CHARLES H. MOORE, L. F. MOORE and LEOTA PROPERTIES, INC. V. BANK ONE LEXINGTON, NA; BANK ONE COLUMBUS, NA; WILLIAM R. GUTHRIE and VINCE NOONEY
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RENDERED:
November 14, 1997; 2:00 p.m.
NOT TO BE PUBLISHED
NO. 96-CA-1839-MR
CHARLES H. MOORE, L. F.
MOORE and LEOTA PROPERTIES, INC.
APPELLANTS
APPEAL FROM FAYETTE CIRCUIT COURT
HONORABLE JOHN R. ADAMS, JUDGE
ACTION NO. 92-CI-3609
V.
BANK ONE LEXINGTON, NA;
BANK ONE COLUMBUS, NA;
WILLIAM R. GUTHRIE and
VINCE NOONEY
APPELLEES
OPINION
AFFIRMING
* * * * * * * *
BEFORE:
GARDNER,
GARDNER, JOHNSON and WILHOIT, Judges.
JUDGE:
Charles
H.
Moore,
L.
F.
Moore,
and
Leota
Properties, Inc. (collectively referred to as Moore) appeal from
two opinions and orders of the Fayette Circuit Court which rendered
a summary judgment against Moore on his claim, and a summary
judgment in favor of Bank One Lexington, NA and Bank One Columbus,
NA (hereinafter referred to as Bank One) on its counterclaim.
We
affirm the opinions and orders now on appeal.
The instant action was previously addressed on appeal by
opinion of this Court rendered April 21, 1995.
We summarized the
undisputed
factual
background
which
preceded
this
follows:
Moore started his real estate development
business in 1953. At that time, he began
to do his banking for the business with
Citizens
Union
Bank
of
Lexington,
Kentucky, which was the predecessor to
appellee, Bank One, Lexington N.A. Moore
established
a
lasting
business
relationship with Citizens, which spanned
several decades. Over the course of his
dealings with Citizens, Moore borrowed
and repaid substantial amounts of money.
In 1986, Bank One acquired and merged
with Citizens.
Moore had formed and was the president of
Leota.
In 1985, Leota arranged to
purchase a multi-million dollar building
in
Atlanta,
Georgia
known
as
The
Exchange. At the time, the note on The
Exchange was held by Citizens. In 1990,
Leota began to encounter difficultly in
keeping up the payments.
Moore argued
that Bank One officials demanded that he
fully collateralize his $1 million open
line of credit, previously unsecured with
Citizens, to avoid foreclosure on the
building.
Moore claimed that Bank One
officials represented that his failure to
do so would result in the potential
dishonor
of
some
of
their
prior
obligations.
Moore
provided
the
collateral on the loans and participated
in the execution of the appropriate
restructured loan documents.
Moore
maintained that he did so without the
benefit of advice of counsel in reliance
on statements to him by Bank One
officials.
Part of the loan documents which were
restructured included promissory notes
executed by Moore, as President of Leota,
with both Bank One and Citizens.
In
October,
1985,
Leota
executed
a
promissory note with Citizens in the
amount of $1,400,000, with interest and
principal payments set out in the
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action
as
agreement. The original maturity date of
the note was April 17, 1993.
The next note was executed between Leota
and Bank One on October 17, 1989, in the
amount of $400,000 with a maturity date
of October 17, 1990.
This note,
originally dated October 17, 1985, was an
extension of a promissory note in the
amount of $500,000.
Around July 17, 1991, after Moore and
Leota had defaulted on these notes, Bank
One entered into a Loan Extension and
Modification Agreement.
That agreement
made various changes in the original
notes and also provided for the drafting
of a new demand note in the amount of
$197,185.38, which represented the amount
of interest due on the prior notes. All
of these documents were drafted pursuant
to the Loan Extension and Modification
Agreement.
Moore filed a lender liability suit on
October 20, 1992. After oral arguments
on Bank One and William R. Guthrie's1
motion to dismiss, the trial court
granted the motion and entered an order
permitting Moore to file an amended
complaint reflecting the two remaining
counts
sounding
in
fraud
and
misrepresentation.
Moore and Leota's
amended complaint sought damages as well
as
a
determination
that
the
"restructured" loan documents be declared
unenforceable. Bank One filed its answer
and also asserted a counterclaim on three
notes owed by Moore and Leota, one of
which represented the unpaid interest on
the prior notes.
Bank One filed a motion for partial
summary judgment on the note reflecting
the unpaid interest which, at that time,
had a balance of $133,963.15. Bank One
maintained it was entitled to summary
judgment because this note was severable
from the remainder of the lawsuit. After
1
Mr. Guthrie is not a party to this appeal.
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oral arguments, the trial court sustained
the partial summary judgment motion and
entered an interlocutory order.
The
trial judge did permit Bank One to seek a
certification of finality. Bank One did
so and the trial court entered its order
of finality on November 5, 1993.
Moore appealed the partial summary judgment to this
Court.
We rendered an opinion on April 21, 1995, wherein we
vacated and remanded the judgment.
this
Court
concluded
that
the
As a basis for the opinion,
subject
matter
of
Bank
One's
counterclaim was so intricately entwined with Moore's claim that
summary judgment on Bank One's counterclaim was precluded.
The
summary judgment was reversed and the matter was remanded to the
Fayette Circuit Court.
The matter proceeded in the lower court through late 1995
on
both
Moore's
claim
of
lender
counterclaim on the promissory notes.
liability
and
Bank
One's
Bank One then filed motions
seeking summary judgment on both the claim and counterclaim.
At
the hearing conducted on January 5, 1996, the parties and the lower
court agreed to pass the ruling on the promissory notes until the
court had ruled on Moore's claim of lender liability.
On the issue of lender liability, the court concluded,
that, "[n]one of the facts alleged in the argument of counsel for
the Plaintiff, nor the briefs that were filed contesting the issue
of
Summary
requirement
Judgment,
of
a
are
fraud
[sic]
claim
sufficient
necessary
Defendant's motion for Summary Judgment."
to
to
get
support
the
beyond
the
It went on to conclude
as a matter of law that Moore could not prevail on his claim of
-4-
fraud, and accordingly it granted Bank One's motion for summary
judgment on Moore's claim.
The opinion on this issue was rendered
on February 7, 1996.
On March 25, 1996, the court addressed the motion for
summary judgment on Bank One's counterclaim.
was
no
longer
pending,
the
issues
Since Moore's claim
relating
to
Bank
One's
counterclaim were no longer intricately entwined with Moore's
claim.
Accordingly, the lower court again concluded that there
were no genuine issues of material fact on the counterclaim, and
entered
a
summary
counterclaim.2
judgment
now
error
on
in
favor
of
Bank
One
on
its
This appeal followed.
Moore
reversible
judgment
both
in
argues
granting
Moore's
that
the
Bank
claim
lower
One's
and
Bank
court
motions
One's
committed
for
summary
counterclaim.
Specifically, Moore alleges that this Court's prior opinion became
the law of the case and prohibited relitigation of the issues
addressed in that appeal, and that there remain genuine issues of
material fact supporting his claim.
Having studied the record and
the law, as well as the written and oral arguments of counsel, we
cannot conclude that the lower court erred on the issues which
Moore now raises.
We will first address the opinion and order entered
February 7, 1996, which granted summary judgment in favor of Bank
One on Moore's claim of lender liability/fraud.
2
The lower court
The 1993 order granted summary judgment on only one of the
three promissory notes. The 1996 order granted summary judgment as
to all three promissory notes.
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concluded in relevant part that Moore's claim, even if true as
alleged, could not be construed to constitute fraud. Moore alleged
in part that he was defrauded because of the insertion of a "crosscollateralization provision" in the July 1991 note.
The court
concluded that this allegation could not be construed as fraud
because it was undisputed that the same provision had been signed
by Moore, included in other notes, and merged into the July 1991
note.
Moore also claimed that he did not read the document and did
not ask for or receive a copy of the document.
Furthermore, the
court found that all of the testimony on this issue supported Bank
One's assertion that the document had not been altered.
Kentucky Rule of Civil Procedure (CR) 56.03 authorizes
summary
judgment
"if
the
pleadings,
depositions,
answers
to
interrogatories, stipulations, and admissions on file, together
with the affidavits, if any, show that there is no genuine issues
as to any material fact and that the moving party is entitled to a
judgment as a matter of law."
The proper function of summary
judgment is to terminate litigation when, as a matter of law, it
appears that it would be impossible for the respondent to produce
evidence at trial warranting a judgment in his favor.
Steelvest,
Inc. v. Scansteel Service Center, Inc., Ky., 807 S.W.2d 476 (1991),
citing Paintsville Hospital Co. v. Rose, Ky., 683 S.W.2d 255
(1985).
While this rule should be cautiously applied, Steelvest,
807 S.W.2d at 480, its purpose is to promote the expeditious
disposition of cases and to avoid unnecessary trials.
Elm Hill Meats, Inc., Ky., 420 S.W.2d 396 (1967).
-6-
Preston v.
While we are acutely aware that Steelvest sets forth an
extremely strict standard for the application of summary judgment,
we are sufficiently convinced that Moore could not prevail if the
action proceeded to trial.
Under these circumstances, summary
judgment clearly is appropriate.
Moore maintains that genuine
issues of material fact exist which support his claim.
He does
not, however, state what these issues are, and merely alleges that
the lower court conducted only a "cursory review" of his claims.
The primary focus of his argument in favor of reversal is his
contention that this Court's 1995 opinion became the law of the
case and should serve to bar summary judgment on both his claim and
Bank One's counterclaim.
This argument is not persuasive.
This Court's 1995 opinion reversed the lower court's
summary judgment in favor of Bank One on its counterclaim because
the issues presented in the counterclaim (i.e., the promissory
notes) were intricately entwined with Moore's claim of fraud.
Contrary to Moore's assertion, that opinion did not address the
question of whether summary judgment was appropriate as to Moore's
claim of fraud.
No summary judgment had been entered as to Moore's
claim, and accordingly the holding expressed in this Court's 1995
opinion could not be regarded as the law of the case as to Moore's
claim. Stated differently, the 1995 opinion held only that summary
judgment on Bank One's counterclaim was premature as long as
Moore's claim remained pending.
It in no way addressed the
propriety of summary judgment against Moore on his claim because
that issue had not yet risen.
Thus, Moore's argument that this
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Court's 1995 opinion should be construed to bar summary judgment
against Moore on his claim of fraud is without merit.
Moore's remaining argument is that the lower court erred
in
granting
counterclaim.
summary
judgment
in
favor
of
Bank
One
on
its
Moore again argues that this Court's 1995 opinion
became the law of the case and should serve to bar summary judgment
on the counterclaim.
We find no error.
Once again, this Court's 1995 opinion merely held that
summary judgment on the counterclaim was barred so long as Moore's
claim
of
fraud
remained
pending.
When
summary
judgment
was
rendered in favor of Bank One on its counterclaim on March 25,
1996, Moore's claim had previously been disposed of via summary
judgment.
Thus, when the lower court addressed the motion for
summary judgment on Bank One's claim, the motion could be addressed
anew and without reference to this Court's 1995 opinion.
In
examining the motion, the lower court again found that no genuine
issue of material fact existed and that Moore could not prevail on
the issue of the matter proceeded to trial.
The lower court's
analysis comports with Steelvest, supra, and as such, we find no
error.
For the foregoing reasons, the orders of summary judgment
of the Fayette Circuit Court are affirmed.
ALL CONCUR.
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BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
John H. Dwyer, Jr.
Louisville, Kentucky
Charles E. Shivel, Jr.
Lexington, Kentucky
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