FROM MAGOFFIN CIRCUIT COURT HONORABLE KIMBERLY CHILDERS,
JUDGE ACTION NO. 14-CI-00384
FOR APPELLANT Eldred E. Adams, Jr.
FOR APPELLEE, SCOTTIE MCCARTY Eldred E. Adams, Jr.
FOR APPELLEE, COMMERCIAL BANK: Truman L. Dehner
BEFORE: ACREE, LAMBERT, AND SPALDING, JUDGES.
Risner has appealed from the February 23, 2018, judgment of
the Magoffin Circuit Court dismissing his claim against
Scottie McCarty related to the ownership of a farm. Finding
no error, we affirm.
subject of the present dispute is an approximately 1000-acre
farm in Magoffin County that was conveyed to Risner by his
parents in 1970. In 1991, Risner began a large marijuana
cultivation and distribution enterprise on the property.
Concerned that the farm would be subject to forfeiture due to
his illegal activities, Risner conveyed the property to H. B.
Arnett, who in turn conveyed the property to another
individual. In 1996, Risner was indicted and later convicted
on drug-related charges, and upon his release from prison, he
had the property conveyed back to him by Arnett in March 2011
through a series of conveyances for a purchase price of $50,
000.00. By deed dated a few days later, Risner conveyed the
same property to McCarty for a purchase price of $110,
000.00. It is the conveyance to McCarty that is at issue in
the present case.
December 2014, Risner filed a complaint against McCarty,
alleging that pursuant to an oral agreement in 2011, McCarty
had given him two personal loans in the amount of $95, 000.00
and $72, 000.00, for which Risner was to repay him the amount
of $1, 000.00 per month. Risner claimed that as collateral
for the loans, he executed a general warranty deed to McCarty
on March 4, 2011, rather than executing a mortgage on the
property. Risner made payments to McCarty pursuant to the
agreement and paid the property taxes. McCarty refused to
cash more recent payments, claiming that there was no loan
agreement or land contract between them. Therefore, Risner
requested a declaratory judgment establishing that a loan
repayment agreement or land contract existed relating to the
property that provided that he would get the deed to the
property back upon repayment of the full amount of the loans
pursuant to their agreement.
filed an answer disputing Risner's allegations, raising
such defenses as his failure to name all parties (including
Commercial Bank, which held mortgages on the property) as
well as the statute of frauds. In addition, McCarty filed a
counterclaim against Risner, alleging that he (McCarty) had
spent in excess of $100, 000.00 in improvements on the
subject property. In the event that the court determined that
a loan agreement or land contract existed between them,
McCarty requested a judgment against Risner in the amount
that the improvements increased the fair market value of the
property. In his response, Risner stated that the cost of the
improvements was added to the loan amount. Risner also moved
to amend his complaint to add Commercial Bank as a defendant,
which the court granted. McCarty had executed two mortgages
to Commercial Bank for a loan in 2013.
essentially claimed that after borrowing a large sum of money
from McCarty, he gave McCarty the deed to the farm with the
express understanding that the property would be re-conveyed
to Risner when the loan was paid off. He made notations on
the checks to McCarty stating "land payment" or
similar language, which McCarty endorsed and cashed. After
they had a falling out, McCarty renounced the oral agreement
and denied one had existed. On the other hand, McCarty's
version of the events was that he had purchased the subject
property, and due to their close relationship, he permitted
Risner to continue to live on the property for the rest of
his life for a monthly rental amount of $1, 000.00. Risner
was permitted to keep the coal royalties and farming profits
from the property.
trial was held in January 2018, after which the court
directed the parties to tender proposed judgments. The court
ultimately entered a judgment on February 23, 2018, in favor
of McCarty, dismissing Risner's claims and determining
that McCarty owned the subject property in fee simple
absolute. The court did not find that any loan agreement or
constructive trust existed between the parties as Risner
argued. This appeal now follows.
standard of review is set forth in Barber v.
Bradley, 505 S.W.3d 749, 754 (Ky. 2016), as follows:
As this is an appeal from a bench trial, our standard of
review is set forth in Kentucky Rule of Civil Procedure (CR)
52.01. Under CR 52.01, the trial court is required to make
specific findings of fact and state separately its
conclusions of law relied upon to render the court's
judgment. Further, those "[f]indings of fact, shall not
be set aside unless clearly erroneous, and due regard shall
be given to the opportunity of the trial court to judge the
credibility of the witnesses." CR 52.01. In fact,
"judging the credibility of witnesses and weighing
evidence are tasks within the exclusive province of ...