Opinion
2022-CA-1107-MR
08-16-2024
HELEN MITCHELL APPELLANT v. U.S. BANK TRUST NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY BUT AS COLLATERAL TRUST TRUSTEE OF FIRSTKEY MASTER FUNDING 2021-A COLLATERAL TRUST AND BAPTIST HOSPITAL EAST APPELLEE
BRIEF FOR APPELLANT: Todd K. Bolus Louisville, Kentucky BRIEF FOR APPELLEE: Sarah S. Mattingly K. Cassandra Carter Louisville, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM JEFFERSON CIRCUIT COURT HONORABLE CHARLES L. CUNNINGHAM, JR., JUDGE ACTION NO. 13-CI-403450
BRIEF FOR APPELLANT:
Todd K. Bolus
Louisville, Kentucky
BRIEF FOR APPELLEE:
Sarah S. Mattingly
K. Cassandra Carter
Louisville, Kentucky
BEFORE: ACREE, CALDWELL, AND LAMBERT, JUDGES.
OPINION
ACREE, JUDGE:
AFFIRMING
Appellant, Helen Mitchell, appeals the Jefferson Circuit Court's Order denying her post-relief from a final judgment, citing CR 60.02(e) and (f). Having reviewed the record, we affirm.
Kentucky Rules of Civil Procedure.
BACKGROUND
On March 2, 1999, Appellant executed a note and gave a duly recorded mortgage on property in Jefferson County to The Money Centre, Inc. as collateral. Shortly thereafter, Money Centre assigned the mortgage to Associates Home Equity Services (Associates). In December 2013, Appellant defaulted on the loan and Associates initiated foreclosure proceedings on the property. On July 12, 2016, the circuit court granted summary judgment against Appellant and afterwards entered a final order against her ordering sale of the property. Appellant did not appeal this final order. Subsequently, a series of assignments occurred - five in total - which ended when the mortgage was assigned to Appellee, U.S. Bank Trust National Association.
On July 26, 2022, Appellant filed her motion to vacate the final judgment pursuant to CR 60.02(e) and (f). In this motion, Appellant argued that Kentucky's champerty statute, KRS 372.060, voided the final judgment against her, entitling her to relief pursuant to CR 60.02(e). Alternatively, she claimed she was entitled to relief pursuant to CR 60.02(f). The circuit court denied this motion. This appeal followed.
Kentucky Revised Statutes.
ANALYSIS
First, Appellant requested relief pursuant to CR 60.02(e). Appellant alleges the circuit court erred in denying her CR 60.02 motion because the judgment against her is void by operation of Kentucky's champerty statute.
It is true, the law gives no authority to void judgments: "While trial courts are afforded discretion to address what constitutes a reasonable time under CR 60.02 . . ., the law is clear that void judgments are 'not entitled to any respect or deference by the courts.'" Phon v. Commonwealth, 545 S.W.3d 284, 306-07 (Ky. 2018) (quoting Soileau v. Bowman, 382 S.W.3d 888, 890 (Ky. App. 2012)). This is because, "[a] void judgment is a legal nullity, and a court has no discretion in determining whether it should be set aside." Soileau, 382 S.W.3d at 890 (citing Foremost Ins. v. Whitaker, 892 S.W.2d 607, 610 (Ky. App. 1995)).
Appellant claims the five subsequent assignments of the mortgage, which occurred after Associates initiated foreclosure proceedings against her, were champertous contracts; i.e., they were void.
Kentucky's champerty statute reads:
Any contract, agreement or conveyance made in consideration of services to be rendered in the prosecution
or defense, or aiding in the prosecution or defense, in or out of court, of any suit, by any person not a party on record in the suit, whereby the thing sued for or in controversy or any part thereof, is to be taken, paid or received for such services or assistance, is void.KRS 372.060. Thus, for a contract to be champertous, it must: (1) be "made in consideration of services to be rendered in the prosecution or defense . . . of any suit"; (2) "by any person not a party on record in the suit"; and (3) "the thing sued for or in controversy or any part thereof, is to be taken, paid or received for such services or assistance[.]" KRS 372.060. Moreover:
[C]hamperty is defined to be a bargain by the terms of which a person having otherwise no interest in the subject matter of an action undertakes to carry on the suit at his own expense or to aid in so doing in consideration of receiving, in the event of success, some part of the land, property or money recovered or deriving some benefit therefrom.Fordson Coal Co. v. Garrard, 125 S.W.2d 977, 981 (Ky. 1939) (citing Wilhoit's Adm'x v. Richardson, 236 S.W. 1025 (Ky. 1921)).
Critical to our analysis here, we note that "[w]here the cause of action is assignable, and the entire cause has been assigned, clearly the assignee has become the owner of the cause and he is the real party in interest." Louisville &N. R. Co. v. Mack Mfg. Corp., 269 S.W.2d 707, 709 (Ky. 1954) (citing Works v. Winkle, 314 Ky. 91, 234 S.W.2d 312 (1950); United States v. Aetna Cas. &Surety Co., 338 U.S. 366, 70 S.Ct. 207, 94 L.Ed. 171 (1949)). Thus, it stands to reason that if Appellee was assigned the entire cause of action, it is the real party in interest.
To the extent a cause of action is reduced to a judgment, the assignee of that judgment takes the very same right of his assignor to collect on that judgment, and such rights date from the time the judgment was rendered. Mackey v. Beckel, 1 Ky.L.Rptr. 67, 67, 1880 WL 7335, at *1 (Ky. 1880). This principle, as old as and never conflicted with the champerty law, was how sureties seek to recover from their principals. Fidelity &Deposit Co. of Maryland v. Sousley, 151 S.W. 353, 357 (Ky. 1912) ("payment of a judgment by a surety does not extinguish it so as to deprive the surety of the right to an assignment of the judgment for his benefit against the principal").
Here, it is without question that the mortgage, note, and judgment were assignable, and the record reveals the mortgage was properly assigned six times since its creation. It is undisputed that Appellee properly received the mortgage by assignment, and Appellant does not argue Appellee failed to receive the entirety of the cause of action and judgment. Thus, Appellee is the real party in interest, having received the entire cause of action, including rights to payment on the mortgage through a proper assignment. Further, there is no indication Appellee is undertaking this suit with no interest in it; to the contrary, as the real party in interest, this is Appellee's claim to pursue, the subject property being a mortgage interest in real estate. That mortgage has previously been adjudicated in default and foreclosed upon. For these reasons, the contract assigning the mortgage to Appellee was not champertous as defined by KRS 372.060.
Accordingly, the judgment against Appellant is not void, and she is not entitled to relief pursuant to CR 60.02(e).
Second, Appellant requests relief pursuant to CR 60.02(f). This rule allowing post-judgment relief is a catchall provision that is inapplicable here.
Under this rule, "a court may, upon such terms as are just, relieve a party or his legal representative from its final judgment, order, or proceeding upon the following grounds: . . . (f) any other reason of an extraordinary nature justifying relief." CR 60.02(f). "[A] court cannot grant relief from a final judgment . . ., except in 'aggravated cases where there are strong equities.'" Duncan v. Commonwealth, 640 S.W.3d 84, 90 (Ky. App. 2021) (Acree, J., concurring) (quoting Reed v. Reed, 484 S.W.2d 844, 847 (Ky. 1972)). Additionally, under the analogous federal rule, "district courts may only grant relief in the face of an 'extraordinary circumstance.'" Id.; see Ackermann v. United States, 340 U.S. 193, 199, 202, 71 S.Ct. 209, 212-13, 95 L.Ed. 207 (1950); Klapprott v. United States, 335 U.S. 601, 69 S.Ct. 384, 93 L.Ed. 266 (1949).
Here, Appellant points to no extraordinary circumstance that justifies granting relief under the high standards of CR 60.02(f). A review of the record also fails to reveal anything unjust about Appellant's situation.
Accordingly, the circuit court did not err when it denied Appellant relief pursuant to CR 60.02(f).
CONCLUSION
Having reviewed the record, we find no error. We affirm.
ALL CONCUR.