PRICHARD REALTY, INC. v. KIM BURSE, SECRETARY OF THE KENTUCKY REVENUE CABINET; BOYD COUNTY, KENTUCKY; D & B REAL ESTATE & MANAGEMENT, INC.; and CITY OF ASHLAND, KENTUCKY
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RENDERED:
January 9, 1998; 2:00 p.m.
NOT TO BE PUBLISHED
NO. 96-CA-00693-MR
PRICHARD REALTY, INC.
APPELLANT
APPEAL FROM BOYD CIRCUIT COURT
HONORABLE KELLEY R. ASBURY, JUDGE
ACTION NO. 94-CI-00488
v.
KIM BURSE, SECRETARY OF
THE KENTUCKY REVENUE CABINET;
BOYD COUNTY, KENTUCKY;
D & B REAL ESTATE & MANAGEMENT, INC.;
and CITY OF ASHLAND, KENTUCKY
APPELLEES
OPINION
REVERSING AND REMANDING
*
BEFORE:
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*
*
*
GUDGEL, CHIEF JUDGE; EMBERTON and JOHNSON, Judges.
JOHNSON, JUDGE:
Prichard Realty, Inc. (Prichard) appeals from an
order of the Boyd Circuit Court entered on February 12, 1996, which
set aside a January 19, 1996 foreclosure sale where Prichard had
purchased the property at issue in this case.
The trial court set
aside the sale after D & B Real Estate and Management, Inc. (D&B)
tendered checks for payment of the debts and asserted its right of
redemption as to the property.
Prichard argues that an amendment
to Kentucky Revised Statutes (KRS) 134.490, effective July 15,
1994, which states that property sold pursuant to a judgment of
foreclosure shall be appraised and there shall be a right of
redemption1 did not apply to this sale since this action was
commenced upon the filing of the complaint on June 6, 1994.
Prichard also argues that even if the amendment did apply, D&B
"waived" any argument as to the amendment's application since it
did not appeal from the December 11, 1995 order of sale which
stated that the property shall not be appraised and there shall be
no right of redemption.
We conclude that the issue concerning
right of redemption was determined by the December 11, 1995 order
of sale and D&B's failure to appeal from that order caused that
order to become the law of the case.
Thus, the trial court was
without grounds to set aside the foreclosure sale.
We reverse the
trial court and remand for further proceedings consistent with this
Opinion.
On June 6, 1994, the Kentucky Revenue Cabinet (Cabinet)
commenced an action against D&B to recover unpaid taxes on real
estate owned by D&B.
valorem
taxes
and
The Cabinet demanded $629.60 for 1992 ad
$1,306.38
interest, penalty, and costs.
for
1993
ad
valorem
taxes,
plus
The City of Ashland filed a cross-
claim for $3,289.67 in past due ad valorem taxes, plus interest and
costs.
D&B did not file any responsive pleadings and on October
24, 1995, the Cabinet moved for a default judgment and order of
sale.
On December 11, 1995, the trial court entered a default
1
The 1994 amendment to KRS 134.490 is actually a complete
change from the prior section (3).
Section (3) now states, in
pertinent part: "If property is sold pursuant to a judgment of
foreclosure, it shall be appraised pursuant to the provisions of
KRS 426.520 and there shall be a right of redemption as provided in
KRS 426.530."
The old Section (3) stated that there was no
appraisal required and no right of redemption.
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judgment and order of sale of the real estate.
trial court stated:
In the order, the
"Pursuant to KRS 134.490, this property shall
not be appraised as in other foreclosure proceedings, and there
shall be no right of redemption except as provided in KRS 134.510."
The trial court further stated that the order was "final and
appealable";
however, D&B did not appeal that order.
The Boyd
County Master Commissioner advertised the property and sold it to
Prichard on January 19, 1996, for $46,000.
Prichard paid the full
price. The Master Commissioner filed his report of sale on January
26, 1996, but did not convey a deed to Prichard.
On January 30, 1996, D&B filed a motion to set aside the
sale of the real estate, stating that it was tendering checks to
"redeem the aforesaid real property pursuant to KRS 134.490(3).
. . ."
D&B made no reference to Kentucky Rules of Civil Procedure
(CR) 55.02 or CR 60.02, and there were no attached affidavits.
Prichard objected to the motion on the grounds that D&B should have
appealed from the December 11, 1995 default judgment and order of
sale which had ruled that the property was to be sold without
appraisal and without the right of redemption.
Prichard further
argued that since the action was filed prior to the effective date
of the KRS 134.490(3) amendment, the amendment did not apply.
On February 12, 1996, the trial court entered an order
setting aside the sale of the property to Prichard "due to the fact
that the owners of the property herein, defendant, D&B Real Estate
& Management, Inc.
. . . have tendered checks in favor of the Boyd
Circuit Clerk and the Ashland City Cashier to redeem said prop-
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erty."
The trial court ordered that the $46,000 be reimbursed to
Prichard.
This appeal followed.
The initial issue that we must address is whether the
trial court had proper grounds to set aside the December 11, 1995
order of sale.
It is well settled "that an order directing
property to be sold in satisfaction of a judgment [is], in fact, a
final judgment and that the only purpose of retaining the case on
the docket [is] to enforce the judgment." Cerwin v. Taub, Ky.App.,
552 S.W.2d 675, 678 (1977).
This Court in Cerwin elaborated on
this point as follows:
"That judgment not only 'definitely settled
the issues between the parties, * * [*] but
also specifically ordered the property sold in
satisfaction of the *
*
*
judgment.'
Johnson v. Beattie et al., 265 Ky. 264, 96
S.W.2d 762. It was a final judgment since it
determined the rights and authorized enforcement.
McCormack v. Moore, 273 Ky. 724, 117
S.W.2d 952.
There was nothing more for the
Court to adjudicate, therefore, the judgment
put an end to the controversy between the
parties. Adkins v. Carol Mining Company, 281
Ky. 328, 136 S.W.2d 32.
The order to the
Sheriff to sell the property was a direction
to perform an administrative act. The necessity to enter his report did not prevent the
judgment from being final and appealable."
Id., quoting Elam v. Acme Well Drilling Co., Ky., 411 S.W.2d 468
(1967).
Thus, the December 11, 1995 order of sale was a final
judgment, and when it was not appealed from, it became the law of
the case.
The only conceivable grounds upon which the trial court
could set aside this final order would be pursuant to CR 60.02 or
CR 55.02, which applies the same criteria as CR 60.02.
However, it
is impossible for D&B to rely upon the criteria set forth in CR
60.02 since it did not allege such grounds for relief in its motion
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to set aside, nor did the trial court articulate any such grounds
in its order setting aside the sale.
Rather, D&B relied upon and
the trial court accepted the argument that the right of redemption
requirement in KRS 134.490 had not been met. However, the question
of whether the trial court may have misapplied the law in regards
to the right of redemption in the order of sale was a question that
should have been addressed by an appeal of the December 11, 1995
order.
Since the trial court had no basis to set aside the order
of sale, we reverse its order and remand for further proceedings
consistent with this Opinion.
ALL CONCUR.
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BRIEFS FOR APPELLANT:
BRIEF FOR APPELLEE, D&B:
Hon. Roger W. Hall
Ashland, KY
Hon. Charles R. Holbrook, III
Ashland, KY
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