Betty Dameron v. Hon Samuel Todd Spalding Judge, Taylor Circuit Court ( 2017 )


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    DAWN SPALDING-MCCAULEY
    . oN APPEAL FROM COURT 0F APPEALS “
    v. -- cASE No_. 2016-CA-_000421
    TAYLOR cIRcUIT cOURT N0. 14-01-00047
    HON. SAMUEL TODD~ SPALDING, JUDGE ' ' . AP?ELLEE
    TAYLOR _cIRCUIT COURT - f ``
    AND _
    BETTY DAMERoN, INDIVIDUALLY REAL PA-RTIES IN INTEREST
    AND AS EXECUTRIX OF THE ES_TATE
    OF PAUL DAMERON; MIK.E_ BREEN;
    AND MIKE BREEN, ATTORNEY AT LAW, P.S.C.
    AND ' , `` _2016-30-000463-MR
    _BETTY DAME_RON,-``INDI_vIDUALLY_ , `` 1 APPELLANTS ,
    AND AS ExEcUTRIx 0F THE_ ESTATE ‘ ' '
    0F'P'AUL DAMERON; MIKE BREEN;
    _ AND MIKE BREEN, ATTORNEY-AT LAW, P_.s.'c_
    `` ON APPEAL FROM coURT OF APPEALS
    v. _ cA_SE NO. 2016-cA-000_308
    ' TAYLOR CIRCUIT coURT NO. 14-cI-00047
    HON. SAMUEL TODD SPALDING, JUDGE `` APPELLEES
    TAYLOR CIRCUIT COURT?
    AND
    DAWN SPALDING-MCCAULEY REAL PART\; IN INTEREST
    MElVIORANDUM OPINION OF THE COURT
    AFFIRMING
    On July 24, 2013, Paul Allen Dameron died as a result of injuries he
    sustained while driving his vehicle in 'Taylor County, Kentucky. The injuries 1
    were caused by a rock that was propelled through Mr. Dameron’s windshield.
    The rock was thrown from a Bush Hog mower operated by Terry Mattirigly.
    Betty Dameron (“Dameron”) is Mr. Dameron’s surviving spouse and the
    Executrix of his Estate. She entered into am'ittenagreement with attorney
    Dawn Spalding-McClauley (“McCauley”) to represent her and the Estate. On
    February 8, 20 14, McCauley filed a wrongful death suit on-behalf`` of her clients
    in Taylor Circuit Court. Dameron subsequently terminated McCauley``"s
    representation and hired attorney Mike Breen (“Breen”) to handle the case
    moving forward. Breen entered his appearance in the case and the court
    issued an order permitting McCauley to withdraw as counsel of record.
    During the summer of 2``014, Breen entered into a settlement agreement
    with Mattingly’s insurance carrier for $1,000,000.00 and also entered into an
    agreement with Paul Dameron’s insurance provider for $100,000.00. Breen
    received $385,000.00 in attorney fees plus additional expenses
    On September 3, 2014, Breen filed a motion to apportion the proceeds of
    the wrongful death claim because Dameron and her step-daughter could not
    agree on the appropriate dispensation of the proceeds McCauley, Dameron’s
    first attorney, also filed a motion to intervene under the theory of dquantum
    meruit and to attach the attorney fees paid to Breen. The trial court entered an
    2
    order allowing McC_auley to intervene. McCauley- also filed a notice.of an
    attorney lien. The_ court ordered that the proceeds of the wrongful death action
    and attorney fees be held by the court pending further orders.
    Dameron subsequently fileda‘KBA complaint against McCauley.
    Discovery revealed that Breen’s office assisted in the preparation of the KBA
    complaint As a result, McCauley filed a motion to compel the production of all
    written correspondence between Breen and Dameron regarding the alleged
    breach of McCauley’s ethical duties.
    The trial court granted the motion to compel and concluded that the
    attorney~olient privilege was waived because Breen and Dameron had made the
    communications,an issue 'by alleging that McCauley had been discharged for
    cause as a defense to McCauley’s quantum meruit claim. See Baker v.
    Shapero, 203 S.W.Sd 697 (Ky. 2006). Breen filed a motion to reconsider which
    was denied by the trial court.
    The parties filed cross petitions, each seeking a writ of prohibition. The
    Court of Appeals denied the'writ requests and the parties appealed to this
    Court. Case Nos. 2016-SC-000462-'MR and 2016-SC-000463-MR.- Having
    reviewed the facts and the law, we affirm the Court of Appeals’ denial of the
    petitions. ,
    Procedural Issues
    Dameron and Breen have filed motions for oral argument Having
    considered the motions, the responses, and being otherwise sufficiently
    advised, the parties’ motions for oral argument a_re hereby DENIED. On its -
    own motion, the Court orders that Case Nos. 20-16-8€-000462-MR and 2016-
    _SCjOOO463-MR are hereby CONSOLIDATED. `` _ _ »\
    n Standard.of Review _
    An appellate court has discretion to' grant la writ where a trial court is
    proceeding within its jurisdiction upon a showing that the court 'i``s: 1) acting or
    is about to act erroneously; 2) there exists no adequate»remedy by appeal or
    otherwise, and 3) great injustice and irreparable injury will result if the petition
    ' is not granted. Hoskins v. Maricle: 150 S.W.Sd‘ l, iO (Ky. 2004). We review the n
    Court of Appeals’ determination under an abuse of discretion standard.
    sowders q.- Letais, 241 s.w.3d 3.19;l 322 (Ky. 2007). -
    case ivo. 2016-sc-'463‘-MR
    Breen and Dameron seek a writ “prohibiting the trial court from
    enforcing any orders requiring Dameron or Breen to testify about or disclose '
    the confidential com-munications, and prohibiting him from enforcing any
    orders requiring Mr. Breen to withhold his fee.” They argue that the
    compulsion of this information violates the attorney-client privilege. We have
    previously held that “v_iolation of a privilege satisfies both the requirement of no
    adequate remedy by =appeal, ‘because privileged information cannot be recalled
    once it has 'been disclosed,’ and the substitute requirement in ‘special cases’
    that the administration of justice would suffer.” Collins v.~Braden, 384 'S.W.3d
    - 154, 1581(Ky. 2012j (citing St.-Luke Hospitals, Inc. v. Kopowslci, 
    160 S.W.3d 771
    , 775 (Ky. 2005]). Because the present case alleges a violation of the
    attorney-client privilege, it is proper for writ review. ' '
    Vlie begin by noting that the trial court specifically ordered the production
    of “all written correspondence, including emails, between [Breen] and Betty
    Dameron as it pertained to any alleged breach of attorney McCauley’s ethical
    duty to Betty Dameron.” The order continued as follows: “the Court concludes ,
    that attorney iVicCauley should have'the ability to cross-examine attorney
    Breen concerning the dismissal [of the defendant Bush Hog] because such
    questions will be relevant and fundamental fairness requires same.” Therefore,
    Breen and Darneron’s broad assertion that the court ordered them “to testify”
    about the confidential communications at issue here is unfounded. d
    KRE 503 provides: “A client has a privilege to‘refuse to disclose and to
    prevent any other person from disclosing a confidential communication made
    fo``r’ the purpose of facilitating the rendition of professional legal services to the
    client[.]” However, KRE- 503 (d)(3) states that there is no privilege for “a
    communication relevant to an issue of breach of duty by a lawyer lto the client
    or by a client to the lawyer[.]” In 3M v. Engle, we observed that “a client ‘waives
    the privilege if he . . . voluntarily discloses or consents to disclosure of any'
    significant part of the privilege matter.’o This waiver may be explicit, but it may
    also be implied.” 
    323 S.W.3d 134
    , 188 (Ky. 2013) (Internal footnotes omitted).
    The lCourt of Appeals applied our ruling in Engle in its analysis of the present
    CaS€l
    As the trial court noted, Breen did not purport to represent
    Dameron in the KBA complaint proceeding The KBA complaint -
    was written and signed by Dameron and not by Breen. Therefore,
    we conclude that any communications between Dameron and
    Breen regarding the``KBA complaint were not for the purpose of
    “f``acilitating the rendition of professional legal services.” Further,
    the communications at issue concerned the breach of a duty by
    5
    McCauley to Dameron. Therefore, there is no privilege under KRE
    503(d)(3). More'over, even if the privilege applied, such privilege
    was waived because Dameron had placed the communications at'
    issue by asserting that McCauley was terminated for cause in
    defense to the quantum meruit claim. We cannot conclude that
    the_ trial court abused its discretion by rejecting the claim of
    privilege.
    We agree with the Court of Appeals’ reasoning and conclusions
    Breen and Dameron also request a writ prohibiting the trial court from
    enforcing its_ order withholding Breen’s attorney fees pursuant to KRS 425.01 1.
    They argue that the court’s order constitutes an unconstitutional taking of
    property resulting in irreparable injury. As correctly 'noted by the Court of
    Appeals, however, “the validity of prejudgment attachments may be adequately
    remedied upon direct appeal.” Therefore, Dameron and Breen have failed to
    demonstrate the lack of an adequate remedy by appeal. This issue also fails to
    satisfy our “special case” exception.
    Case _1§0.12016-80-462-MR
    Attorney McCauley argues the trial court acted outside its jurisdiction
    when it ordered a jury trial on her quantum meruit claim. She alternatively
    - argues that the trial court acted erroneously within its- jurisdiction by ordering
    a jury trial. Mc¢auley specifically alleges that quantum meruit seeks an
    equitable remedy for which there is no right to a jury trial. -
    We agree with the Court of Appeals’ conclusion that “the circuit court
    clearly has subject-matter jurisdiction over cases involving a claim of quantum
    meruit;‘” Therefore, we must determine whether relief is available under the ``
    second class of writ actions_where the trial court was acting within its
    jurisdiction.
    - It_ is well-established that .“[t]he right to trial by jury has occupied a
    central place in our jurisprudence.” B.F.M. Bldg., Inc. v. Trice, 464 S,W.Zd 617,
    619 (Ky. 1971). In civil cases, however, “Kentucky law recognizes exceptions to
    the right to a jury, including causes of action at common law that would have
    been regarded as arising i-n equity rather than law.”} Daniels v. CDB Bell, LLC,
    
    300 S.W.3d 204
    , 210 '(Ky. App. 2009)_ fciting Reese's Administrator v.
    Youtsey,l 
    13 Ky. 839
    , 69 S.W.-'i' 08 (Ky. 1902]]; and Steelvest, Inc. v. Scansteel
    service center, rne., 903 s.w.2d 104, 103 (Ky. 1995). Therefore, “[i]f the nature
    of the issues presented is essentially equitable, no jury trial is available 
    Id. (citing Meyers
    v. Chapman Printing Co., Inc., 
    840 S.W.2d 814
    (Ky. 1992)).
    Although the underlying issue in Daniels was a claim seeking to pierce
    the corporate veil, it provides an apt analogy to the present case. Quantum
    meruit is a common law action in equity. And although .we have never
    addressed this issue directly, we have previously embraced the_Court of
    Appeals’ decision in Daniels and adopted much of its language verbatim. See
    Schultz v. General Electric Healthc'are Financial Seri)ices Inc., 
    360 S.W.3d 171
    ,
    174-76 (Ky. 2012).
    Furthermore, we stated in Baker v. Shaperothat “when an attorney
    employed under a contingency fee contract is discharged'without cause before
    completion of the contract, he or she is entitled to fee recovery on a quantum .
    meruit basis only, and not on the terms of the 
    contract.” 203 S.W.3d at 699
    .
    Several Kentucky cases indicate that this determination is most appropriately
    decided by the trial court. See id.; and e.g., Lofton v. Fairmont Specialty
    In.surance Managers, Inc., 
    367 S.W.3d 593
    (Ky. 2012).
    7
    Therefore, we agree that the trial court committed clear error here by
    ordering this case tried before a jury. H_owever, in order to prevail on her writ
    petition, McCauley must demonstrate that there exists no adequate,remedy by
    appeal or otherwise, and that a great injustice and irreparable injury will result
    if the petition is not granted. McCauley asserts that there is no adequate
    remedy by appeal here because the bar complaint against her would be
    admitted as evidence in the jury trial and that attorney discipline matters are
    confidential unless public sanction is imposed. Supreme Court 'Rule (SCR)_
    3.150.
    iNe‘have previously defined “no adequate remedy by appeal or otherwise”
    to mean that the injury to be suffered “could not therefore be rectified in
    subsequent proceedings in the case.” Bender v. Eaton, 
    343 S.W.2d 799
    , 802
    (Ky. 1961). According to McCauley, her reputation in the community would be
    diminished if this information was made public. McCauley also argues that
    jurors are not qualified to make equitable determinations .
    As correctly noted by the Court of Appeals, “[j]uries are routinely
    expected to adjudge the conduct of attorneys in complex situations Such as
    legal malpractice cases.” We do not believe the mere evidence that a bar
    complaint has been filed against McCauley is sufficient to cause irreparable
    . harm which justifies a writ. We also note that the trial court-entered an agreed
    order sealing any documents referring to the KBA file and reserving the right to
    rule on the admissibility of any information pertaining to the KBA file prior to.
    the jury trial. What is critical to our analysis here, however, is that McCauley
    may appeal the trial court’s jury trial order and, if successful, she may retry
    . s
    the case before the trial court without a jury. Therefore, there is a clear and
    adequate remedy by appeal here. Compare Commonwealth'v. Green, 
    194 S.W.3d 277
    , 280 (Ky. 2006) (“If the district court proceeds with a bench trial,
    as has been ordered, jeopardy will attach and retrial by a jury will be
    prohibited under KRS 505.030. This alone is sufficient to demonstrate the lack
    of an adequate remedy by appeal.”). l
    Mo'reoverj there is no great injustice and irreparable injury here. We
    have defined “great' and irreparable” injury as ~“something of a ruinous
    nature.” 
    Bender, 343 S.W.2d at 801
    . Similar_ to the previous issue, ``we cannot
    conclude that the potential for publicity here would be “ruinous” to McCauley.
    McCauley also insists that this case satisfies the “special case” exception
    to our writ standard. However, “our case law is clear that the certain-special-
    cases exception only .supplants the requirement that a petitioner prove l
    irreparable harm in the absence of a writ, not the requirement that there be no
    adequate remedy by appeal or otherwise.” Ridgetuay Nursing & Rehabilitation_
    Facility, LLC v. Lane, 
    415 S.W.3d 635
    , 641-42 (Ky. 2013) (citing 
    Bender, 343 S.W.2d at 801
    ). As previously discussed, McCauley has failed to demonstrate
    the absence of an adequate remedy on appeal. nccordingly, the Court of
    Appeals did not abuse its discretion in denying McCauley’s petition.
    Although our writ standard has not been satisfied here, we are compelled
    to repeat our strong admonition that the trial judge is committing “clear error”
    if he proceeds with a jury trial on -a quantum merl.iit claim. The only role a jury '
    could possibly have in this action in equity would be as an advisory jury on
    issues of fact pursuant to Kentucky Rule of Civil Procedure 39.03. _See Barrier
    9
    v. Brewster, 
    349 S.W.3d 823
    (Ky. 1961) (the “issues” that can be tried by an
    advisory jury are only issues of fact and the judge cannot delegate his
    discretion or_equitable function). n
    4 Conclusion n
    For_ the foregoing reasons,' we affirm the Court of f\ppeals’ denial of the
    petitions seeking a .writ of prohibition filed in Case Nos. 20 16-SC-000462-MR
    and 2016-sc-000463~MR.
    lAll sitting. All concur.
    COU_NSEL FOR APPELLANT/REAL PARTY IN INTEREST, DAWN SPALDING-
    MCCAULEY:
    David A. Nunery
    Steven Casey Call
    . NUNERY 85 CALL, PLLC
    `` APPELLE:E;
    ' Hon. Samuel To.dd Spalding
    Judge, Taylor Circuit Court
    COUl\fSEL FOR APPELLA'NT/REAL PARTY IN INTEREST, BETTY DAMERON,
    INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF PAUL DAMERON:
    Michael Anthony Breen _
    Michael Anthony Breen, Attorney at Law, PSC
    'COUNSEL FOR APPELLANTS/ REAL PARTIES IN INTEREST, MIKE BREEN
    AND MIKE BREEN, ATTORNEY AT LAW, P. S. C.:
    Michael Anthony Breen
    Attorney at Law
    James Hadden Dean
    Sh_eehan, Barnett, Dean, Pennington, Little 85 Dexter, PSC
    19
    

Document Info

Docket Number: 2016 SC 000463

Filed Date: 7/10/2017

Precedential Status: Precedential

Modified Date: 7/13/2017