Opinion
NO. 2019-CA-000604-MR
04-10-2020
TONY CISNEY APPELLANT v. CABINET FOR HEALTH AND FAMILY SERVICES APPELLEE
BRIEFS FOR APPELLANT: Tony Cisney, pro se Louisville, Kentucky BRIEF FOR APPELLEE: Jennifer Wolsing Frankfort, Kentucky
NOT TO BE PUBLISHED APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE MITCHELL PERRY, JUDGE
ACTION NO. 16-CI-002339 OPINION
AFFIRMING
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BEFORE: COMBS AND LAMBERT, JUDGES; BUCKINGHAM, SPECIAL JUDGE. BUCKINGHAM, SPECIAL JUDGE: Tony Cisney appeals from an opinion and order of the Jefferson Circuit Court granting the motion to enforce the settlement agreement filed by the Cabinet for Health and Family Services (the Cabinet). We affirm.
Retired Judge David C. Buckingham sitting as Special Judge by assignment of the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution.
Cisney represents himself in this appeal.
Cisney was employed by the Cabinet as an inspector of certain nursing homes and out-patient clinics for the Office of the Inspector General. He claims he was "pressured to overlook deficiencies, and when he refused to do so and reported the matter to certain supervisors, he suddenly found himself without further assignments and without useful work to do." Cisney further claims he "was constructively fired and treated unjustly because he was attempting to do his job making proper reports about interference."
In May 2016, Cisney filed a civil complaint against the Cabinet in Jefferson Circuit Court alleging whistleblower retaliation and constructive discharge. A jury trial began on October 1, 2018. According to statements made by the attorneys, on the evening of the third day of the trial, Cisney's attorney, Stewart Abney, contacted the Cabinet's attorneys by phone indicating Cisney wanted to settle the case. Abney then made an offer of settlement, which was followed by a counteroffer by the Cabinet. The Cabinet told Abney it was not agreeable to paying Cisney any amount to settle the case, but if Cisney agreed to dismiss his complaint with prejudice, the Cabinet would not seek to recover its costs.
There was no evidentiary hearing concerning what transpired on the evening of the third day of the trial. The information comes from statements of the attorneys to the court the following morning and afterward, as well as from statements made in the Cabinet's brief.
About 15 minutes later, Abney contacted the Cabinet's attorney and agreed to settle the case by dismissal of Cisney's complaint with each party paying its own costs and attorneys' fees. According to the Cabinet, Abney advised the Cabinet's attorney that Cisney was not likely to come to court the following day to sign the settlement agreement, but that he (Abney) would be present and inform the court of the parties' agreement to settle.
The parties' attorneys met the following morning, and Abney reviewed the settlement agreement that had been prepared by the Cabinet's attorney. Abney made one change in the agreement, changing "Both parties will pay their own court costs and fees" by omitting the word "court." The Cabinet agreed to the change, the attorneys signed the agreement, and the trial judge was informed the parties had reached a settlement. The jury was discharged, and the witnesses were released. Cisney was not present and did not sign the agreement.
When Cisney later refused to acknowledge the agreement, the Cabinet filed a motion to enforce the settlement agreement which came before the court on November 28, 2018. At the hearing, Abney moved the court to be allowed to withdraw as Cisney's attorney, and the Cabinet's attorney presented its motion.
Cisney was present and was not represented by counsel. He stated to the court that anything to which he agreed or did not agree was a result of duress and a threat by a Cabinet representative as to the repercussions Cisney would face should he not sign the settlement agreement, and that he was not present in court when the agreement was announced to the court because Abney directed him not to appear.
The court granted Abney's motion to withdraw as counsel and continued the case. Further, the court directed Cisney to put his response to the Cabinet's motion in writing. When asked by the Cabinet's attorney whether it should file a reply brief, the court said such would not be necessary.
The matter again came before the court on the Cabinet's motion on December 17, 2018. Cisney had filed his written response as directed by the court, and the Cabinet had filed a motion for an evidentiary hearing for the court to hear testimony as to whether Abney did or did not have Cisney's authority to enter into the settlement agreement.
In support of its motion for an evidentiary hearing, the Cabinet referred the court to the case of Clark v. Burden, 917 S.W.2d 574 (Ky. 1996), and stated that Abney represented he had Cisney's authority to settle the case while Cisney claimed he didn't. The court asked the Cabinet's attorney what purpose an evidentiary hearing would serve, and when the attorney responded that the hearing would allow the court to decide the issue, the court replied that it was not sure it agreed with that. Further, the court noted the settlement agreement had been announced to him in open court by officers of the court and that he was inclined to rely on the representations made at that time. Before concluding the hearing, the judge stated he would either issue a ruling on the motion to enforce the settlement agreement or would issue an order setting an evidentiary hearing.
On March 20, 2019, the court entered an opinion and order that granted the Cabinet's motion to enforce the settlement agreement. The court specifically found that "Cisney's attorney, Stewart Abney, had actual authority to sign the Settlement Agreement, and that the failure to enforce the Agreement would adversely affect the Cabinet's rights." This appeal by Cisney followed.
In Clark v. Burden, our Supreme Court held: "With respect to compromise or settlement of a claim, final decision-making authority rests with the client." 917 S.W.2d at 575. The Court in Clark further stated
If it should be determined that third parties who may be dealing with such attorneys would be substantially and adversely affected by unauthorized attorney settlements, then the client employing the attorney should be bound. On the other hand, if it is determined that no substantial harm will befall third parties, then ultimate control should remain with the client, notwithstanding purported settlements by an attorney.Id. at 576.
At some point, however, the client must be charged with responsibility for having employed an attorney who failed to observe the requirements of fidelity to the client's wishes. That point, we believe, is when the rights of innocent third parties are adversely affected.Id. at 577. Additionally, the Court in Clark held that "in the event of a dispute as to whether the client has given settlement authority, the trial court shall summarily decide the facts." Id.
Cisney asks this Court to remand the case to the trial court for it to conduct an evidentiary hearing and make specific findings concerning the settlement agreement. First, we note Cisney has not shown he preserved error in the lower court by requesting the court to conduct an evidentiary hearing. CR 76.12(4)(c)(v) requires each argument in an appellant's brief to begin with a statement of preservation referencing "the record showing whether the issue was properly preserved for review and, if so, in what manner." Further, "a party may not raise an issue for the first time on appeal." Taylor v. Kentucky Unemployment Ins. Comm'n, 382 S.W.3d 826, 835 (Ky. 2012).
Kentucky Rules of Civil Procedure.
While Cisney contends the "court should have given Appellant the opportunity to examine the attorneys on the matter of settlement and required the agreement of the appellant before accepting said agreement," he has not directed this Court to any place in the record where he asked the court to conduct an evidentiary hearing in lieu of the hearings it conducted. Therefore, we assume such a hearing was not requested.
The Cabinet had requested such a hearing, however, as it recognized that evidence and fact findings concerning the circumstances surrounding the settlement agreement were necessary before the issue of Abney's authority to settle the case in the manner he did could be resolved. We agree with the position the Cabinet took at the trial level that an evidentiary hearing was necessary to determine Abney's authority to enter into the agreement. Although the Court in Clark stated the trial court shall decide the facts "summarily" in determining whether an attorney had the client's authority to enter into a settlement agreement, the trial court in this case could not decide the facts without resolving the differences in the claims of Abney and Cisney. In order to do so, the court should have held an evidentiary hearing and heard the testimony of both Abney and Cisney.
Based on statements made by the trial judge at the December 17 court proceedings, it appears the court had no intention of considering the issue of whether Cisney had given Abney the authority to settle the case in the manner it was settled, as Abney and the Cabinet contend, or whether Abney had no such authority, as Cisney contends. The court seemed persuaded that because Abney represented to the court that an agreement had been reached and the jury could be discharged, then such was all that was necessary to enforce the agreement. As noted by the court at the conclusion of the December 17 hearing, it was inclined to rely on what it had been told by officers of the court. We decline to affirm the court's order based on whether Abney had Cisney's authority to settle the case. In light of the conflicting statements by the attorney, Abney, and the client, Cisney, such a determination could not have been properly made without an evidentiary hearing.
Were this appeal to be resolved on the issue of Abney's authority or the lack thereof, we would vacate and remand for an evidentiary hearing on that issue. However, "[e]ven if the trial court finds that no such authority was given, if it should also find that appellees were substantially and adversely affected by their reliance upon the purported settlement, enforcement would be appropriate." Clark, 917 S.W.2d at 577.
Therefore, we must address the second issue, which is whether the trial court's finding that the failure to enforce the agreement would adversely affect the Cabinet's rights was proper. If so, then we should affirm; however, if the court's finding of fact on this issue is clearly erroneous, then the case will be reinstated and the matter likely retried. See id.
CR 52.01 provides in part: "Findings of fact, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial judge to judge the credibility of the witnesses." "If supported by substantial evidence, the court's finding of fact is not clearly erroneous." Black Motor Co. v. Greene, 385 S.W.2d 954, 956 (Ky. 1964). "The test of substantiality of evidence is whether when taken alone or in the light of all the evidence it has sufficient probative value to induce conviction in the minds of reasonable [persons]." Kentucky State Racing Comm'n v. Fuller, 481 S.W.2d 298, 308 (Ky. 1972).
The Cabinet argues it would be prejudiced and its rights adversely affected for three reasons if the settlement agreement is not enforced. The Cabinet first asserts it would lose its element of surprise regarding Cisney's answers to questions by the Cabinet's attorney at trial, which answers, it alleges, were inconsistent and inaccurate. The Cabinet argues that now Cisney has had considerable time to reconsider his position, it is likely he will be able to come up with a plausible response or explanation to the questions asked by the Cabinet's attorney.
Second, the Cabinet argues it will be adversely affected in the event of a retrial because it has spent a significant amount of time and preparation for the first trial that cannot be recovered. It states that a retrial would force it to again gather its witnesses and prepare them to testify on matters that occurred some time ago. Further, the Cabinet argues it would be required to incur significant travel, lodging, and compensatory time for its attorneys. Finally, the Cabinet argues it would be difficult, if not impossible, to get a jury as "remarkably educated and attentive" as the jury that served in the first trial.
In response to the element of surprise argument by the Cabinet, Cisney asserts that surprise is not and should not be a proper part of litigation seeking the truth. He notes that the entire portion of the civil rules section on discovery is "to AVOID surprise at trial."
In response to the Cabinet's argument that it would be adversely affected by having to locate witnesses and again prepare them for trial, Cisney argues that "time spent preparing a lay witness is really time spent manipulating the testimony of the witness." He states that "[r]efreshing recollections is something that is properly done in open court, not in private witness preparation."
As for the Cabinet's argument that it is adversely affected because it won't have the same jury, Cisney responds that he "is dumbfounded by this." He states that the Cabinet's argument in this regard is like saying, "I am prejudiced because I had a great jury and I might not get another."
We conclude there was substantial evidence to support the trial court's finding that the failure to enforce the settlement agreement would adversely affect the Cabinet's rights and that such finding was not clearly erroneous. See CR 52.01. And, we conclude that an evidentiary hearing was not required to resolve this issue.
This is not a case where the settlement agreement sought to be enforced was entered before the trial commenced. If that were the case, then Cisney's argument that the Cabinet was not adversely affected would have significantly more weight. Rather, in this case there are unassailable facts that lead to the conclusion that the Cabinet would be adversely affected if the settlement agreement is set aside.
In this case the jury was empaneled and three witnesses, including Cisney, testified. The third day of the trial had been completed, and it was Cisney's attorney who initiated contact with the Cabinet's attorneys in an effort to settle the case. Witnesses for the Cabinet, who had been called to testify and were present in the hallway, were dismissed. If there is a retrial, the witnesses will have to be located and again prepared to give their testimony. Expenses were incurred by the Cabinet that may not be recovered. We believe these unassailable facts have sufficient probative value to induce conviction in the minds of reasonable persons that the Cabinet's rights have been adversely affected. Fuller, 481 S.W.2d at 308.
Because we conclude the finding of the trial court that the Cabinet would be prejudiced should the agreement not be enforced is supported by substantial evidence and thus not clearly erroneous, we affirm the opinion and order of the trial court granting the Cabinet's motion to enforce the settlement agreement.
ALL CONCUR. BRIEFS FOR APPELLANT: Tony Cisney, pro se
Louisville, Kentucky BRIEF FOR APPELLEE: Jennifer Wolsing
Frankfort, Kentucky