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RLB Properties, Ltd. v. Seiller Waterman, LLC

Court of Appeals of Kentucky

June 1, 2018

RLB PROPERTIES, LTD APPELLANT
v.
SEILLER WATERMAN, LLC; PAMELA M. GREENWELL; GORDON C. ROSE; AND PAUL J. HERSHBERG APPELLEES

          APPEAL FROM JEFFERSON CIRCUIT COURT HONORABLE AUDRA J. ECKERLE, JUDGE ACTION NO. 16-CI-002522

          BRIEFS FOR APPELLANT: Joshua D. Farley Louisville, Kentucky

          BRIEF FOR APPELLEES: James P. Grohmann Louisville, Kentucky

          BEFORE: CLAYTON, CHIEF JUDGE; SMALLWOOD AND TAYLOR, JUDGES.

          OPINION

          SMALLWOOD, JUDGE.

         RLB Properties, LTD appeals from an Opinion and Order of the Jefferson Circuit Court which dismissed RLB's claims against Seiller Waterman, LLC, and Pamela Greenwell, Gordon Rose, and Paul Hershberg, lawyers employed by Seiller Waterman, LLC. We find that the trial court erred in dismissing the claims surrounding the filing of a mechanic's lien and civil conspiracy, but affirm all other aspects of the trial court's judgment.

         The Jefferson Circuit Court's recitation of facts set forth in the order dismissing is thorough and will be adopted by this Court.

This case has its genesis in prior litigation between Plaintiff, RLB Properties, LTD., (hereinafter, "RLB"), owner of the Marmaduke Building on the 4th Street Live strip of Louisville, Jefferson County, Kentucky, and Skyshield Roof & Restoration, L.L.C. (hereinafter, "Skyshield"), a company in the business of roofing and restoration. In January 2014, RLB and its tenant, Sol Azteca's Mexican Restaurant (hereinafter, "Sol Azteca's") contracted with Skyshield for the performance of repairs on Sol Azteca's restaurant premises. Disputes between the parties soon emerged, and Sol Azteca's sued Skyshield for failure to perform the agreed upon repairs.
Skyshield and its principal, Jacob Blanton[1], then retained Seiller Waterman to represent it[sic] in the litigation. On or about August 5, 2014, Skyshield filed a mechanic's lien on the Marmaduke Building, alleging it was owed $1, 500, 000.00 for labor rendered and materials furnished under its contract with RLB and Sol Azteca's. On or about August 12, 2014, Skyshield filed a Third-Party Complaint against RLB, alleging failure to pay for labor and materials furnished. RLB promptly counterclaimed against Skyshield for breach of contract. On January 29, 2015, RLB, through counsel, sent Seiller Waterman a letter demanding Skyshield release its mechanic's lien, which it alleged was satisfied and facially invalid. Neither Skyshield nor Seiller Waterman responded to this letter.
During this time, Seiller Waterman employed Greenwell, Hershberg, and Rose as attorneys. Greenwell and Hershberg filed the claim on Skyshield's behalf. Greenwell also filed Skyshield's Certificate of Authority with the Kentucky Secretary of State and listed herself as its service of process agent. Rose served as the scrivener for the mechanic's lien lodged against the Marmaduke Building.
On March 16, 2015, Jefferson Circuit Court, Division Four, the Hon. Charles Cunningham presiding, granted Defendants' motion to withdraw as counsel for Skyshield, based upon the cited irreconcilable differences and allowed Skyshield 30 days to obtain new counsel. Skyshield never obtained substitute counsel. On May 29, 2015, the Court entered RLB's tendered order dissolving the mechanic's lien. On July 31, 2015, the Court entered default judgment against Skyshield and awarded RLB $924, 767.39 in compensatory damages, $2, 000, 000.00 in punitive damages, $68, 257.29 in attorney fees, and $63, 400.00 in statutory penalties for failure to release a mechanic's lien in a timely manner.
On May 31, 2016, RLB filed suit against Defendants for negligence, negligent supervision, wrongful use of civil proceedings (hereinafter, "WUCP"), abuse of process, slander of title, filing an illegal lien, and civil conspiracy. The basis, essentially, for all RLB's claims was its assertion that Defendants knew or should have known that Skyshield was not owed any payment from RLB, and that the mechanic's lien and counterclaim they prepared were "completely devoid" of any factual basis or legal support. On June 27, 2016, Defendants moved to dismiss. Defendants argued the claims for negligence and WUCP failed to state a claim upon which relief could be granted. Regarding RLB's other claims, Defendants argued they were barred by the applicable statute of limitations.

         Appellees moved for a judgment on the pleadings and to dismiss the cause of action pursuant to Kentucky Rule of Civil Procedure (CR) 12.03.

[A] judgment on the pleadings can be granted only if, on the admitted material facts, the movant is clearly entitled to a judgment. Relief must be denied if there is a material issue of fact . . . When a party moves for judgment on the pleadings, he admits for the purposes of his motion not only the truth of all of his adversary's well-pleaded allegations of fact and fair inferences therefrom, but also the untruth of all of his own allegations which have been denied by his adversary. The question thus presented is one of law and requires an examination of the pleadings.

Archer v. Citizens Fidelity Bank & Trust Co., 365 S.W.2d 727, 729 (Ky. 1962) (citations omitted). The trial court agreed with Appellees' arguments and granted the motion to dismiss. This appeal followed.

The purpose of [CR 12.03] is to expedite the termination of a controversy where the ultimate and controlling facts are not in dispute. It is designed to provide a method of disposing of cases where the allegations of the pleadings are admitted and only a question of law is to be decided. . . . The basis of the motion is to test ...

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