Opinion
NO. 2015-CA-001632-MR
01-20-2017
BOBBY G. WOMBLES APPELLANT v. PREFERRED AUTOMOTIVE SALES, INC. A KENTUCKY CORPORATION APPELLEE
BRIEF FOR APPELLANT: Bobby G. Wombles, pro se Lexington, Kentucky BRIEF FOR APPELLEE: Katherine K. Yunker Lexington, Kentucky
NOT TO BE PUBLISHED APPEAL FROM FAYETTE CIRCUIT COURT
HONORABLE ERNESTO SCORSONE, JUDGE
ACTION NO. 12-CI-04454 OPINION
AFFIRMING IN PART, VACATING IN PART, AND REMANDING
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BEFORE: KRAMER, CHIEF JUDGE; D. LAMBERT AND TAYLOR, JUDGES. LAMBERT, D., JUDGE: Bobby G. Wombles, a licensed Kentucky attorney, appeals from the Fayette Circuit Court's September 2, 2015 judgment in favor of appellee, Preferred Automotive Sales, Inc. (Preferred). The circuit court interpreted a legal services contract between the parties and orally found that Wombles had overcharged Preferred for legal services. The circuit court's judgment consequently ordered Wombles to reimburse Preferred. After review, however, we only partially affirm.
I. BACKGROUND
Preferred is a Kentucky automobile dealer headquartered in Nicholasville, Kentucky. It is owned by Keith Slaughter. In 2008, Preferred was a defendant in a lawsuit relating to one of the automobiles it sold. A Jefferson County jury ultimately returned a $232,560.09 jury verdict against Preferred in that case (hereinafter, "the Allen litigation"). The result prompted Slaughter to sue his attorneys for legal negligence.
According to a four-page memorandum prepared by attorney Bobby Wombles, Slaughter considered bringing legal malpractice claims against three groups of attorneys who had represented his company in the Allen litigation: The first group ("Smith") represented Preferred at trial; the second group ("Zielke") represented Preferred both on appeal and later when it filed for bankruptcy protection; and the third group ("Grasch") replaced Zielke during the bankruptcy proceedings. Through an engagement letter signed by the parties in August 2009, Slaughter retained Wombles and attorney Michael Hamilton to pursue "possible claims existing and/or arising out of (or related to) [the Allen litigation]." As part of a modified contingent fee structure, the engagement letter specifically provided that Wombles "[would] charge for his time at a reduced rate of $125.00 per hour."
In September 2009, Grasch sued Preferred to recover allegedly unpaid legal fees arising from the Allen litigation. Beaten to the punch, as it were, Preferred answered Grasch's complaint and counterclaimed for legal malpractice. Preferred also initiated a separate lawsuit six months later against Smith and Zielke for legal malpractice. Similar to Grasch, Smith claimed that Preferred still owed legal fees from the Allen litigation.
Wombles billed Preferred for the legal work he performed in connection with these two cases. From June 2009 to March 2011, Wombles charged $125 per hour for his work relating to both the Grasch and Smith cases. After this time, however, Wombles started charging a higher rate of $225 per hour for his work on the Grasch case. He continued to charge $125 per hour for his work on the Smith case.
In July 2012, Wombles filed an action in Fayette District Court against Preferred, alleging that he was owed $3,787.24 in unpaid legal fees. After receiving an amended complaint wherein Wombles claimed an additional $960, Preferred counterclaimed, inter alia, that Wombles had breached the terms of the engagement letter by charging $225 an hour for the Grasch case. Accordingly, Preferred sought rescission of any agreement created by the engagement letter and recovery of the $24,857.50 already paid to Wombles. Neither Wombles nor Preferred ever demanded a jury trial. In fact, the only party to demand a jury trial at any time was Hamilton, who Wombles had brought into the litigation via third-party complaint but later agreed to dismiss.
Following transfer to the Fayette Circuit Court and a lengthy discovery process, a trial was finally held on the matter in August 2015. The primary issue considered by the circuit court was whether the engagement letter was the only agreement between the parties. In open court, the circuit court answered this question in the affirmative based on the presence of the engagement letter and ruled from the bench that the $125 hourly rate applied to all of Wombles' legal work. The circuit court then tackled the issue of damages. As to this issue, the circuit court once again made two oral findings: (1) that Preferred had paid Wombles for all of his work; and (2) that Wombles had breached the agreement by charging $225 per hour for the Grasch case instead of $125 per hour. Based on these findings, the circuit court ostensibly subtracted $100 for every hour billed on the Grasch case following March 2011 and concluded that Preferred had overpaid Wombles by $2,549.82. The circuit court entered a final written judgment ordering Wombles to refund that amount plus court fees. Notably, the circuit court's judgment did not expressly include the same factual findings that were announced at trial. Instead, the judgment's language merely stated the following:
The Court having held a bench trial beginning on August 18, 2015, and having announced its findings of fact and conclusions of law thereon in open court at the conclusion of the trial proceedings on August 19, 2015, IT IS HEREBY ORDERED AND ADJUDGED
that . . . [.]Wombles brought this appeal after the circuit court denied several post-judgment challenges, including a motion that the circuit court enter a new judgment with written findings from the record.
II. STANDARD OF REVIEW
All matters tried upon the facts without a jury are reviewed under the standard set forth in CR 52.01. Under that standard, the trial court's factual findings will not be disturbed unless clearly erroneous, and due regard will be given to the trial judge's assessment of witness credibility. The trial court's decisions on a matters of law, however, receive no deference and are reviewed de novo. Clark v. Bd. of Regents of Western Kentucky University, 311 S.W.3d 726, 729 (Ky. App. 2010). The interpretation of a contract, as well as its legal effect, is a matter of law. Cumberland Valley Contractors, Inc. v. Bell County Coal Corp., 238 S.W.3d 644, 647 (Ky. 2007).
Kentucky Rules of Civil Procedure. --------
III. DISCUSSION
On appeal, Wombles essentially attacks the circuit court's judgment on two distinct fronts. He first argues there should have been a jury trial. He then argues the circuit court failed to make adequate factual findings vis-à-vis the amount of legal work he performed for Preferred and the legal effect of the engagement letter. For the following reasons, we only agree with Wombles' second argument.
1. A bench trial was appropriate.
Under CR 38.02, "[a]ny party may demand a trial by jury of any issue triable of right by a jury by serving upon the other parties a demand therefor in writing at any time after the commencement of the action and not later than 10 days after the service of the last pleading directed to such issue." If a party fails to serve such a demand, his failure constitutes a waiver of a jury trial. CR 38.04; Loy v. Whitney, 339 S.W.2d 164, 166 (Ky. 1960). If such a waiver occurs, CR 39.02 permits the trial court upon motion from the waiving party to hold a jury trial on any or all of the issues. The decision to grant or deny a party's motion in such an instance is left to the broad discretion of the trial court. Division of Parks, Dept. of Conservation v. Hines, 316 S.W.2d 60, 61 (Ky. 1958).
Here, it is undisputed that Wombles never demanded a jury trial—not on the issues raised in his complaint, not on the issues raised in Preferred's counterclaim. It is also undisputed that Wombles never moved the circuit court to hold a jury trial with respect to any of these issues. Instead, Wombles only argues that he was vicariously entitled to a jury trial because Hamilton, a third-party defendant, demanded one. This is untenable under CR 38.02. Hamilton was a separate party who exercised his individual rights under the civil rules to have a jury consider his claims and defenses, and the parties agreed to dismiss him from the action eight months before the trial commenced. At that point, Hamilton's rights were no longer in dispute, and because they were no longer in dispute, his jury demand carried no legal effect. It certainly was not available for Wombles to adopt eight months later in an effort to challenge an unfavorable bench verdict after the fact.
2. The circuit court did not adequately incorporate its factual findings into the final written judgment
For his second and final argument, Wombles asserts that the circuit court's final judgment was deficient under CR 52.01. We must agree. Circuit courts, with a couple of exceptions inapplicable to this case, speak only through written orders entered into the record. Kindred Nursing Centers, Ltd. Partnership v. Sloan, 329 S.W.3d 347 (Ky. App. 2010). Findings of fact and conclusions of law made by the circuit court also cannot be considered on appeal unless properly incorporated into a written order. Id. Otherwise, this Court is precluded from conducting a meaningful review and is placed in the precarious position of interpreting the court's spoken words which likely would contain immaterial statements, dictum, and irrelevant rhetoric unrelated to the legal issues on appeal.
Here, by failing to incorporate which specific oral findings the circuit court intended this Court to rely upon for review, the parties have found themselves in the objectionable position of having to piece together the circuit court's actual findings from the record. As this practice does not lend itself to meaningful appellate review, we hereby vacate this portion of the judgment and remand for the circuit court to make specific written findings of fact and conclusions of law in accordance with CR 52.01.
ALL CONCUR. BRIEF FOR APPELLANT: Bobby G. Wombles, pro se
Lexington, Kentucky BRIEF FOR APPELLEE: Katherine K. Yunker
Lexington, Kentucky