Guy Ferrill, III, as of the Estate of Willena T. Ferrill v. Stock Yards Bank & Trust Company, Trustee Under the Will of May T. Doty ( 2023 )

RENDERED: JUNE 15, 2023
TO BE PUBLISHED
Supreme Court of Kentucky
2022-SC-0056-DG
GUY FERRILL, III, AS EXECUTOR OF THE APPELLANTS
ESTATE OF WILLENA T. FERRILL;
WILLENA FERRILL; AND G & W LAND
ENTERPRISES, LLC THROUGH WILLENA T.
FERRILL, GUY FERRILL, III AND VICTOR
CURTIS FERRILL
ON REVIEW FROM COURT OF APPEALS
V. NOS. 2019-CA-0531 & 2019-CA-0532
NELSON CIRCUIT COURT NO. 13-CI-00107
STOCK YARDS BANK AND TRUST APPELLEES
COMPANY, TRUSTEE UNDER THE WILL OF
MAY T. DOTY, DECEASED; AMY CASSADY;
FRANK B. CHUMLEY, JR.; JILL WALTON
PUCKETT; LYNN SHIPLEY; AND MIKE
WALTON
OPINION OF THE COURT BY CHIEF JUSTICE VANMETER
AFFIRMING IN PART AND REVERSING IN PART
Under Kentucky law, a life tenant who commits waste against the corpus
of an estate, “shall lose the thing wasted and pay treble the amount at which
the waste is assessed.” KRS1 381.350. Historically, our courts have recognized
a distinction between voluntary waste and permissive waste and found that our
1 Kentucky Revised Statutes.
waste statute—and its attendant statute of limitations—applies only to
voluntary waste. See Fisher’s Ex’r v. Haney, 180 Ky. 257, 202 S.W. 495, 496-
97 (1918). Because the statutory language supports such a distinction, we re-
affirm our long-standing case law and hold KRS 381.350 is applicable only in
instances in which a party has pled voluntary waste. Accordingly, we reverse
the Court of Appeals opinion insofar as it holds otherwise.
I. FACTUAL AND PROCEDURAL BACKGROUND
Mary T. Doty died testate in 1989. Her will contained a provision
bequeathing to Willena Ferrill and her husband, Guy “Allison” Ferrill, a life
estate upon property, real and moveable, situated in Nelson County owned by
Doty during her life. Upon the death of Willena and her husband, the property
became part of the residuary estate to be bequeathed in one-third portions to
three groups of individuals.2 These three shares were placed into trusts over
which Stock Yards Bank (“SYB”) was appointed executor and trustee.
Following receipt of the life estate, the Ferrills engaged in a number of
transactions that allegedly invaded and depleted the corpus of the estate.
Because the precise nature of these transactions has no bearing on the
outcome of this appeal, we do not address them here beyond noting that these
transactions occurred at various times between the late 1990s and 2011. SYB
apparently became concerned over the administration of the life estate as early
as 1998 and subsequently sought semi-regular accountings from the Ferrills,
2 Willena Ferrill passed away during the pendency of this matter on September
14, 2021.
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with varying success. Ultimately, SYB and the remaindermen brought this
action in 2013, asserting claims of waste, fraud, conversion, and breach of
fiduciary duties against Willena and others (collectively “the Ferrills”) connected
to sales of estate property.
In 2015, SYB sought summary judgment and the parties then engaged in
extensive discovery. The Ferrills similarly sought summary judgment. By
order entered September 5, 2018, the trial court granted summary judgment in
favor of the Ferrills on counts 1, 2, 3, and 5, which included claims based upon
waste, fraud, and breach of fiduciary duty. In large part, those claims were
dismissed for failure to comply with their respective statute of limitations.
Specifically, as to waste, the trial court applied the five-year statute of
limitations to voluntary waste as applied in Fisher’s Ex’r and held that because
the claims all accrued at the time of their commission, the waste claims were
barred by the statute of limitations. Following motions to alter, amend or
vacate, the trial court subsequently entered an order vacating parts of the
September 5 order and supplementing with an amended order which varied
little from the original except in addressing a claim that had been missed and
altering some of the damage awards. The parties then partially resolved the
litigation by agreed order. This order made final and appealable the claims
granted and dismissed in the previous orders and otherwise dismissed the
remaining claims for conversion and attorney’s fees.
The parties subsequently appealed. The Court of Appeals reversed the
trial court as to any claims dismissed as untimely filed under the statute of
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limitations. Relying upon Superior Oil Corp. v. Alcorn, 242 Ky. 814, 47 S.W.2d
973 (1930), the Court of Appeals held that the statute of limitations on the
various claims brought by SYB did not begin to run until Willena’s death in
2021. Accordingly, such claims were timely brought and their dismissal was
error.3
The Ferrills moved for discretionary review pursuant to CR4 76.20,5
which this Court granted.
II. STANDARD OF REVIEW
Upon review of a trial court’s grant of a motion for summary judgment,
this Court must ask,
whether the record, when examined in its entirety, shows there is
no genuine issue as to any material fact and the moving party is
entitled to a judgment as a matter of law. The trial judge must
view the evidence in a light most favorable to the nonmoving party,
resolving all doubts in its favor. Because summary judgment does
not require findings of fact but only an examination of the record
to determine whether material issues of fact exist, we generally
review the grant of summary judgment without deference to either
the trial court's assessment of the record or its legal conclusions.
Hammons v. Hammons, 327 S.W.3d 444, 448 (Ky. 2010) (internal citations and
quotation marks omitted). Here, because the question presented is purely one
of law, we need not defer to the trial court and our review of the issue is de
novo. Seeger v. Lanham, 542 S.W.3d 286, 296 (Ky. 2018).
3 The Court of Appeals did not address the quandary of how the trial court was
to dispose of the claims when its order was entered in 2019, two years prior to
Willena’s death.
4 Kentucky Rules of Civil Procedure.
5 The provisions of CR 76.20 are now contained in Rule of Appellate Procedure
(RAP) 44.
4
III. ANALYSIS
The primary issue presented by this matter is when the statute of
limitations began on the claims brought by SYB. Key to resolving this question
is an analysis of the concept of “waste” as it exists within Kentucky law.
Black’s Law Dictionary defines “waste” as “[p]ermanent harm to real property
committed by a tenant (for life or for years) to the prejudice of the heir, the
reversioner, or the remainderman.” Waste, Black’s Law Dictionary (11th ed.
2019). Traditionally, Kentucky case law has recognized two classes of waste:
voluntary and permissive.
‘Voluntary waste’ consists of the willful destruction or carrying
away of something that is attached to the freehold, as for example
trees or stone, or coal or other mineral substances; while
‘permissive waste’ is the failure to take reasonable care of the
premises by neglecting for example to keep the buildings and
fencing in such a state of repair as would be considered reasonably
sufficient under the circumstances.
Fisher’s Ex’r, 202 S.W. at 496. Although this distinction has sometimes been
questioned,6 no opinion of this Court has ever collapsed the two classes into
one.
Waste by a tenant for life or years is addressed in our statutes as follows:
If any tenant for life or years commits waste during his estate or
term, of anything belonging to the tenement so held, without
special written permission to do so, he shall be subject to an action
6Springfield v. Springfield, No. 2021-CA-0358-MR, 2022 WL 16841998, at *4
(Ky. App. Nov. 10, 2022) (“[W]e question whether there remains a basis to distinguish
between the legal remedies afforded for voluntary waste under KRS 381.350 and the
equitable remedies afforded for permissive waste[]”).
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of waste, shall lose the thing wasted, and pay treble the amount at
which the waste is assessed.
KRS 381.350 (emphasis added). This statute has been in existence
substantially since 1798 but has its roots in the English Statute of Gloucester
enacted in 1278. The 1798 enactment not only expanded “waste” to include
waste committed by holders of a life estate, but also provided for treble
damages and forfeiture of “the thing he hath wasted.” Salyer’s Guardian v.
Keeton, 214 Ky. 643, 283 S.W. 1015, 1018 (1926); Alva A. Hollon, Meridith v.
Ingram: A Failure to Shed the Shackles of Stare Decisis, 62 Ky. L. J. 856, 857
(1974). The similarities between the Statute of Gloucester and the language of
our own statute—present and past—has led the courts to conclude that our
waste statute is to be construed consistently with its English forebear. Keeton,
283 S.W. at 1018. Although construction of such a longstanding statute has
been by no means consistent, see Hollon, supra, at 857-58, Kentucky cases
have adopted the reasoning of English courts and held that our waste statute
referred solely to an action for voluntary waste. See, e.g., Collins v. Security
Trust Co., 206 Ky. 30, 266 S.W. 910 (1924) (“[i]t is thoroughly established that
our Statutes on the subject of waste relate only to voluntary waste, and that in
enacting them the Legislature conferred upon courts of equity exclusive
jurisdiction of all cases involving permissive waste[]”); Fisher’s Ex’r, 202 S.W. at
496 (“[t]he right to maintain the statutory action . . . applies only to voluntary
waste”); Smith v. Mattingly, 96 Ky. 228, 28 S.W. 503 (1894) (“[t]here is an
obvious and well–recognized distinction between voluntary waste . . . and
permissive waste . . . and that the statute quoted was intended to authorize an
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action for voluntary waste only, not for permissive waste, is made by the
language used too clear for discussion[]”).
The effect of this distinction, that an action for voluntary waste lay in law
while an action for permissive waste lay in equity, led to a recognition that the
cause of action accrued, and the statute of limitations began to run, at
different times for the respective class of waste. The statute of limitations for
permissive waste does not begin to run until the death of the life tenant. See
Meredith v. Ingram, 495 S.W.2d 171, 172 (Ky. 1973) (holding “[the
remainderman’s] cause of action [for permissive waste] does not accrue, for
limitation purposes, until the death of the life tenant[]”) (citing Prescott v .
Grimes, 143 Ky. 191, 136 S.W. 206 (1911); Collins, 266 S.W. 910)). By
contrast, the limitation period on an action for voluntary waste begins “from
the time when the voluntary waste complained of was committed.” Fisher’s
Ex’r, 202 S.W. at 496. Further, the limitation period for voluntary waste has
been determined to be five years as prescribed in Ky. Stat. § 2515, the
predecessor to our current KRS 413.120. Id.
This jurisprudence underlies the issues presented by SYB and the
Ferrills. To resolve this matter, we are faced with two options: affirm our
longstanding distinction between voluntary and permissive waste or overrule
the decisions of our predecessor courts and collapse the two categories into
simply “waste.”
Ultimately, SYB is correct that the resolution is most readily found in the
language of the statute itself. Crucially, KRS 381.350 applies to any tenant
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who “commits waste during his estate”. (Emphasis added). “Commit” denotes
a purposeful action and, as Merriam-Webster indicates, it can be defined as “to
carry into action deliberately.” Commit, Merriam-Webster Dictionary Online,
https://www.merriam-webster.com/dictionary/commit. Similarly, the 1828
edition of Webster’s Dictionary defined “commit” in relevant part as “to do; to
effect or perpetrate[.]” Commit, Webster’s Dictionary 1828,
https://webstersdictionary1828.com/Dictionary/Commit. Our predecessor
court observed “an obvious and well–recognized distinction between voluntary
waste, which consists in the commission of some destructive act, and
permissive waste, consisting in omission by a tenant for life or years to keep the
land and tenements in proper repair[.]” Smith, 28 S.W. at 503 (emphasis
added). Thus, the plain language of the statute bears out the assertion in
Smith that the predecessor statute, containing largely similar language, was
meant to apply to voluntary waste alone “by [] language [] too clear for
discussion.” Id.
This conclusion is further supported by the analysis of the Court of
Appeals of Ohio in Reams v. Henney, 97 N.E.2d 37 (Ohio Ct. App. 1950). The
Ohio court was called upon to determine the proper statute of limitations for
permissive waste. The court addressed Ohio’s equivalent to KRS 381.350
which stated,
A tenant for life in real property, who commits or suffers waste
thereto, shall forfeit that part of the real property of which such
waste is committed or suffered, to the person having the immediate
estate in reversion or remainder. Such tenant also will be liable in
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damages to the person having the immediate estate in reversion or
remainder for the waste committed or suffered thereto.
Id. at 410-11. Contrasting the Ohio provision with Kentucky’s, the court wrote,
[T]he Kentucky statute authorizes an action to be brought for
voluntary waste. It does not authorize an action to be brought for
permissive waste. It is apparent that the provisions of the statute
in Ohio and the statute in Kentucky are dissimilar in that the Ohio
statute covers both voluntary and permissive waste, whereas the
Kentucky statute only covers voluntary waste.
Id. at 414. The basis for that conclusion turned on the language of the
respective statutes: “The word ‘committed’ refers to voluntary waste, and the
word ‘suffered’ refers to permissive waste.” Id. at 411. While Ohio’s statute
addressed waste “commit[ted] or suffer[ered]”, Kentucky’s statute only applied
to waste “commit[ted]”. Compare Ohio Rev. Code § 2105.20, with KRS
381.350. As recently as 2015, the Court of Appeals of Ohio has cited to Reams
and affirmed its reasoning as well as recognized the distinction between
voluntary and permissive waste.
Given the language of the statute and the fact that a number of
jurisdictions retain the two categories of waste (at least in the realm of life
estates),7 we hold Fisher’s Ex’r and such related cases continue to be accurate
statements of the law of waste as it exists in Kentucky. Accordingly, KRS
381.350 continues to apply only to claims of voluntary waste.
7 See, e.g., Estate of Johnson v. Director, Division of Taxation, No. 010286-2015,
2018 WL 3018883, at *5 (N.J. Tax Ct. June. 15, 2018) (“New Jersey Courts have
recognized two main varieties of waste, voluntary and permissive[]”); Kennedy v.
Meech, 961 N.E.2d 164 (Mass. App. Ct. 2012) (Noting, “the line between voluntary
and permissive waste is often not an easy one to draw”); Wells Fargo Bank Minn., N.A.
v. Diamond Point Plaza, L.P., 908 A.2d 684 (Md. Ct. Spec. App. 2006) (“There are
principally two different types of waste: voluntary and permissive waste[]”).
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We further re-affirm that the five-year statute of limitations for voluntary
waste claims begins when the waste is committed.8 Although we acknowledge
that the reasoning in Fisher’s Ex’r for beginning the limitations period upon
commission was scant at best, compelling reasons exist to adhere to that
holding. Aside from the doctrine of stare decisis—“the means by which we
ensure that the law will not merely change erratically, but will develop in a
principled and intelligible fashion[]”9—placing the accrual point at the death of
the life tenant would render superfluous one provision of KRS 381.350: that
the life tenant “shall lose the thing wasted.” By this, the statute directs that in
instances of voluntary waste the life estate, or a portion of it, shall be forfeited
by the tenant to the reversioner. Salyer’s Guardian, 283 S.W. at 1018. Should
an action for voluntary waste accrue only at the death of the life tenant, no
need would exist for this remedy as the estate would already have passed to
the remaindermen, thus rendering a portion of the statute unnecessary
surplusage.
Further, practical considerations militate against beginning the
limitations period at the death of the life tenant. Primarily, this Court is
concerned that the treble damages of KRS 381.350 would incentivize
remaindermen to sit on their rights as the corpus of the estate is despoiled so
8 We need not address whether the statute of limitations would be tolled
pending discovery of the waste by the remaindermen. In each of the counts dismissed
by the trial court, dismissal would have been appropriate either from the date of
occurrence or from the date of discovery.
9 Vasquez v. Hillery, 474 U.S. 254, 265 (1986).
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that they may later realize a three-fold recovery. Given the present state of our
jurisprudence on permissive waste, which SYB asks us to apply to voluntary
waste claims, malfeasance committed by the life tenant against the estate at
any point would be actionable upon his or her death, with treble damages
being the reward.10 Finally, we note that our approach to permissive waste is
similarly not universally followed,11 and our present rule is less harsh than
that articulated in Reams by the Ohio Supreme Court which limits actions for
both voluntary and permissive waste to events occurring up to four years prior
to the action. Reams, 91 N.E.2d at 416. Voluntary waste is not the result of a
life tenant merely taking a lackadaisical approach to maintaining the estate;
rather, such waste is active, deliberate intrusions committed upon the estate.
In that instance, to allow the remaindermen to sit idly by while such
malfeasance occurs seem to us to be the less desirable option.
Those matters resolved, we return to the case at hand to resolve one final
contention by SYB. It argues that regardless of our ruling on the voluntary
waste question, its complaint never explicitly asserted a claim for voluntary
waste and can thus reasonably be construed as an action for either voluntary
or permissive waste. This argument is without merit. SYB, in its First
Amended Complaint avers that the Ferrills’ conduct “constitutes waste for
which the Plaintiff is entitled to treble damages . . . pursuant to KRS 381.350.
10 Deliberate destruction of the estate occurring decades prior to the running of
the statute of limitations could potentially become the subject of litigation.
11 See Hollon, supra, at 864-65
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(Emphasis added). The waste claim was clearly pled pursuant to the statute,
and the law of Kentucky for over 100 years has been that KRS 381.350 applies
only to claims for voluntary waste. Accordingly, the trial court was correct that
SYB stated claims for voluntary waste.
As to the fraud and breach of fiduciary duty claims, also dismissed by
the trial court pursuant to the statute of limitations, our law is clear that those
claims were time-barred. Fraud claims accrue within five years of the
discovery of the fraud, with a ten-year limit on discovery from the time the
fraud was committed. KRS 413.130. The parties at the trial level agreed as to
the statute of limitations for breach of fiduciary duty, but SYB now argues
such claims should not accrue until the termination of the life estate.
Nonetheless, an action for breach of fiduciary duty has been held to accrue
upon the commission of the breach. Middleton v. Sampey, 522 S.W.3d 875,
878-79 (Ky. App. 2017). We see little justification to carve out an exception for
fraud or breach of fiduciary duty committed as to a life estate, particularly in
light of our previous discussion of voluntary waste. Accordingly, those claims
were properly dismissed.
IV. CONCLUSION
For the foregoing reasons, the holding of the Court of Appeals is reversed
in part and affirmed in part. To be clear, we affirm in full the Nelson Circuit
Court’s Order granting summary judgment in favor of the Ferrills, as modified
in its December 14, 2018 Order as well as all other issues determined by the
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trial court and do not disturb any issues resolved by the parties’ March 4, 2019
Agreed Order.
All sitting. All concur.
COUNSEL FOR APPELLANTS:
Matthew Creighton Hess
Bell Hess & Van Zant P.L.C.
COUNSEL FOR APPELLEES:
David Brandeis Tachau
Tachau Meek P.L.C.
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