the UTMA. 1986 Ky. Acts Ch. 182 § l(5). In the same Act that
created the UTMA, the Legislature repealed the Kentucky Uniform Gifts to Minors Act
(UGMA), which also was codified in KRS Chapter 385. Under the prior UGMA, “court”
was defined as “the chancery division of the circuit court.” 1966 Ky. Acts Ch. 202 §
l(d). Thus, the Legislature purposely removed jurisdiction from the circuit court for KRS
Chapter 385 claims and expressly placed jurisdiction over such claims in the district
court.
Under KRS 24A.020, the district courts are deemed to have exclusive jurisdiction
over any matter when jurisdiction is “granted to District Court by statute . . . unless the
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statute specifically states that the jurisdiction shall be concurrent.” As there is no
provision in the UTMA for concurrent jurisdiction with the circuit court, the Jessamine
Circuit Court lacked subject-matter jurisdiction to hear Privet-t’s petition. Therefore, we
hold that the district courts have exclusive subject-matter jurisdiction over claims
brought under the UTMA, even accounting claims that in all probability will involve sums
exceeding the district court’s jurisdictional limitation of $4,000 imposed by KRS 24A120.
See Kampschaefer v. Commonwealth ex rel. Kampschaefer, Ky. App., 746 S.W.2d
567, 568 (1988) (District courts may assert jurisdiction over URESA action regardless of
the amount of arrearages.).
“An ‘accounting’ is defined as an adjustment of the accounts of the parties and a
renderina of a iudament for the balance ascertained to be due.” 1 Am. Jur. 2d,
Accounts and Accounting § 52 (emphasis added). In construing a statute identical to
KRS 385.192(l), the Supreme Court of Colorado stated:
In our view, section 11-50-120(l)(a) contains an implied
grant of authority which permits a trial court to impose a wide
variety of remedies. Section 11-50-l 20( l)(a) authorizes the
court to order a custodian to account for funds held on
behalf of the minor. We construe this section as not only
allowing the trial court to require a custodian to provide a
statement of the account, but also as enabling the court to
render a judgment should the statement indicate that the
account had been improperly maintained.
Buder v. Sartore, 774 P.2d 1383, 1389 (Colo. 1989).
Subject-matter jurisdiction refers to a courts authority to determine “this kind of
case” as opposed to “this case.” Duncan v. O’Nan, Ky., 451 S.W.2d 626, 631 (1970).
Defects in subject-matter jurisdiction may be raised by the parties or the court at any
time and cannot be waived. Commonwealth Health Corp. v. Croslin, KY., 920 S.W.2d
46, 47 (1996) citing Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 152, 29 S. Ct.
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42, 43 (1908). Specifically, subject-matter jurisdiction may be raised for the first time on
appeal. Karahalios v. Krahalios, Ky. App., 848 S.W.2d 457, 460 (1993).
The Jessamine Circuit Court has no jurisdiction to hear a case brought under the
UTMA, i.e., this kind of case. The time at which the issue of subject-matter jurisdiction
was first raised and by whom is of no legal consequence. Therefore, we affirm the
decision of the Court of Appeals.
Lambert, C.J.; Cooper, Keller, Stumbo, and Wintersheimer, JJ., concur. Graves,
J., dissents by separate opinion.
COUNSEL FOR APPELLANT:
David T. Enlow
Enlow, Wright & Enlow
1850 Lexington Financial Center
250 West Main Street
Lexington, KY 40507
COUNSEL FOR APPELLEE:
Donald Duff
212 Washington Street
P. 0. Box 1160
Frankfort, KY 40602
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RENDERED: AUGUST 23,200l
TO BE PUBLISHED
2000-SC-0127-DG
GEORGE W. PRIVETT. JR.
V.
APPELLANT
ON REVIEW FROM COURT OF APPEALS
1998-CA-1797-MR
JESSAMINE CIRCUIT COURT NO. 96-Cl-15
HOLLY M. CLENDENIN
APPELLEE
DISSENTING OPINION BY JUSTICE GRAVES
Respectfully, I dissent.
This Court has unnecessarily circumscribed the jurisdiction of the circuit
court. By virtue of KRS 23A.010, the circuit court is a court of general jurisdiction that
has original jurisdiction of all justiciable causes not exclusively vested in some other
court. The question is, therefore, whether the statute here under review mandates that
actions of this type and kind be brought in district court.
The claim asserted by Appellant was for an accounting, removal of
Appellee as custodian, and for reimbursement of sums allegedly spent improperly.
Even though KRS 385.192(l) grants the district court jurisdiction for an
accounting or for a determination of responsibility for claims against the custodial
property, it does not grant such jurisdiction when the claim becomes adversarial and, as
here, seeks reimbursement. Such was the case in Lee v. Porter’ and Priestlv v.
Priestly.* In each of those cases, the district court was held to have supervisory
jurisdiction with respect to the estates involved, but when the claim became adversarial,
circuit court jurisdiction was recognized. Priestly quoted with approval from Lee v.
Porter as follows:
Even though KRS 387.210 confers exclusive jurisdiction
upon the district court to appoint, remove and require
accounting of committees and provides further for appeal to
the circuit court from such acts or failure to act there
appears to be no power to entertain actions involving such a
fiduciary where mismanagement, fraud or deception is
involved. Neither does there appear any authority to
surcharge accounts or assess damages. Since the case at
bar seeks the relief last mentioned based upon
mismanagement of the estate by the committee, then the
appellant had no alternative but to commence this action in
the circuit court since the district court was without statutory
power to render the judgment sought.3
I am unable to harmonize the majority holding in the instant case with our
decisions in Priestlv v. Priestlv and Lee v. Porter. Accordingly, I dissent.
‘Ky.App., 598 S.W.2d 465 (1980).
*KY., 949 S.W.2d 594 (1997).
3Ky., 949 S.W.2d at 597.
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