Opinion
NO. 2012-CA-001585-MR
07-03-2014
RICK PIPPIN a/k/a RICK L. PIPPIN a/k/a RICK LEE PIPPIN APPELLANT v. TRAVIS ASSOCIATES, LLC APPELLEE
BRIEF FOR APPELLANT: J. Gregory Joyner Tyler F. Stebbins Louisville, Kentucky BRIEF FOR APPELLEE: Donald L. Cox Paul M. Baker William H. Mooney Louisville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE CHARLES L. CUNNINGHAM, JR., JUDGE
ACTION NO. 09-CI-003111
OPINION AND ORDER
VACATING AND REMANDING
AND
DENYING MOTION TO DISMISS
BEFORE: COMBS, DIXON, AND VANMETER, JUDGES. COMBS, JUDGE: Rick Pippin appeals an order of the Jefferson Circuit Court that sought to dismiss claims that have yet to be asserted against the appellee, Travis Associates, LLC. After careful consideration, we vacate and remand.
In March 2009, HSBC Bank USA filed a foreclosure action against Pippin. Numerous other creditors holding mortgages on Pippin's home were joined as parties to the litigation.
A final judgment in favor of HSBC and an order of sale were entered in June 2009.
Pursuant to the provisions of Kentucky Revised Statute[s] (KRS) 275.260, one of Pippin's judgment creditors eventually sought a charging order against Pippin's interest in a Kentucky limited liability company, Pippin-Ridgeway, LLC. In an attempt to satisfy its judgment through the use of the charging order, the creditor sought to attach any distributions which might be made by the company to its member, Pippin. The trial court issued the charging order against Pippin's interest in Pippin-Ridgeway on May 10, 2010. Through an agreed order, the charging order was dissolved by the Jefferson Circuit Court on September 20, 2010.
On September 23, 2010, Pippin-Ridgeway filed a motion for leave to file an intervening complaint in the foreclosure action. In October 2010, Travis Associates, which held the remaining 50% membership interest in Pippin-Ridgway, and John J. Bleidt, to whom Pippin had given his proxy, filed intervening complaints seeking a judicial dissolution of Pippin-Ridgeway. The circuit court's order providing for the dissolution of the company was entered on November 15, 2010, and a special master was appointed to make recommendations with respect to the winding up of the company's affairs.
In a report filed with the court on January 28, 2011, the special master recommended that Travis Associates be appointed as receiver to manage the company through its dissolution. The court accepted the recommendation, and with no objection having being raised, the court appointed Travis Associates to serve as receiver for Pippin-Ridgway on February 7, 2011.
As receiver, Travis Associates filed regular reports and monthly accountings with the court and liquidated Pippin-Ridgeway's assets. In February 2012, the circuit court approved the final report of Travis Associates, which then discharged from its responsibilities as receiver.
On May 9, 2012, Travis Associates filed a motion to dismiss the action commenced by HSBC. At a hearing conducted several days later, Pippin objected to dismissal of the action. He claimed that he intended to assert claims against Travis Associates and/or its members. The trial court gave Pippin until July 1, 2012, to file the unidentified claims. However, Pippin filed nothing more, and on July 9, 2012, an order of the Jefferson Circuit Court was entered. The order contained the necessary finality language and adjudged that there "are no other issues with respect to Pippin Ridgeway, LLC, John Bleidt, Rick Pippin and Travis Associates LLC necessary for resolution by the court." The court dismissed with prejudice "[a]ll remaining claims relating to Pippin-Ridgeway, LLC, John Bleidt, Rick Pippin and Travis Associates LLC."
On July 18, 2012, Pippin filed a motion to alter, amend, or vacate the order of dismissal. Pippin contended that "any order of this Court that purports to dismiss claims with prejudice that have not been asserted in this foreclosure action would be premature and an abuse of discretion."
The circuit court granted the motion, and an amended order of dismissal was entered on July 24, 2012. This order also contained the necessary finality language and dismissed with prejudice "[a]ll remaining claims relating to Pippin-Ridgeway, LLC, John Bleidt, Rick Pippin, and Travis Associates, LLC..." However, the order also provided that "any and all claims of Rick L. Pippin or Travis Associates, LLC or any of its members arising out of their prior membership in Pippin-Ridgeway, LLC shall be preserved and shall be excepted from this order."
On August 2, 2012, Travis Associates filed a motion to alter, amend, or vacate the order entered July 24, 2012. Travis Associates contended that the court's order was ambiguous in several respects.
The circuit court granted the motion. Its last order was entered on August 13, 2012. This order, too, contained the necessary finality language; it dismissed with prejudice "[a]ll claims which were brought or could have been brought in this Action" and "[a]ny claims arising out of steps taken by the Receiver and/or steps of Travis Associates and/or its affiliates after the Action was filed...." The order provided that the only claims remaining are "those claims which arose prior to the instant Action." This appeal followed.
Before the parties' briefs were filed, Travis Associates filed a motion to dismiss the appeal. The company contended that John Bleidt and Pippin-Ridgeway are indispensable to the appeal and that Pippin's failure to include them as appellees in his notice of appeal is fatal to the proceedings. Pippin argued that the business entity, Pippin-Ridgeway, no longer exists to be named as a party. He argued that Bleidt held a mere voting proxy in the now defunct company and that Bleidt has no role in the litigation. Pippin contended that the presence of neither Pippin-Ridgeway nor Bleidt is required as part of the appellate proceedings. The motion was passed to the merits panel for disposition.
The notice of appeal is the exclusive means by which an appellant invokes the appellate court's jurisdiction. City of Devondale v. Stallings, 795 S.W.2d 954 (Ky.1990). Under the appellate civil rules, failure to name an indispensable party in the notice of appeal is a "jurisdictional defect that cannot be remedied." Id. at 957. Neither the doctrine of substantial compliance nor the amendment of the notice after time has run can save a defective notice. Id.
Frequently, parties who were necessary at trial are not necessary on appeal. Nelson County Bd. of Educ. v. Forte, 337 S.W.3d 617 (Ky.2011). If a party's participation in the appeal is unnecessary to grant relief and if requiring its participation would force unnecessary expense on the party, the party is not indispensable. Id. citing Braden v. Republic-Vanguard Life Ins. Co., 657 S.W.2d 241 (Ky.1983).
Under the circumstances, we conclude that neither Bleidt nor Pippin-Ridgeway is a necessary or indispensable party on appeal. The relief sought can be granted in its entirety without their participation in this proceeding, and neither is a necessary party to further proceedings in the trial court if the order of dismissal were to be vacated. Accordingly, the motion to dismiss the appeal is DENIED.
We turn now to address the merits of the appeal. Pippin argues that the order entered August 13, 2012, unjustly precludes any action that he may choose to pursue against Travis Associates separately and apart from its role as receiver during dissolution. We agree.
The court's order pre-empts any and all claims between the parties that arose after March 27, 2009. There does not appear to be any factual or legal basis for such sweeping language. While we make no comment on the viability of Pippins's claims for breach of fiduciary duty and/or intentional interference with prospective business relations, we cannot permit the dismissal of any such claim before it has been asserted. The dismissal order is overly broad in that it encompasses claims far outside the scope of the proceedings undertaken in the foreclosure action. For this reason, the order must be VACATED.
The order of the Jefferson Circuit Court is vacated and remanded for additional proceedings.
DIXON, JUDGE, CONCURS. ENTERED: July 3, 2014
/s/ Sara W. Combs
JUDGE, COURT OF APPEALS
VANMETER, JUDGE, DISSENTS AND FILES SEPARATE OPINION.
VANMETER, J., DISSENTING: I respectfully dissent. The circuit court exercised its equitable powers in appointing a receiver to wind up the affairs of the Pippin-Ridgeway, LLC. While it may be that the circuit court did not abide by KRS 31A.080(2) in that it appointed as receiver a party to the proceeding, Travis Associates, LLC, that order was immediately appealable. KRS 425.600(1). Pippin failed to appeal, and as a result, that issue has been waived.
Next, every transaction proposed by the receiver was sanctioned by the circuit court following a motion. Pippin does not claim that he failed to receive notice and did not object at the time to any of these motions. Pippin now claims self-dealing by the receiver in that the properties were ultimately transferred to other entities in which Travis Associates, LLC members were involved. But a cursory review of the on-line business filings in the Kentucky Secretary of State's office reveals that information was readily available either at the time of the motions, or shortly thereafter. See Kentucky Rules of Evidence (KRE) 201 (court may take judicial notice at any stage of the proceeding of "fact . . . not subject to reasonable dispute in that it is . . . [c]apable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned[]"). These records indicate that each transferee entity, i.e., Julep Holdings, LLC, CPT Holdings, LLC, and Chamberlain Holdings, LLC, was organized by members of the Travis family, who were also the members of Travis Associates, LLC. In addition to the pre-hearing notice period on each motion/transaction, the circuit court entered an Order Approving the Receiver's Final Report and Discharging the Receiver. That Order provided that it was final and appealable. Pippin did not appeal. And, with respect to the final motion to dismiss this case, the circuit court granted Pippin six weeks in which to assert claims following Travis Associates' final motion to dismiss. Pippin failed to do so.
Based on the foregoing, my view is that the circuit court properly entered its order dismissing the present action with prejudice as to all matters arising out of the receivership. I would affirm the Jefferson Circuit Court in all respects. BRIEF FOR APPELLANT: J. Gregory Joyner
Tyler F. Stebbins
Louisville, Kentucky
BRIEF FOR APPELLEE: Donald L. Cox
Paul M. Baker
William H. Mooney
Louisville, Kentucky