Michelle Phillips v. Ann D. Ball ( 2021 )

RENDERED: MAY 28, 2021; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2019-CA-1299-MR
MICHELLE PHILLIPS; ANN APPELLANTS
RODGERS; AND LALLIE DAVIS
APPEAL FROM TAYLOR CIRCUIT COURT
v. HONORABLE SAMUEL TODD SPALDING, JUDGE
ACTION NO. 18-CI-00019
ANN D. BALL; EDWARD D. JONES APPELLEES
& CO., L.P.; AND W.G. BALL, JR.
AND
NO. 2019-CA-1372-MR
ANNA D. BALL CROSS-APPELLANT
CROSS-APPEAL FROM TAYLOR CIRCUIT COURT
v. HONORABLE SAMUEL TODD SPALDING, JUDGE
ACTION NO. 18-CI-00019
ANN RODGERS; EDWARD D. CROSS-APPELLEES
JONES & CO., L.P.; LALLIE DAVIS;
MICHELLE PHILLIPS; AND W.G.
BALL, JR.
OPINION
AFFIRMING
** ** ** ** **
BEFORE: COMBS, LAMBERT, AND K. THOMPSON, JUDGES.
LAMBERT, JUDGE: These appeals arise from a petition for declaration of rights
filed by Ann D. Ball1 (Mrs. Ball) related to the ownership of funds deposited in an
investment account held by Edward D. Jones & Co., LP (Edward Jones). Three of
the defendants have appealed from various orders of the Taylor Circuit Court,
including the denial of their motion for summary judgment and the final judgment
entered following a jury trial. Mrs. Ball has cross-appealed from the order denying
her request for costs. We affirm.
Mrs. Ball filed a complaint on January 12, 2018, naming Edward
Jones2 and her five children, Carrie Ball, Michelle Phillips, W.G. Ball, Jr., Lallie
Davis, and Ann Rodgers as defendants. In her complaint, Mrs. Ball sought a
reformation of agreements and/or a declaration of rights to establish that she was
the sole owner of Edward Jones Account No. 407-12316-1-9 (Account No. 3). She
explained that in January 2004, she and her husband, William Garland Ball
1
Ann D. Ball’s first name is mistakenly listed as “Anna” in both the complaint and in the notice
of cross-appeal. We shall use her correct first name when we refer to it in this opinion.
2
Early in the proceedings, Edward Jones filed a motion to compel arbitration and stay the
proceedings. In March 2018, the circuit court entered an agreed order holding this motion in
abeyance pending further litigation of Mrs. Ball’s claims, noting that she had not asserted any
affirmative claims against Edward Jones.
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(Garland), opened Edward Jones Account No. 407-08088-1-3 as joint tenants with
right of survivorship with a deposit of $50,000.00 (Account No. 1). Garland
passed away in April of 2005, and in May of that year, the assets from that account
were transferred to Edward Jones Account No. 407-11481-1-0 (Account No. 2).
This account was registered to Mrs. Ball and two of her daughters, Carrie and
Lallie, as joint tenants with right of survivorship. Mrs. Ball alleged that she did not
understand that this transfer would divest her of any of her ownership interest in
the account. She believed the transfer would permit Carrie and Lallie to have
access to information about the account to assist her with her investment decisions.
In June 2005, Mrs. Ball deposited an additional $301,500.00 into Account No. 2.
The same month, Mrs. Ball set up a systematic withdrawal ACH option to obtain
$1,080.00 per month from this account.
In July 2006, the assets from Account No. 2 were transferred to
Account No. 3, registered to Mrs. Ball and all five of her children as tenants in
common. As with Account No. 2, Mrs. Ball did not understand that any of her
ownership interest in the funds was being divested. She believed the transfer was
to permit her children to access information about the account in order to assist her
with investment decisions. In August 2006, Mrs. Ball set up an ACH option to
obtain $1,080.00 per month from Account No. 3. In October 2009, Mrs. Ball
deposited an additional $100,000.00 into this account. As of July 2017, the
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account balance totaled $642,209.82. Mrs. Ball was sole contributor of funds
deposited into the account; the children did not deposit any of their individual
funds into it. Mrs. Ball alleged that the purpose of the account was for her sole
benefit and that the account documents did not reflect the true intent of the parties
in identifying ownership. The children should not have been listed as tenants in
common as Mrs. Ball should have been listed as the full owner. Mrs. Ball was
refused access to the account by the children, which led to the filing of the action.
Based upon these allegations, Mrs. Ball alleged causes of action for
mutual mistake, unilateral mistake, and lack of consideration, and she sought
reformation of the Account No. 3 documents to confirm she was the sole owner.
She sought a declaration of rights pursuant to Kentucky Revised Statutes (KRS)
418.040 and requested that the account be held in constructive trust for her benefit.
In addition, Mrs. Ball sought a trial by jury and costs. Defendant W.G. Ball, Jr.,
(Dubby) filed an entry of appearance and stated that he believed the allegations in
the complaint were true and did not want to file any pleadings. Defendant Carrie
Ball filed a pro se answer responding to Mrs. Ball’s complaint. While she insisted
that she and her other siblings had an ownership interest in Account No. 3 pursuant
to Mrs. Ball’s wishes, Carrie stated she was voluntarily removing herself from the
Edward Jones account because she needed “some peace” in her life. The court
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entered a judgment on the pleadings against Carrie on Mrs. Ball’s motion in March
2018, ordering Carrie’s removal from the Edward Jones account.
The remaining children, Michelle, Lallie, and Ann (hereinafter, “the
Ball Children”), continued to defend against Mrs. Ball’s claims and filed an
answer. They claimed that Mrs. Ball had failed to state a claim for which relief
may be granted and affirmatively pled the defenses of equitable estoppel, statute of
limitations, and breach of contract.
In August 2018, the Ball Children filed a motion for summary
judgment seeking dismissal of Counts I, II, IV, and V of Mrs. Ball’s complaint.
They alleged that Mrs. Ball’s claims of mutual and unilateral mistake in the first
two counts were barred by the applicable ten-year statute of limitations as set forth
in KRS 413.130. As the contract at issue was entered into in June 2006, the filing
of the complaint in 2018 was untimely. They also argued that Counts IV and V
(for a declaration of rights and constructive trusts) were both derivative of the
underlying theory of the case and should be dismissed.
In response, Mrs. Ball argued that summary judgment was premature
as discovery had not been completed. She also argued that the Ball Children were
estopped from making a statute of limitations argument because fraud and mistake
claims are also governed by a statute of repose (KRS 413.130(3)), which extends
the date on which a cause of action accrues until the mistake was discovered. She
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relied upon the confidential relationship between her and her children and asserted
that she did not know about the ownership of the account until 2016, when she was
denied access to the funds. In reply, the Ball Children continued to dispute that the
action was timely filed.
In December 2018, Mrs. Ball filed a motion for summary judgment.
She argued that there was no consideration for the account registration contract to
support the Ball Children’s claim of ownership in Account No. 3 as there was no
bargained for exchange. The Ball Children did not have a fixed obligation, did not
suffer any detriment, and did not deposit any of their own money into the account.
She concluded that as a matter of law, there was no consideration because no
benefit was conferred on one party and no detriment suffered by another party.
The Ball Children disputed this argument.
In January 2019, the Ball Children moved the court to hold a bench
trial in this matter. They noted that they had sought summary judgment on two
grounds: namely, that the complaint was barred by the applicable statute of
limitations and that there was a valid contract between Edward Jones and the
parties, which defeated Mrs. Ball’s claim of lack of consideration. Because the
remaining claims for a declaration of rights and a constructive contract were
questions of equity, a jury trial was not available.
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On January 22, 2019, the court heard arguments on the parties’
motions for summary judgment. The parties presented their arguments regarding
the application of the statutes of limitation and repose as well as the consideration
question. Counsel for the Ball Children opted to continue the motion for a bench
trial as the court’s ruling on these motions might have some bearing on it.
However, counsel did state that they had reservations about allowing people in the
community to have access to information about their mother’s finances as it was
not in her best interests. The parties disagreed about whether there were factual
issues for a jury to decide.
On January 31, 2019, the court entered its findings of fact,
conclusions of law, and order on the cross-motions for summary judgment. It
noted that Mrs. Ball argued that her sole purpose of including her children on
Account No. 3 was to permit their input in the management of the account if she
could not do so and to ensure the account would equally pass to her children upon
her death. Only when she unsuccessfully sought to increase her monthly stipend
did Mrs. Ball discover that the account was not set up as she intended and that her
daughters had attempted to liquidate the account. The Ball Children, the court
went on to state, argued that Mrs. Ball had consciously added the remaining
children to Account No. 3 to treat all of her children equally, which allowed them
all to have full ownership of access to the account.
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The court then addressed the legal arguments, including whether the
statute of limitations barred Mrs. Ball’s action and if the doctrine of equitable
estoppel applied to defeat the limitations period. The court concluded that “as a
matter of law, the claim herein would be statutorily barred but for issues of
estoppel.” It then stated that “a confidential and fiduciary relationship existed
between [Mrs. Ball] and the [Ball Children], at the time the contract was made, on
which [Mrs. Ball] relied.” Although Mrs. Ball had not pled equitable estoppel in
her complaint, the court concluded that “the facts are fully stated and relied on in
the petition.” Therefore, it ruled that the statute of limitations did not begin to run
until Mrs. Ball learned of the mistake and that the Ball Children were estopped
from arguing otherwise. As to whether there was consideration to support the
contract, the court found that the contract was between Edward Jones and the Ball
family members; whether this contract included a mistake was for a jury to decide.
Finally, the court concluded that the counts related to a declaration of rights and a
constructive trust were derivative and would be questions of law for the court to
decide when the other counts had been resolved. The court denied both motions
for summary judgment and scheduled a review to assign a jury trial date, which
was later scheduled for June.
After further discovery on equitable estoppel and fraud, on April 29,
2019, the Ball Children moved the court for an order prohibiting Mrs. Ball’s claim
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of equitable estoppel and to reconsider its prior order as to the ruling on the statute
of limitations. They argued that Mrs. Ball had not specifically pled a claim for
equitable estoppel and had not moved to amend her complaint since the court heard
arguments from the parties. In addition, they argued that Mrs. Ball had failed to
offer any affirmative evidence to support her claim of equitable estoppel. They
also argued that the confidential relationship between the parties did not prevent
Mrs. Ball from discovering her mistake. Mrs. Ball opposed this motion.
On May 8, 2019, the court entered an order denying the Ball
Children’s renewed motion for summary judgment:
The Court again concludes that based upon the
confidential relationship which existed between the
parties, as evidenced by the parties’ familial status and
one of the Defendants previously being the Plaintiff’s
power of attorney, the statute does not begin to run until
actual discovery of the fraud or mistake. The Court is
persuaded by the Plaintiff’s argument that none of the
cases cited by the Defendants apply estoppel to deny a
limitations or repose defense under KRS [413.130(3)]
which speaks in terms of the elements of equitable
estoppel typically asserted as an affirmative claim. The
jury will be given an instruction regarding whether they
believe the Plaintiff had actual discovery of the fraud or
mistake more than ten years prior to the initiation of this
proceeding.
Later that month, the Ball Children filed for leave to file an amended
answer and tendered a proposed amended answer, which included a counterclaim
against Edward Jones and a cross-claim against Mrs. Ball. The counterclaim
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addressed: 1) the possibility that Mrs. Ball may be planning to introduce evidence
at the trial that Edward Jones had not created the account to her specifications or
changed the type of account without seeking her authorization; and 2) that Mrs.
Ball brought the suit for harassment purposes, which constituted abuse of process.
In the cross-claim, the Ball Children sought to allege that if the account were to be
reformed, the mistake was caused by the negligence of Edward Jones, and they
should be entitled to their interest in the account.
In addition to moving to file the amended answer, the Ball Children
moved to dismiss Mrs. Ball’s complaint for failure to state a cause of action against
them pursuant to Kentucky Rules of Civil Procedure (CR) 12.02(f) and for failing
to assert a claim against an indispensable party (Edward Jones) pursuant to CR
19.01. They noted that Mrs. Ball’s complaint did not allege a cause of action
against Edward Jones but merely sought reformation of the contract with that
entity. However, they asserted that a claim of unilateral mistake did not provide a
basis to reform a contract and that fraud, which had not been asserted here, was
necessary to prove unilateral mistake.
Mrs. Ball objected to both motions, and the court heard arguments on
May 21, 2019. By order entered May 24, 2019, the court denied both motions.
The Ball Children filed a motion in limine regarding the claim of
unilateral mistake. Such a claim, they argued, was not grounds for reformation of
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a contract and required proof of fraud. They noted that Mrs. Ball stated that her
children had done nothing wrong, and she had not alleged fraud. Based upon these
statements, the Ball Children argued that any instruction for unilateral mistake
would be improper. They also noted that Mrs. Ball stated she mistakenly sought
reformation when she actually meant rescission; she should not be permitted to
assert a new form of relief or cause of action. In her response, Mrs. Ball argued
that the Ball Children had misstated the law applicable to unilateral mistake and
that proof of fraud is not required. Rather, a contract may be rescinded based on
either fraud or mistake. The court denied this motion in a calendar order entered
June 4, 2019.
The court held a jury trial beginning on June 10, 2019. Edward Jones
account representative Larry Bowen was the first witness to testify in Mrs. Ball’s
case. While he had not set up the account at issue, he had been managing the joint
account since February of 2007. He testified that the account had never been
anything but a joint, tenancy-in-common account.
Mrs. Ball testified next. She was 83 years old at the time of the trial.
Her husband, Garland, passed away in April 2005. At the time of Garland’s death,
Mrs. Ball owned a farm, and she had a checking account of less than $10,000.00
and $50,000.00 in an Edward Jones account. She also had $100,000.00 from the
sale of part of the farm property. She and Garland had both been getting social
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security checks. Mrs. Ball testified about help her children had provided to her
over the years. She paid Ann $100.00 per week to do bookwork for her, both
before and after Garland passed away. Ann had also served as her power of
attorney, and she would take care of her financial documents that came in the mail.
Mrs. Ball signed a document to formally appoint Ann and Michelle as her powers
of attorney right after Garland’s death.
After Garland’s death, Mrs. Ball and the children received proceeds
from his $400,000.00 life insurance policy. Mrs. Ball received half of the
proceeds, and the children split the other half. She deposited her half in her
account at Citizens Bank. She discussed with her children what she should do with
the funds from the insurance proceeds and other cash assets she owned
($50,000.00 from Account No. 1 and $100,000.00 from the property sale). She
decided, after discussing this with her children and hearing presentations from
Edwards Jones advisors, to invest her funds with Edward Jones.
Mrs. Ball testified extensively about the Edward Jones accounts. She
understood the ownership of the accounts was that it was her money and that she
had put it into the original Edward Jones account she had with Garland (Account
No. 1). She thought she would be able to use the money any time she needed or
wanted it, and it would go to her five children at her death. She thought the
children understood this. Mrs. Ball wanted her children to be able to keep up with
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what was going on in the account, and she did not have any reservations about her
children knowing about her financial situation. Her daughters assisted her with the
account.
Mrs. Ball believed her son had called Edward Jones to set up Account
No. 2 after the family meeting. Account No. 2 that was set up included herself and
two of her daughters. However, she testified that she would never have set up an
account that purposely excluded any of her children. That was inconsistent with
her understanding of her meeting with her children. She had not intended to give
them any of her money during her lifetime; they would get the money at her death.
Mrs. Ball said she signed whatever documents were given to her, but she did not
believe they reflected what she had agreed to. She did not believe the daughters
would have access to any of the money in the account during her lifetime. Mrs.
Ball did not like the way Account No. 2 had been set up because she thought that if
she died, only those two children would get the money from the account. To avoid
conflict, she insisted that the signatures of all five of her children be on the
documents so they could get her money after her death. She did not intend for
them to have access to the funds while she was still alive. She did not know if the
children knew that, and they never asked her. Mrs. Ball did not impose any
obligations on her children with regard to the account. If they were available, they
could attend meetings at Edward Jones with her. But they were not under any
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obligation to do so. She merely wanted them all to have access to information
about the account.
Mrs. Ball testified that she did not understand what tenancy-in-
common meant. She thought the children’s names were on Account No. 3 because
they got the money when she died. She admitted that documents were sent out
periodically from Edward Jones; these were the types of documents she would give
to Ann to go through.
In 2016/2017, Mrs. Ball decided she wanted to increase her monthly
stipend payment to $2,500.00. She went to Edward Jones and asked them to put
this in place. Edward Jones denied this request, she testified, because “the girls
said no.” Prior to this time, she did not know that her children had the right to
deny her access to the account funds. That was the first time she became aware
that Account No. 3 had been set up in a way that was inconsistent with what she
understood the agreement to be. She thought the children understood that they
would not get the money from the account until she passed away. It was a mistake
that the documents provided that they did have an ownership interest during her
lifetime. She learned that she only owned $100,000.00 of the $600,000.00 in the
account.
On cross-examination, Mrs. Ball said she was mistaken, not that
Edward Jones had done anything wrong or that any forgery had taken place. She
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did not claim there was any misrepresentation; she signed what they told her to
sign. She thought both Account No. 2 and Account No. 3 had been set up
incorrectly. She said she received statements from Edward Jones for the last 14
years in the mail, and she acknowledged that a dividend check received in 2013
was signed by her and all of her children. She cashed the check and used the
money. Mrs. Ball continued to testify she thought it was all her money; she did not
realize that the money was for all of them. She never contacted Edward Jones to
question why mail was being sent to her with all of the children listed on it.
Regarding her relationship with her daughters, Mrs. Ball stated that
the day before the family met to disburse the Fifth Third Bank settlement related to
Garland’s business interest, she got into a disagreement with two of the daughters
related to how it would be split. She acknowledged that the daughters had worked
hard on the Fifth Third Bank lawsuit for approximately ten years; her son was not
involved in that litigation. The daughters were upset that the son (their brother)
visited the attorney’s office after the settlement proceeds were received. Mrs. Ball
told Carrie there would be repercussions because of the fit she threw in the
attorney’s office. At some point, she removed Ann as her power of attorney. Her
son was currently her power of attorney and had been since March of 2016. She
did not really know what his duties were as power of attorney. She admitted that
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she had a habit of signing documents when she did not know what they stated. She
had been doing this for her husband for years.
On redirect examination, Mrs. Ball stated that she was “pretty sure”
the children knew they did not have an ownership interest in the account based on
their meeting. As to her husband’s estate, Mrs. Ball stated that her son was the
executor of the estate when he passed away. The daughters were not named as
executors in the will. Mrs. Ball was unsure of what happened with Garland’s
estate, although it appears that half of his estate would be placed into a trust for
her, she would receive the other half of the estate, and the Fifth Third Bank
settlement was to be paid into the estate. Regarding the disbursal of the Fifth Third
Bank settlement funds, Mrs. Ball testified that when she arrived at the office, there
were two sets of checks that had been drafted. One group contained five checks
dividing the whole settlement between the children. The second group with six
checks also included a check for Mrs. Ball, and the proceeds were divided equally
between Mrs. Ball and the children. She did not like these options because it was
supposed to be her money. She wanted to distribute the money pursuant to the
terms of Garland’s will. The daughters got upset when she said this, as the will
provided that the children would not receive any funds during Mrs. Ball’s lifetime.
Mrs. Ball gave the children 25% of the Fifth Third Bank settlement proceeds to
resolve the issue. The proceeds did not go into Account No. 3.
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Mrs. Ball learned in 2016 that, after she had requested an additional
stipend from the account, the daughters through their counsel had contacted
Edward Jones seeking to liquidate the Account No. 3 and split the proceeds six
ways. She did not agree with this. She admitted that she had asked Edward Jones
to liquidate the account and give her all of the proceeds. She did not believe the
daughters had committed any fraud, but she did not know how the account was
mistakenly created in 2005. She did not know that Edward Jones had done
anything wrong. She did not know how the mistake happened.
Michelle Phillips testified next. She is Mrs. Ball’s second child. She
did not put any money in the Edward Jones accounts. She did not receive any
income from or pay any taxes on them. The dividend check that the children
endorsed and gave to Mrs. Ball was just over $100.00. Michelle and her siblings
agreed that the money was in safekeeping to take care of their mother, such as if
she had to enter a nursing home. They did not plan to use the money until Mrs.
Ball passed away. Everything had been explained to Mrs. Ball from the time the
discussions started in 2005. It was the son’s idea to put all of the children on the
account, and Mrs. Ball wanted this to happen. Michelle knew this was a joint
account; everyone, including Mrs. Ball, was there when this was discussed.
Ann Rodgers testified next. She is the youngest of the siblings. She
served in the past as Mrs. Ball’s power of attorney, and she had taken care of her
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parents’ bills. She continued to take care of her mother’s bills after her father
passed away. Mrs. Ball would look through the mail first; Ann would pay the bills
Mrs. Ball put on the table. She was paid $100.00 per week to perform this work.
She continued to do this until “all this happened.”
Ann testified about Mrs. Ball’s financial situation. Mrs. Ball received
$200,000.00 in insurance proceeds, and the siblings received $200,000.00 that they
split. There was also $100,000.00 that Mrs. Ball had from selling part of the farm.
She denied that there was a discussion of what would happen with Account No. 3
upon Mrs. Ball’s death. Her recollection was that they discussed that they would
not touch the money until Mrs. Ball passed away so that Mrs. Ball would have
something to live on. She did not agree with Mrs. Ball’s understanding of what
they agreed to at the meeting (that the money was Mrs. Ball’s during her lifetime,
and that it would be transferred to the five children equally at her death). She
thought her mother was fabricating her memory. She thought the agreement was:
Account No. 2 was set up because if something happened and Mrs. Ball had to go
in a nursing home, the money would be there to protect her. It had been set up as a
joint account with right of survivorship. Mrs. Ball insisted all of the children put
their names on the account, although not with the right of survivorship, because the
last one surviving would be the sole owner of the money. That was not how Mrs.
Ball wanted it.
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Prior to 2016, when she asked for an increase in her stipend and for an
additional $30,000.00, Mrs. Ball had never asked for money from the account. She
thought her mother lied about what she needed the extra money for. Ann testified
that Mrs. Ball had spent too much money on QVC and HSN in the past. Mrs. Ball
had just received a check for $82,000.00; she wanted Mrs. Ball to ask Ann for the
extra money and tell her why she needed it without lying about it. When Larry
Bowen called her and told her that her mother and her brother were in the office
asking for additional funds and the reason for the request, Ann said that if her
mother needed money, she could ask her. She did not have any problem giving her
mother money and that Mrs. Ball had denied needing any extra money when Ann
had previously asked her. She discussed threats from her brother and her uncle
(Mrs. Ball’s brother) about Mrs. Ball’s access to the account and funds. Ann
related her distrust of her uncle because of bad financial experiences between her
father and her uncle in the past, including unpaid loans and a lawsuit. Mrs. Ball
told them there would be repercussions for the way the sisters treated their brother.
Bill Durham testified next. He is Mrs. Ball’s brother. Mrs. Ball told
him that the account was her money and that the funds were to go to the children
when she passed away. He did not recall making any threats to the family
members. He did want everyone to talk and resolve the situation. He did not have
any personal knowledge of how the accounts were set up.
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Dubby Ball testified next. He testified that Account No. 3 was his
mother’s property and that he and his siblings would split the account when she
died; that was what they all understood. He believed he had an interest in the
account when his mother passed away, but not until then. He did not read the
Edward Jones account statements he received in the mail.
Mrs. Ball closed her case after this witness. The Ball Children moved
for directed verdicts on the claims for mutual and unilateral mistake. As to mutual
mistake, the Ball Children argued that there was no evidence that Carrie or Lallie
were mistaken regarding the account agreement. As to the unilateral mistake
claim, they argued that no reasonable juror could find that Mrs. Ball had acted with
due diligence or that rescission of the contract would not seriously prejudice them.
The court denied both motions, ruling that there was enough evidence in a light
most favorable to Mrs. Ball to permit the jury to decide the factual disputes.
For their case, the Ball Children called Lallie Davis as the first
witness. She believed she had a 1/6th interest in Account No. 3. She had owned a
1/3rd interest in Account No. 2 with her mother and her sister, Carrie. Account
No. 2 had just over $300,000.00 when it was closed and moved to Account No. 3.
She did not believe that Mrs. Ball thought she (Lallie) did not own a part of the
account. She did not believe that Edward Jones had set up the account in a way
that Mrs. Ball did not want and that Mrs. Ball was not mistaken as to how the
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account was set up. On cross-examination, Lallie admitted that she never put any
of her own money into, or paid any taxes on, any of the accounts. The one
dividend check received from Edward Jones was turned over to their mother.
Nathan Rodgers testified next. He is Ann’s son and Mrs. Ball’s
grandson, and he had a past business relationship with his Uncle Dubby. They
worked with equipment and in construction. This stopped in March 2016, when
Dubby said he could no longer take the equipment to a family member’s house for
free. Dubby also indicated he was unhappy with his sisters and would “get the last
laugh” in relation to the Fifth Third bank settlement. Nathan did not have any
knowledge of the setting up of the Edward Jones accounts.
The Ball Children also presented testimony from Carrie, Dubby, and
Ann, as well as from Craig Cox, who had represented Garland and discussed estate
planning with him.
At the close of the Ball Children’s case, Mrs. Ball moved for a
directed verdict on her claim of lack of consideration for the contract. The court
denied this motion, ruling that love and affection can be lawful consideration. The
Ball Children moved for directed verdicts on the same grounds they had earlier,
including lack of due diligence and that Mrs. Ball had sufficient time to discover
her mistake. The court again denied the motions.
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The parties and court then addressed jury instructions. Mrs. Ball
argued that the jury should be instructed on consideration and that the question as
to whether the Ball Children would suffer serious prejudice if the Edward Jones
account were to be set aside was a question of law not fact. The Ball Children
argued that the jury should not be instructed on the unilateral mistake claim and
that due diligence should be instructed as an element of mutual mistake. The court
ruled that consideration for a contract is a legal question, not a factual one; whether
the Ball Children would suffer serious prejudice was a question of fact for the jury;
due diligence was not an element of mutual mistake for purposes of the jury
instructions; and sufficient evidence was introduced to permit the court to instruct
the jury on unilateral mistake.
Following deliberations, the jury returned a verdict answering “Yes”
on Interrogatory No. 1, finding that Mrs. Ball “was mistaken in regard to the
ownership of the Edward Jones Account number . . . when she executed the
Account Authorization and Acknowledgement form on September 7, 2005 and that
she believed she was authorizing Edward Jones to create an account solely owned
by [her]” and that her mistake “was as to a material fact of the Edward Jones
account.” On Interrogatory No. 2, the jury answered “No” and found that the Ball
Children were not mistaken in regard to the ownership of the Edward Jones
account when they executed the account forms and did not believe they were
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authorizing the account to be solely owned by Mrs. Ball. As to Interrogatory No.
3, the jury answered “Yes” to the following:
Do you believe, by clear and convincing evidence,
each of the following with respect to the mistake claimed
by [Mrs. Ball] in regard to the Edward Jones account
about which you have heard evidence:
A. That the mistake of [Mrs. Ball] was as to a
material fact of the Edward Jones account;
AND
B. That the mistake of [Mrs. Ball] was of such
grave consequence that to enforce the Edward Jones
account agreement against her, as written, would be
unconscionable;
AND
C. That the mistake of [Mrs. Ball] occurred
notwithstanding her due diligence;
AND
D. That Carrie Ball, Michelle Phillips, W.G.
(Dubby) Ball, Jr., Lallie Davis and Ann Rodgers would
not suffer serious prejudice if the Edward Jones account
agreement was set aside, except for the loss of their
bargain.
The court entered a trial order and judgment on June 17, 2019, setting
forth the trial proceedings, its rulings, the jury’s verdict, and its judgment. The
court dismissed the claim for mutual mistake and entered a judgment for Mrs. Ball
on her unilateral mistake claim. It also ordered that Mrs. Ball would recover her
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taxable costs from the Ball Children, jointly and severally. Based upon the jury’s
verdict finding unilateral mistake on Mrs. Ball’s part sufficient to support
rescission of the Account No. 3 agreement, the court exercised its equity power
and set aside the account agreement at issue. The court granted Mrs. Ball’s request
for a declaration of rights under Count IV of her complaint and rescinded Account
No. 3. Finally, the court scheduled a hearing to determine the allocation and
division of the account.
The Ball Children filed a motion to alter, amend, or vacate pursuant to
CR 59.05 on June 26, 2019. Based on the finding that they had not done anything
wrong, the Ball Children contested the order that they must pay Mrs. Ball’s taxable
costs. In addition, they disputed the court’s denial of their motion for a bench trial.
By separate motion filed the next day, the Ball Children filed a motion for a
judgment notwithstanding the verdict (JNOV) pursuant to CR 50.02, arguing that
Mrs. Ball failed to establish the required elements of unilateral mistake as she
failed to exercise ordinary diligence when she executed the agreement, including
her failure to read it, and because they would be seriously prejudiced by its
rescission. Therefore, they asserted, the jury’s verdict was palpably and flagrantly
against the evidence. As part of their argument regarding prejudice, the Ball
Children also argued that if the court rescinded the agreement, the parties would
need to be returned to the status quo in 2005 and be entitled to any growth of the
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investment during the ensuing years. In addition, the Ball Children argued that
even if Mrs. Ball had proved all of the elements of unilateral mistake, she had not
proven fraud or misrepresentation, one of which was necessary for such a claim.
The court heard arguments from the parties on the pending motions on
July 23, 2019. The Ball Children pointed to the third element regarding due
diligence to argue that Mrs. Ball could not rely on her failure to read the account
documents. Furthermore, $342,00.00 came from the Account No. 2, owned by
Mrs. Ball, Lallie, and Carrie, and there was no cause of action in the complaint as
to this account. As to costs, Mrs. Ball cited cases stating that if the plaintiff
succeeds without an award of damages, no costs can be awarded. The court
disagreed that these cases were germane to the issue here. The court orally denied
the motion for a JNOV as the jury had the evidence before it to make the findings
it did. It granted the motion to alter, amend, or vacate related to costs. There was
no discussion of Mrs. Ball’s motion for a bench trial. The court went on to discuss
the value of a supersedeas bond; the court believed it should be half of the current
value of the account, or approximately $350,000.00. Counsel for Mrs. Ball did not
object to that amount, although counsel for the Ball Children believed it should be
for the whole amount of the account. By separate order entered that day, the court
denied the Ball Children’s motions to dismiss Mrs. Ball’s complaint and to amend
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their answer to assert a counterclaim and cross-claim. These motions had been
argued on May 21, 2019.
The court entered an order on July 26, 2019, memorializing its rulings
on the Ball Children’s motions. The court declared that Mrs. Ball was the sole
owner of the funds in Account No. 3 and that the Ball Children had no claim to
these funds. It then ordered that Edward Jones, at either Mrs. Ball’s or her
counsel’s direction, transfer $350,000.00 in that account to an account solely
owned by Mrs. Ball or transfer the funds to another brokerage firm of her
choosing, or liquidate a sufficient amount of the account holdings to pay Mrs. Ball
that amount. If the Ball Children appealed the judgment, the court ordered them to
file a surety bond in the amount of $350,000.00. The order was noted to be final
and appealable.
On August 5, 2019, the Ball Children moved the court to alter, amend,
or vacate its July 26, 2019, order related to the need to post a supersedeas bond as
the funds in question were being held by Edward Jones. Mrs. Ball objected to the
motion and sought the immediate distribution of $350,000.00 in Account No. 3.
The Ball Children also filed a petition for a writ of prohibition in this Court
seeking to prohibit the court from enforcing its July 26, 2019, order. This Court
held the petition for a writ in abeyance pending a ruling on the August 5, 2019,
motion.
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The court heard arguments from the parties on August 13, 2019, and
on August 16, 2019, it entered an order ruling on the Ball Children’s motion to
alter, amend, or vacate. It ordered the immediate distribution of $233,333.33 to
Mrs. Ball (representing “the worst case scenario” of what she was entitled to
receive) via transfer or liquidation unless the Ball Children appealed the order and
judgment. It granted the motion regarding the filing of supersedeas bond and
lowered the amount of the surety bond to $240,000.00, which equaled the amount
to be released and interest. The order was noted to be a final order. This appeal by
the Ball Children follows, and we note that they filed a supersedeas bond pursuant
to the court’s direction. In addition, Mrs. Ball filed a cross-appeal.
Before we reach the merits, we note that Mrs. Ball moved to dismiss
the Ball Children’s appeal as untimely, arguing that because the second motion to
alter, amend, or vacate only addressed the post-judgment supersedeas bond issue,
nothing triggered the tolling of their time to file a notice of appeal. Because the
notice of appeal was filed 32 days after the entry of the final judgment, she argued
that the appeal was untimely. A three-judge panel of this Court denied the motion,
and we decline to reconsider this ruling, as Mrs. Ball requested in her brief, based
upon the analysis set forth in that order.
On appeal, the Ball Children raise six arguments: 1) whether Mrs.
Ball’s complaint was barred by the statute of limitations; 2) whether the trial court
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erred in denying their motion to amend their answer and file a cross-claim; 3)
whether it erred in denying their motion for a bench trial; 4) whether it erred in
denying their motions for a directed verdict and for a JNOV on the unilateral
mistake claim; 5) whether it erred in its ruling that the entire Edward Jones account
belonged to Mrs. Ball rather than returning the parties to the status quo ante; and 6)
whether it erred in requiring them to file a supersedeas bond. In her cross-appeal,
Mrs. Ball seeks reversal of the trial court’s order denying her taxable costs. We
shall address each issue in turn.
For their first argument, the Ball Children contend that the court erred
in denying their motion for summary judgment related to whether the complaint
was barred by the applicable statute of limitations.3 Our standard of review is set
forth in Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996):
The standard of review on appeal of a summary
judgment is whether the trial court correctly found that
there were no genuine issues as to any material fact and
that the moving party was entitled to judgment as a
matter of law. Kentucky Rules of Civil Procedure (CR)
56.03. There is no requirement that the appellate court
defer to the trial court since factual findings are not at
issue. Goldsmith v. Allied Building Components, Inc.,
Ky., 833 S.W.2d 378, 381 (1992). “The record must be
viewed in a light most favorable to the party opposing the
motion for summary judgment and all doubts are to be
resolved in his favor.” Steelvest, Inc. v. Scansteel Service
3
We disagree with Mrs. Ball’s contention that the Ball Children failed to properly preserve this
issue by seeking a jury instruction as to when Mrs. Ball actually became aware of her mistake or
should have inquired further.
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Center, Inc., Ky., 807 S.W.2d 476, 480 (1991).
Summary “judgment is only proper where the movant
shows that the adverse party could not prevail under any
circumstances.” Steelvest, 807 S.W.2d at 480, citing
Paintsville Hospital Co. v. Rose, Ky., 683 S.W.2d 255(1985). Consequently, summary judgment must be
granted “only when it appears impossible for the
nonmoving party to produce evidence at trial warranting
a judgment in his favor. . .” Huddleston v. Hughes,
Ky.App., 843 S.W.2d 901, 903 (1992), citing Steelvest,
supra (citations omitted).
“Because summary judgment involves only legal questions and the existence of
any disputed material issues of fact, an appellate court need not defer to the trial
court’s decision and will review the issue de novo.” Lewis v. B&R Corp., 56
S.W.3d 432, 436 (Ky. App. 2001) (footnote omitted).
KRS 413.120(11) provides that “[a]n action for relief or damages on
the ground of fraud or mistake” must be brought within five years. However, KRS
413.130(3), a statute of repose, tolls the limitations period until the fraud or
mistake is discovered:
In an action for relief or damages for fraud or mistake,
referred to in subsection (11) of KRS 413.120, the cause
of action shall not be deemed to have accrued until the
discovery of the fraud or mistake. However, the action
shall be commenced within ten (10) years after the time
of making the contract or the perpetration of the fraud.
Mrs. Ball did not file her complaint until 2018, nearly twelve years after the
signing of the Edward Jones account agreement in July of 2006.
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The Ball Children argue that this Court should strictly apply KRS
413.130(3) due to a lack of proof of fraud or misrepresentation by them, and it
therefore should hold that Mrs. Ball had to file her complaint within ten years of
the signing of the agreement. Based on the circumstances of this case, we
disagree.
Both Mrs. Ball and the circuit court relied upon the 1924 opinion of
the former Court of Appeals in Loy v. Nelson, 201 Ky. 710, 258 S.W. 303 (1924),
which addressed estoppel with respect to the confidential relationship between a
son and his mother:
It is true that the recording of a deed constitutes
constructive notice to the public; but, in view of the
close, confidential relations existing between the mother
and son, of the fact that after the deed was made that he
informed her that it was made to her, and that he was
taking care of it at his house, and in addition thereto his
placing her in possession of the land itself and
acknowledging her title thereto, it appears that the old
lady was lulled into a false sense of security. She was
not required to examine the record or make further
inquiries, but had a right to rely on the information that
he gave her as to what the record showed, and under
these circumstances he would be estopped to plead the
running of the statute until such time as she received
notice or was put upon inquiry of the facts. 10 R. C. L.
Estoppel, § 139; C. & O. R. R. Co. v. Speakman, 114 Ky.
628, 71 S. W. 633, 24 Ky. Law Rep. 1449, 63 L. R. A.
193; Newton v. Carson, 80 Ky. 309; 25 Cyc. 1016.
....
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It is true that an estoppel to be available should be
pleaded as well as proven. and that the reply contains no
such plea, but all the facts are fully stated and relied on in
the petition, and issue joined and proof taken thereon.
Id. at 304. See also Lemaster v. Caudill, 328 S.W.2d 276 (Ky. 1959); Hernandez
v. Daniel, 471 S.W.2d 25 (Ky. 1971).
We agree with Mrs. Ball that the estoppel principles at issue are based
on the relationship between the parties, not upon whether any fraud or
misrepresentation had taken place. Here, Mrs. Ball did not have any reason to
question how Account No. 3 was set up or that it was set up in a way that was not
her intention. And, because her children were the ones who were involved in the
set up of the account, the confidential relationship that existed between them tolled
the limitations period until Mrs. Ball discovered the mistake. Therefore, we hold
that as a matter of law, the circuit court did not err in ruling that estoppel tolled the
applicable limitations period in this case based upon the confidential relationship
among the parties.
For their second argument, the Ball Children contend that the circuit
court erred when it denied their motions for a directed verdict and for a JNOV on
the unilateral mistake claim. In Taylor v. Kennedy, 700 S.W.2d 415, 416 (Ky.
App. 1985), this Court set forth the applicable standard a trial court must use in
ruling on such motions:
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In ruling on either a motion for a directed verdict
or a motion for judgment notwithstanding the verdict, a
trial court is under a duty to consider the evidence in the
strongest possible light in favor of the party opposing the
motion. Furthermore, it is required to give the opposing
party the advantage of every fair and reasonable
inference which can be drawn from the evidence. And, it
is precluded from entering either a directed verdict or
judgment n.o.v. unless there is a complete absence of
proof on a material issue in the action, or if no disputed
issue of fact exists upon which reasonable men could
differ. See Sutton v. Combs, Ky., 419 S.W.2d 775(1967).
Our standard of review, in turn, is set forth in Bierman v. Klapheke, 967 S.W.2d
16, 18-19 (Ky. 1998):
On a motion for directed verdict, the trial judge
must draw all fair and reasonable inferences from the
evidence in favor of the party opposing the motion.
When engaging in appellate review of a ruling on a
motion for directed verdict, the reviewing court must
ascribe to the evidence all reasonable inferences and
deductions which support the claim of the prevailing
party. Meyers v. Chapman Printing Co., Inc ., Ky., 840
S.W.2d 814 (1992). Once the issue is squarely presented
to the trial judge, who heard and considered the evidence,
a reviewing court cannot substitute its judgment for that
of the trial judge unless the trial judge is clearly
erroneous. Davis v. Graviss, Ky., 672 S.W.2d 928(1984).
In reviewing the sufficiency of evidence, the
appellate court must respect the opinion of the trial judge
who heard the evidence. A reviewing court is rarely in as
good a position as the trial judge who presided over the
initial trial to decide whether a jury can properly consider
the evidence presented. Generally, a trial judge cannot
enter a directed verdict unless there is a complete absence
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of proof on a material issue or if no disputed issues of
fact exist upon which reasonable minds could differ.
Where there is conflicting evidence, it is the
responsibility of the jury to determine and resolve such
conflicts, as well as matters affecting the credibility of
witnesses. Cf. Taylor v. Kennedy, Ky.App., 700 S.W.2d
415 (1985). The reviewing court, upon completion of a
consideration of the evidence, must determine whether
the jury verdict was flagrantly against the evidence so as
to indicate that it was reached as a result of passion or
prejudice. If it was not, the jury verdict should be
upheld. Cf. Lewis v. Bledsoe Surface Mining Co., [798
S.W.2d 459 (Ky. 1990)]; [NCAA v. Hornung, 754
S.W.2d 855 (Ky. 1988).]
With this standard in mind, we shall consider the Ball Children’s argument that
there was insufficient evidence to support the verdict on this claim.
In Jones v. White Sulphur Springs Farm, Inc., 605 S.W.2d 38 (Ky.
App. 1980), this Court set forth the four elements a plaintiff must prove to rescind
a contract due to a unilateral mistake. These are: 1) “the consequences of the
mistake must be so grave that the enforcement of the contract would be
unconscionable”; 2) “the mistake must relate to a material feature of the contract”;
3) “the mistaken party must have exercised ordinary diligence”; and 4) “the
rescission must be possible without serious prejudice to either party.” Id. at 42-43.
The Ball Children assert that Mrs. Ball failed to establish all but the second
element.
The Ball Children first assert that the Account No. 3 agreement was
not an unconscionable contract. “[T]he doctrine of unconscionability is . . .
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directed against one-sided, oppressive and unfairly surprising contracts, and not
against the consequences per se of uneven bargaining power or even a simple old-
fashioned bad bargain[.]” Louisville Bear Safety Service, Inc. v. South Central Bell
Tel. Co., 571 S.W.2d 438, 440 (Ky. App. 1978) (citing Wille v. Southwestern Bell
Tel. Co., 219 Kan. 755, 549 P.2d 903 (1976)). They argue that the account
agreement cannot be unfairly surprising or oppressive because Mrs. Ball created
the account, the account provided for her support, and it fulfilled her estate
planning goal that the funds in the account would belong to her children equally
upon her death.
Mrs. Ball, on the other hand, points out that the jury had been
instructed to consider whether her mistake “was of such grave consequence that to
enforce the Edward Jones account agreement against her, as written, would be
unconscionable[.]” We agree with her that it was not unreasonable or flagrantly
against the evidence that the jury found that the agreement was unconscionable
based upon the circumstances of this case, including that Mrs. Ball in effect
divested herself of 5/6th of her money in creating this account and that her children
denied her access to the funds and sought to distribute the funds to themselves via
a liquidation of the account. Mrs. Ball’s testimony was firm and consistent in her
claim that she did not intend for her children to be co-owners of the account;
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rather, she wanted them to share the funds in the account equally when she passed
away.
Next, the Ball Children contend that Mrs. Ball did not exercise
ordinary diligence due to her failure to read the contract or documents provided to
her over the years.
Under the rule recited in Fields v. Cornett, [254 Ky. 35,
70 S.W.2d 954 (1934)], on which appellant relies, the
third essential condition to afford relief from a contract
by reason of an unilateral mistake is: ‘Generally the
mistake must have occurred notwithstanding the exercise
of ordinary diligence by the party making the mistake.’
Since appellant was the party making the mistake, if any
was made, he must have exercised ordinary diligence as a
prerequisite to his right to have the settlement set aside;
and, since most of the records were in his possession and
the rest were available to him and he was dealing with
appellees at arm’s length and questioning the accuracy of
certain items, it cannot be said that he exercised ordinary
care when he failed to examine the remainder of the
records to determine the accuracy of the accounting in
respect to them.
Kane v. Hopkins, 309 Ky. 488, 494, 218 S.W.2d 37, 40 (1949).
In her brief, Mrs. Ball likens “ordinary diligence” to “ordinary care,”
and she cites to Jones v. Sharp’s Adm’r, 282 Ky. 638, 139 S.W.2d 731, 734-35
(1940), for a definition of this term:
[T]his court has long adopted a plain and satisfactory
definition of “ordinary care”, which is that it means
“such care as an ordinarily prudent person will usually
exercise under circumstances like or similar to those
presented in this case.” Owensboro City R. Co. v.
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Tucker, 148 Ky. 844, 147 S.W. 916. Also, the term
“ordinary care” is defined as being such care as one of
ordinary prudence usually exercises under given
circumstances.
What constitutes the exercise of reasonable or
“ordinary care” depends on the facts and circumstances
of each particular case, as they are developed by the
evidence. Sharp v. Layne, Ky., 117 S.W. 292.
Mrs. Ball correctly points out that the only question before the jury was her
exercise of ordinary diligence in discovering the mistake in the documents at the
time Account No. 3 was opened, not whether she exercised ordinary diligence with
respect to the account documents she received periodically over the ensuing years.
The Ball Children did not request a jury instruction as to whether Mrs. Ball should
have discovered the mistake ten years prior to the filing of her complaint related to
the application of KRS 413.130(3). Therefore, any events that happened after the
Edward Jones account documents had been executed would not be relevant to this
issue.
Based upon the facts and circumstances of this case, we agree with
Mrs. Ball that there was sufficient evidence for the jury to find that she had
exercised ordinary diligence. Specifically, the confidential relationship between
Mrs. Ball and the Ball Children supplies the necessary support for the jury’s
finding in this regard. Certainly, Mrs. Ball would have believed her children
-36-
would have conveyed her instructions related to ownership of the account to the
Edward Jones representative when it was being set up.
The last element for unilateral mistake addresses whether rescission
would seriously prejudice either party. The Ball Children contend that because
they believed they were joint owners for 15 years and at least one of the children
stated she would have handled her finances differently, they would be seriously
prejudiced. But as Mrs. Ball points out, the former Court of Appeals defined this
element in Fields v. Cornett, 254 Ky. 35, 70 S.W.2d 954, 957 (1934), as follows:
“It must be possible to give relief by way of rescission without serious prejudice to
the other party except the loss of his bargain. In other words, it must be possible to
put him in [status] quo.” (Internal quotation marks omitted.) The Ball Children
did not contribute anything to the Edward Jones account, as Mrs. Ball provided the
funding for it, and therefore had nothing to lose from it. Therefore, the Ball
Children cannot establish that they would be seriously prejudiced – or prejudiced
at all – if the account were to be rescinded.
Accordingly, we hold that the circuit court did not err in denying the
Ball Children’s motions for a directed verdict or for a JNOV on Mrs. Ball’s claim
of unilateral mistake.
For their third argument, the Ball Children argue that the circuit court
erred by reforming the Account No. 3 agreement rather than rescinding it and
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returning the parties to the status quo ante. They believe the court erred when it
declared Mrs. Ball to be the sole owner of Account No. 3 and awarded the balance
to her. Because Account No. 3 was funded by Account No. 2, which was owned
by Mrs. Ball and two of her daughters, the Ball Children argue that the court
ignored Lallie’s interest in the account. For the reasons set forth in Mrs. Ball’s
brief, we disagree with the Ball Children’s argument on this issue. First, the court
rescinded the agreement; it did not reform it. Second, the court in its equitable role
properly awarded the funds to Mrs. Ball rather than dividing it based upon the
ownership of the second account. Account No. 2 had been disavowed by the Ball
family members because it had been set up incorrectly, which is why Account No.
3 was created. It would make no rational sense to return the parties to Account No.
2. Therefore, we find no merit in this argument.
For their fourth argument, the Ball Children argue that the court erred
in denying their motion for a bench trial. As Mrs. Ball states, this motion was
premised on the court’s potential granting of the Ball Children’s motion for
summary judgment, which was denied. The court never ruled on this motion, and
the Ball Children never brought the motion before the court again for a ruling.
Therefore, we reject this argument.
For their fifth argument, the Ball Children argue that the circuit court
abused its discretion in denying the motion for leave to file an amended answer
-38-
and assert a cross-claim against Edward Jones to seek indemnity against it. They
filed their motion following what they described as an adversarial and accusatory
deposition of Edward Jones representative Larry Bowen, which resulted, they
claim, in permitting Mrs. Ball to imply that the account documents were not
created pursuant to her direction. CR 15.01 addresses the amendment of pleadings
and provides in relevant part as follows:
A party may amend his pleading once as a matter of
course at any time before a responsive pleading is served
or, if the pleading is one to which no responsive pleading
is permitted and the action has not been placed upon the
trial calendar, he may so amend it at any time within 20
days after it is served. Otherwise a party may amend his
pleading only by leave of court or by written consent of
the adverse party; and leave shall be freely given when
justice so requires.
We shall review the circuit court’s ruling for abuse of discretion. See Laneve v.
Standard Oil Co., 479 S.W.2d 6, 8 (Ky. 1972).
Mrs. Ball argues, on the other hand, that claims for indemnity and
contribution do not accrue until a payment has been made, citing Commonwealth
Department of Transportation, Bureau of Highways v. All Points Construction
Company, 566 S.W.2d 171, 173 (Ky. App. 1977) (“a tortfeasor’s claim for
contribution remains inchoate until payment is made to the injured party.”).
Because she sought rescission of the contract rather than money damages, Mrs.
Ball questioned whether the Ball Children would even have a claim for
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contribution or indemnity from Edward Jones. We agree that any claims the Ball
Children have against Edward Jones – if any – had not accrued when they filed the
motion. Therefore, we find no abuse of discretion in the circuit court’s denial of
the motion.
For their sixth and final argument, the Ball Children seek review of
the circuit court’s order requiring them to post a supersedeas bond pursuant to CR
73.04 in excess of an amount to cover the cost of an appeal and interest. Because
the court had granted Mrs. Ball equitable relief by rescinding the contract rather
than ordering them to pay money to her and because Edward Jones had been
directed to disperse the funds it secured, the Ball Children contend that the amount
of the supersedeas bond in this instance was contrary to the purpose of CR 73.04.
Mrs. Ball argues that this issue is moot because the Ball Children
posted the supersedeas bond in the amount ordered by the circuit court. They also
argue that whether the bond amount was excessive is not within the jurisdiction of
this Court. CR 73.06 addresses the method by which a party may challenge the
sufficiency of a supersedeas bond:
(1) The sufficiency of the bond or the surety may be
determined by the trial court upon motion and hearing.
(2) During an appeal, the trial court shall retain original
jurisdiction to determine all matters relating to the right
to file a supersedeas bond, the amount and sufficiency
thereof and the surety thereon.
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And in Strunk v. Lawson, 447 S.W.3d 641, 652 (Ky. App. 2013), this Court
addressed the application of this Rule and held:
As an appellate court, we lack authority to approve them,
and are limited to granting leave to file a bond in the
circumstances described in CR 73.06 or “to review the
sufficiency of supersedeas bonds already filed in a
pending appeal.” Henry Vogt Machine Company v.
Scruggs, 769 S.W.2d 766, 767 (Ky. App. 1989). From
the record provided to us, we cannot determine whether
Neal and Strunk have posted bond. If they have, the
bond set is clearly “sufficient,” because it exceeds
mightily the $2,151.27 assessed against Neal and Strunk
as costs. Whether the bond amount was excessive
appears to be beyond the scope of our authority to say.
We agree with Mrs. Ball that it is beyond the scope of our review to consider
whether the amount of the supersedeas bond was excessive.
Turning now to the cross-appeal, Mrs. Ball seeks review of the circuit
court’s decision not to award her taxable costs as the prevailing party pursuant to
KRS 453.0404 and CR 54.04.5 “While it is a general rule that the successful party
in an equitable action recovers costs, KRS 453.040(1)(b), a court of equity has a
4
KRS 453.040(1)(a) provides: “The successful party in any action shall recover his costs, unless
otherwise provided by law. If the plaintiff succeeds against part of the defendants, and not
against others, he shall recover his costs from the former, and the latter shall recover their costs
from the plaintiff.”
5
CR 54.04(1) provides: “Costs shall be allowed as of course to the prevailing party unless the
court otherwise directs; but costs against the Commonwealth, its officers and agencies shall be
imposed only to the extent permitted by law. In the event of a partial judgment or a judgment in
which neither party prevails entirely against the other, costs shall be borne as directed by the trial
court.”
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judicial discretion in settlements as to costs and its discretion will not be controlled
by this court unless the chancellor has abused his discretion.” Johnson v. Johnson,
273 S.W.2d 558, 560 (Ky. 1954). While the circuit court initially awarded Mrs.
Ball taxable costs, it vacated this award based on the Ball Children’s motion in
which they argued that the jury had not found any wrongdoing on their part, that
they had successfully defended Mrs. Ball’s claim of mutual mistake, and that no
monetary damages had been awarded. Mrs. Ball claims that none of these reasons
provides a basis to deny her these costs in light of the results she achieved with the
lawsuit.
Despite these arguments, we must agree with the Ball Children that
Mrs. Ball has not established that the circuit court abused its discretion in deciding
not to award taxable costs to her. “The test for abuse of discretion is whether the
trial judge’s decision was arbitrary, unreasonable, unfair, or unsupported by sound
legal principles.” Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999).
While perhaps one of the reasons claimed by the Ball Children would not have
convinced the circuit court to change its decision, the combination of factors
certainly could have and ultimately did in this case. We find no reason to disturb
the circuit court’s decision.
For the foregoing reasons, the judgment and orders of the Taylor
Circuit Court are affirmed.
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COMBS, JUDGE, CONCURS.
THOMPSON, K., JUDGE, DISSENTS AND FILES SEPARATE
OPINION.
THOMPSON, K., JUDGE, DISSENTING: I respectfully dissent as to
the costs issue appealed by Mrs. Ball. I would reverse and state that the trial court
abused its discretion. Mrs. Ball was the successful litigant and costs should have
been awarded to her.
BRIEFS FOR BRIEF FOR APPELLEE/CROSS-
APPELLANTS/CROSS-APPELLEES APPELLANT, ANN D. BALL:
ANN RODGERS, LALLIE DAVIS,
AND MICHELLE PHILLIPS: Joseph H. Mattingly III
John A. Elder IV
Angela M. Call Lebanon, Kentucky
Allyson S. Cave
Campbellsville, Kentucky
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