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Abbott v. Chesley
Supreme Court of Kentucky
August 29, 2013
Mildred ABBOTT, Barbara Abel, Elizabeth Abney, Lisa Abraham, Pamela Abrams, Elizabeth Adams, Cathy Adams, Phyllis Adams, Ruby Adams, Ruby Adamson, Susan Adkins, Clantha Akers, Effie Alsip, Juanita Alton, Joann Alvey, Phyllis Applegate, Cindy Armstrong, Susan Arvin, Clara Atkinson, Karen Austin, Linda Back, Jamie Bailey, Mary Ann Bailey, Vickie Bailey, Charlotte Baker, Charlotte Baker, on behalf of the Estate of Lane Walker, David Walker, on behalf of the Estate of Lane Walker, Jody Baldridge, Carla Baldwin, Sarah Balenovich, on behalf of the Estate of Edith Browning, Carol Barnes, on behalf of the Estate of Danny Abney, Marilyn Barnes, Lee Bartley Jr, Teresa Baumgardner, Debra Bays-Plybon, Melissa Faye Beamon, Linda Beggs, Patricia Belcher, Leisa Belding, Eleanor Berry, Margie Berry, Margaret Bingham, Easter Bishop, Emma Black, Janice Blair, Sharon Blair, Carol Boggs, Lori Boone, Joie Botkins, Kathy Bowling, Angie Lynn Bowman, Virginia Braden, Ladonna Brame, James Branham, Kathy Branham, Ruby Branham, Brenda Bray, Norma Brewer, Vickie Brewer, Alma Brock, Glenna Brock-Powell, Peggy Broughton, Barbara Brown, Joyce Brown, Karen Brown, Sharon Brown, Deborah Browning, Nathaniel Brumfield, on behalf of Wathalee Brumfield, Billie Brumley, Linda Brumley, Kimberly Brummett, Teresa Bruner, Patricia Bryant, Christina Bucher, Leslie Bullock, Judy Bundy, Warren Burgess, Janice Burton, Tina Bush, Sherrie Butler, Donna Campbell, Loretta Campbell, Buel Cantrell, Linda Carr, Tonya Carter, Wallace Carter, Charlotte Cason, Lisa Caudill, Connie Sue Centers, Tony Childers, Gloria Clark, William Clark, Rosemary Click, Pamela Clift, Danielle Clore, Allen Coker, Judy Coleman, Shirley Coleman, Tara Coleman, Debra Collier, Margaret Collier, Opal Collins, Linda Colvin, Phyllis Combs, Carolyn Conley, James Cook, Ronnie Cook, Janet Coons-Greene, Georgia Coots, Mark Cornn, Sandra Cotton Gilley, Nadine Couch, Joseph Cowley, Jo Ann Cox, Barbara Crain, Doris Creech, Deloris Criswell, Pamela Crowe, Tracy Curtis, Doris Dabney, Darby Daniels, Kathy Daniels-Stephenson, Mary Daughtery, Betty Davidson, on behalf of the Estate of Evelyn Jackson, Ginger Davidson-Gibson, Elizabeth Davis, Sandra Davis, Karen Dean, Bobbie Deaton, Jan Delaney, Regina Despain, Judy Dile, Gerry Dixon, Al Doser, Belva Dotson, Teresa Duff, Linda Dunaway, Ynetta Eckert, Tami Edwards-Engle, Martha Elliot, Saundra Erp, Charlotte Estepp, Sarah Estes, Susan Ezell, Elizabeth Fannin, Janet Fentress, Haywood Ferguson, on behalf of the Estate of Alma Ferguson, William Fitch, on behalf of the Estate of Shelia Fitch, Vickie Flannery, Paul Floyd, Bernita Flynn, Rhonda Flynn Osburn, Berenda Ford, Rhonda Franklin, Timothy Franklin, Mary Frazier, Essie Fredrick, Freda Frizzell, Beulah Fugate, Clara Fulks, Patricia Gaunce, Barbara Gay, Melissa Gayheart, Ken Gayheart, James Gibson, on behalf of the Estate of Jessie Gibson, Joni Gibson, Tara Gifford, Gladys Gilbert, Stephanie Gist, Ruby Godbey, Eddie Golden, Debra Goode, Joyce Gordon, Patrick Graham, Tammy Grant, Amy Gray, Donna Green, Sherrie Green, Peggy Grigsby, Allie Hall, Geraldine Hall, Norma Hall, Shannon Hall, Barbara Hampton, Rhonda Hancock, Leona Gail Handley, Joyce Hanley, Rebecca Harris, Debra Harrison, Diane Harrison, Joyce Hassler, Yolanda Hayden, Barbara Heizer, Barbara Hellmueller, Reva Helton, Wanda Helton, Bonnie Henderson, Gary Hendrickson, Vikki Henley, Vickie Henry, Marcus Highley, Charlene Hill, Karen Hillard, Janice Hilton, Linda Hinkle, Jacqueline Hocker, Gwen Holt, Tami Holt, Myra Hood, Vickie Hood, Lora Hoover, Evelyn Hopkins, Charlene Horn, Mary Horning, Cloyd Hoskins, Linda Hoskins, Marilyn Howard, Mary Howard, Toloria Howard, Donna Howser, Charlotte Hughes, Marcia Hughes, Margie Hulse, Sheila Humpreys, Margaret Hunt, Wanda Hunter, Brenda Hutchcraft, Lorene Hutcherson, Katherine Hutchinson, James Ingram, Emma Ison, Della Jackson, Katina Jackson, Mary Jackson, Linda James, Lynn Jefcoat, Debbie Jeffrey, Garnett Johnson, Ernestine Leslie Johnstone, Beulah Jones, Franklin Jones, Gerry Jones, Judy Jones, Kathy Jones, Linda Jones, Marlene Jones, on behalf of the Estate of Loretta Edmond, Stewart Jones, Troy Jones, Betty Jordon, Betty Kelley, April Keltner Nuxoll, Gerald King, Katherine King, Pattie Kitts, Betty Kluck, Lucille Krey, Bill Lady, on behalf of the Estate of Mary Lady, Linda Larkins, Angela Lewis-Mullinnix, Emily Lewis, Beverly Little, Sandra Dee Littleton, Lois Lockard, on behalf of the Estate of Lloyd Lockard, Linda Long, Sherry Long, Kathy Lovan-Day, Nona Lucas, Charlotte Lush, Linda Malone McGowan, Paula Mann, Pamela Marlowe, Arlene Marshall, Bobbie Martin, Linda Martin, Mary Martin, Connie Mason, Joni McClanahan, Lavonna McDaniel, Connie McGirr, Roberta McGuire, Tammy McGuire, Jacquelyn McMurtry, June McPhearson, Sheila Lynn Meece, Thelma Merida, Andrea Messamore, Wanda Metzger, Deloris Miller, Linda Miller, Linda L. Miller, Marie Miller, Nellie Miller, Orene Salyer Miller, Belinda Million, Leslie Minton, William Miracle, on behalf of the Estate of Kathy Miracle, Beverly Mitchell, Eudora Montgomery, Ella Moore, on behalf of the Estate of Jonnetta Moore, Margaret Moore, Rhonda Moore, April Morris, Louisa Moss, Donna Muddiman-Cornish, Aileen Mullins, Mary Napier, Wanda Faye Neace, Elizabeth Neal, Linda Nevels, Diana Newlin, Wilma Noe, Kathy Nolan, Shelia Nolan, Glenora Pace, Bertha Pack, Raymond Parker, Louverna Parks, Myrtle Parris, Jessie Parsons, Angela Peace, Judith Peck Wageman, Lisa Peek, Recie Pennington, Helen Perkins, Jeff Perkins, Joe Ann Perkins Spencer, Stacy Perkins, Joy Perry of the Estate of Milton Lewis, Doris Phelps, Norma Pickett, Sonja Pickett, Kathy Pollitte, Brian Powell, Mary P'Pool, Trena Preston, Suzanne Price, Rita Profitt-Norman, Lynne Pursel, Sharon Rainwater, Billie Reese, Brenda Rentas, on behalf of Anthony Rentas, Arlie Rhodes, Evelyn Rhodes, Raymond Riley, Levetta Riviera, Odena Roaden, Billie June Roberts, Dyan Roberts, Patricia Roberts', Renee Roberts, Patricia Robinson, Fetina Robinson, Carol Rogers, Cathy Rose, Vina Rose, Lary Roseberry Jr, on behalf of the Estate of Larry Roseberry, Sr., Bobby Sallee, Mary Sams, Kathy Sands, Justus Scharold, Crystal Seals-Gibson, Maxine Seals, Claudia Sebastian-Shepard, Lisa Sexton, Monica Sexton, Terry Shanks, Margaret Sharon, Michelle Sharpe Roberts, Debra Shepherd, Janet Short, Linda Caudill, on behalf of the Estate of Laureda Short, Monica Shuffett, Loretta Sidwell, Ada Sizemore, April Slniten-Jones, Carole Slone, Barbara Smith, Elaine Smith, Freda Smith, Wesley Smith, on behalf of the Estate of Sharon Smith, Peggy Spears, Corina Stearns, Cora Stapleton, Debbie Staton, Paul Stauffer, Connie Stephens, Nancy Stephens, Sharon Stevenson, Marlene Stewart, Betty Stone, Donna Stromowsky, Connie Sturgill, Shirley Sudduth, on behalf of the Estate of Marjorie Sudduth, Pam Sullivan, on behalf of the Estate of Rebecca Lovell, Sharon Stephens, on behalf of the Estate of Rebecca Lovell, Mildred Swanson, Lisa Swiger, Ella Tackett, Patty Tackett, Priscilla Tafolla, Charles Tapley, Ella Taylor, Linda Taylor, Jeanne Thomas, Elizabeth Thompson-Washburn, Karen Thompson McClain, Nancy Thompson, James G. Thurman, Lisa Grant Thurman, Steve Toller, on behalf of the Estate of Linda Toler, Roy Toyler, Elizabeth Trent, Jenny Trimble, Joetta Tucker, Deborah Turner, Drucilla Turner, Marie Turner, Patricia Turner, Valorie Turner, Linda Vance, Linda Vanarsdall-Collins, Debbie Vogt Schneider, Bobbie Walker, Lorene Wallen, Cindy Walters, Betty Ward, on behalf of the Estate of Martin Ward, Wanda Watkins, Cheryl Watson, Irene Wells, Joyce Goff Wells, Judy Whitaker, Kim White, Mary White, Patricia White, Catherine Whitlock, Joyce Whitt, Betty Widener, Peter Wilds, Carol Quisenberry Williams, Todd Williams, on behalf of the Estate of Gloria Williams, Bethany Willinger, Geneva Wilson, Robert Wilson, Melody Winer, Connie Wolfe, Bill Wombles, Amanda Edwards Wood, Artie Woods, Fern Wooten, Deborah Wright, Edwina Wright, Roger Wright, Sandra Wright, Tammy Wright, Doyle Yancy, Sheila Yates, Karen Young, Sandra Zehman, Appellants
Stanley M. CHESLEY, Shirley A. Cunningham, Jr., William J. Gallion, and Melbourne Mills, Jr., Appellees.
Rehearing Denied Dec. 19, 2013.
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Angela Margaret Ford, for Appellants.
Frank V. Benton, IV, Newport, James M. Gary, Sheryl G. Snyder, Griffin Terry Sumner, Louisville, John Kendrick Wells, IV, for Appellee, Stanley M. Chesley.
Andre Fereole Regard, Lexington, for Appellees, Shirley A. Cunningham, Jr. and William J. Gallion.
Calvin Ray Fulkerson, James A. Shuffett, John Christian Lewis, Lexington, for Appellee, Melbourne Mills, Jr.
This case arose in the aftermath of the settlement of Darla S. Guard, et al. v. American Home Products, Inc. (Guard).  The Guard case, which is also known as " Jonetta Moore, et al. v. American Home Products, Inc., " or the " Moore " case, was brought by Kentucky residents who had taken the popular diet drug known as Fen-Phen. Each Appellant/Cross-Appellee (collectively " Appellants" ) was a plaintiff in the Guard case and was represented under a contingent fee contract by Appellees/Cross-Appellants (collectively " Appellees" )  Shirley A. Cunningham, William J. Gallion, or Melbourne Mills, Jr. Appellee Stanley M. Chesley later joined the plaintiffs' team of attorneys. Appellants' complaint alleges that Appellees breached their fiduciary duties by wrongfully retaining or by improperly disbursing a substantial portion of the Guard case settlement money that should have gone to Appellants.
The trial court granted Appellants a partial summary judgment on the claim that Cunningham, Gallion, and Mills (" CGM" )  breached their fiduciary duty. The trial court concluded that genuine issues of material fact existed in connection with Chesley's role, and so the motion for summary judgment against him was denied. The Court of Appeals reversed the partial summary judgment against CGM and remanded the case against them for further proceedings. It declined Appellants' request for review of the trial court's
denial of summary judgment against Chesley.
On discretionary review, we now address the following issues:
1) Whether the Court of Appeals erred in reversing the partial summary judgment entered against CGM;
2) Whether the Court of Appeals erred by declining to review the trial court's denial of summary judgment against Chesley;
3) Whether the trial court could impose upon CGM joint and several liability for the damages sustained by Appellants;
4) Whether the Court of Appeals erred in affirming the trial court's decision refusing to transfer the case from the Boone Circuit Court to the Fayette Circuit Court; and,
5) Whether the trial court erred in crediting the monetary judgment against CGM with undocumented expenses that Mills claimed he incurred in the Guard case.
For the reasons set forth below, we reverse the Court of Appeals' opinion upon the issue of CGM's breach of fiduciary duty and reinstate the partial summary judgment entered against CGM by the trial court. We also conclude that the imposition of joint and several liability against CGM was proper, and so we likewise reverse that aspect of the Court of Appeals' opinion. In addition, we affirm the Court of Appeals' conclusion that the denial of summary judgment against Chesley was not an appealable issue; we affirm the Court of Appeals' determination that the Boone Circuit Court properly refused to transfer the case to the Fayette Circuit Court; and we agree with Appellants that the trial court erred by crediting CGM with the undocumented expenses claimed by Mills.
I. FACTUAL AND PROCEDURAL BACKGROUND
After discovery in the mid-1990s that the popular weight-loss drug combination of fenfluramine and phentermine known as Fen-Phen was linked to heart damage and other dangerous side-effects, Fen-Phen was taken off the market. American Home Products (American Home), the manufacturer of Fen-Phen soon faced several lawsuits by Fen-Phen users. Appellees Cunningham, Gallion, and Mills were Kentucky attorneys with separate law practices. However, they pooled their talents and resources into a collective effort to represent some 431 individual plaintiffs, all of whom were Kentucky residents who had taken Fen-Phen. Each of the 431 plaintiffs had signed a contingent fee contract with Cunningham, Gallion, or Mills. Cunningham's clients had agreed to a contingent fee of " 33 1/3% of the total sum recovered, whether by settlement or by trial ..." plus reimbursement for expenses " directly incurred in investigating or litigating this claim...." Gallion's contingent fee agreement provided for " 33% of the total sum recovered, whether by settlement or by trial ..." plus expenses " incurred in investigating or litigating this claim[.]" Mills's contingent fee agreement provided that " Attorney's fees shall be set by the court, but shall not be more than 30% of the client's net recovery." Expenses were to be " repaid [to the attorney] off the top before calculation of fee."
In the early stages of the litigation, Appellees had the case certified by the Boone Circuit Court as a class action. Chesley had only a few Fen-Phen clients, but he had experience in the settlement of Fen-Phen proceedings, having served on the management committee of the national Fen-Phen class action litigation. Because of Chesley's experience and national reputation, CGM agreed to his participation in the Guard case. Chesley, Gallion, Cunningham,
Mills, and an attorney from Cincinnati named Richard Lawrence who also represented a few individual Fen-Phen claimants, entered into a written agreement outlining the role each attorney was to perform in the litigation and agreeing upon a method of sharing the fees earned in the case. Gallion would serve as lead trial counsel in the event the case was tried, and would prepare the case accordingly. Cunningham and Mills would enroll clients and maintain client contact information. Chesley would act as " lead negotiator" in the effort to secure a collective settlement of the claims.
The written agreement provided that if a negotiated settlement was achieved, Chesley would take a 21%-share of the combined attorneys' fee; CGM would split 74% of the total fee among themselves and their associates; and Richard Lawrence, who is not a party to this case, would take 5%. If a negotiated settlement was not achieved, the lawyers agreed that Chesley would get 15% of the fees generated by a verdict and CGM would share 80%, with Lawrence receiving the remaining 5%. The agreement also provided that " all parties to this agreement shall have the right to review all contracts between themselves and any other parties that may affect the fees earned and all clients shall be advised of this agreement." The agreement further provided that " all parties to this agreement shall ...