Cut-N-Shoot, L.L.C. v. Bingham Greenebaum Doll, L.L.P. ( 2021 )

RENDERED: JUNE 11, 2021; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2019-CA-1735-MR
CUT-N-SHOOT, L.L.C.; MEREDITH
L. LAWRENCE, P.S.C.; AND
MEREDITH L. LAWRENCE APPELLANTS
APPEAL FROM GALLATIN CIRCUIT COURT
v. HONORABLE JAMES R. SCHRAND, II, JUDGE
ACTION NO. 19-CI-00083
BINGHAM GREENEBAUM DOLL,
L.L.P.; BGD HOLDINGS, L.L.C.;
BINGHAM MCHALE, L.L.P.; AND
JAMES RICHARD KIEFER APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; COMBS AND JONES, JUDGES.
JONES, JUDGE: This appeal arises from a series of related litigation before the
Kenton and Gallatin Circuit Courts. In 2012, Appellees James Richard Kiefer and
his law firm, Bingham Greenbaum Doll, L.L.P. (hereinafter collectively referred to
as “Bingham”), represented Appellant Meredith L. Lawrence in a federal criminal
case. Lawrence was convicted in 2012 and subsequently sued Bingham for legal
malpractice related to his representation. In 2014, Bingham sued Lawrence in a
separate action to foreclose on a mortgage that secured the promissory note for
Lawrence’s unpaid legal fees, and Lawrence asserted a counterclaim for legal
malpractice. In 2015, Lawrence sued Bingham for legal malpractice and asserted a
variety of related ancillary claims. In 2019, Lawrence and his business entities,
Cut-N-Shoot, L.L.C., and Meredith L. Lawrence, P.S.C. (hereinafter referred to
collectively as “Lawrence”), again brought claims against Bingham sounding in
legal malpractice. The Gallatin Circuit Court dismissed Lawrence’s claims in this
lawsuit under CR1 12.02(f) and imposed CR 11 sanctions on Lawrence for
duplicitous litigation. Following a careful review of the record and relevant case
law, we AFFIRM the Gallatin Circuit Court’s judgment.
I. STATEMENT OF THE CASE
This is the fourth case in which Lawrence2 has sued Bingham for
professional/legal malpractice in connection with Bingham’s legal representation
of Lawrence in a federal criminal case. Lawrence first retained Bingham in 2008
to represent him in federal court on tax evasion charges. Lawrence soon fell
1
Kentucky Rules of Civil Procedure.
2
Lawrence was formerly an attorney and a member of the Kentucky Bar Association. Lawrence
v. Bingham, Greenebaum, Doll, L.L.P. (Lawrence II), 567 S.W.3d 133, 135 (Ky. 2018).
-2-
behind on his legal fee payments, and the parties renegotiated their fee agreement,
resulting in Lawrence’s executing a promissory note for the unpaid legal fees. In
2012, Lawrence was indicted and convicted in federal court for willfully filing
false tax returns for 2004, 2005, and 2006 in violation of 26 U.S.C.3 § 7206(1).
Lawrence was sentenced to twenty-seven months in prison and ordered to pay
restitution to the United States Treasury. By 2017, Lawrence had exhausted all
conventional post-conviction direct and collateral attacks against his conviction,
including a 28 U.S.C. § 2255 petition to vacate, set aside, or correct sentence.
In 2013, Lawrence sued Bingham for professional/legal malpractice in
Kenton Circuit Action No. 13-CI-01620. Bingham counterclaimed for the
enforcement of the promissory note Lawrence had executed in partial payment of
his attorney fees. The circuit court granted Bingham summary judgment pursuant
to the Exoneration Rule because Lawrence had not been exonerated of his criminal
conviction. The circuit court also granted Bingham a default judgment against
Lawrence on the promissory note. Subsequently, a new trial judge took the bench
and set aside the default judgment, and Lawrence appealed the summary judgment.
Ultimately, the Kentucky Supreme Court ordered the circuit court “to reinstate the
default judgment in favor of Bingham and to enter the award, including interest
and costs, accordingly.” Bingham Greenebaum Doll, LLP v. Lawrence (Lawrence
3
United States Code.
-3-
I), 567 S.W.3d 127, 131 (Ky. 2018). Lawrence has since appealed the Kenton
Circuit Court’s refusal to address certain post-judgment motions. That appeal, No.
2019-CA-1125, is presently pending before our Court.
In 2014, Bingham filed Gallatin Circuit Action No. 14-CI-00055
against Lawrence to foreclose on the mortgage which secured Lawrence’s
promissory note.4 Even though the federal litigation was still pending5 and
Lawrence had not been exonerated of his criminal conviction, Lawrence
counterclaimed for malpractice. The circuit court granted summary judgment in
Bingham’s favor and dismissed Lawrence’s counterclaim pursuant to the
Exoneration Rule. Record (R.) at 238-49. The property subject to the
aforementioned mortgage was sold, and the sale was confirmed by the circuit court
on May 30, 2018.
Lawrence appealed. Upon transfer to the Kentucky Supreme Court,
the Supreme Court held that Lawrence’s allegation that Bingham has engaged in
the unauthorized practice of law is meritless. Lawrence III, 599 S.W.3d at 824.
4
“Gallatin County was the chosen venue for this action because the mortgaged real estate was
situated in that county.” Lawrence v. Bingham Greenebaum Doll, L.L.P. (Lawrence III), 599
S.W.3d 813, 819 (Ky. 2019).
5
“Also occurring simultaneously with [Kenton Circuit Action No. 13-CI-01620 and Gallatin
Circuit Action No. 14-CI-00055] was a collateral attack on his conviction that Lawrence filed in
federal court based, in part, on a claim of ineffective assistance of counsel. The federal court
ruled against Lawrence on his ineffective-assistance-of-counsel claim and issued its final order
before the resolution of the Kenton and Gallatin cases.” Id. at 819-20.
-4-
The Kentucky Supreme Court rejected Lawrence’s argument that he was
fraudulently induced into hiring Kiefer by a misrepresentation that Kiefer was
licensed to practice in Kentucky. Id. at 824-25. Our Supreme Court also held that
because the federal court had denied his ineffective-assistance-of-counsel claim,
Lawrence was precluded from claiming that Bingham’s legal representation was
deficient. Id. at 824-25. Lawrence’s attack on the amount of attorneys’ fees owed
was likewise barred by claim preclusion. Id. at 825. However, the Kentucky
Supreme Court did reverse and remand the Gallatin Circuit Court’s summary
judgement on one issue: whether Bingham had properly accepted a security
interest in the real property Lawrence had offered to secure his unpaid legal fee.
Id. at 828-29.
Consequently, on August 21, 2020, the Gallatin Circuit Court set
aside the deed of foreclosure, finding that Bingham had taken a possessory interest
in Lawrence’s property for more than the agreed upon fee and Lawrence had not
been given a reasonable time to consult with independent counsel. Both Bingham
and Lawrence have filed appeals in this case that are currently pending before our
Court.6
6
Bingham appealed the Gallatin Circuit Court’s April 24, 2020 and August 21, 2020, orders in
Appeal No. 2020-CA-1131, and Lawrence cross-appealed on claims relating to damages and his
counterclaims in Appeal Nos. 2020-CA-1217 and 2021-CA-0320. These appeals have since
been consolidated at the agreement of the parties.
-5-
In October 2015, Lawrence filed Action No. 15-CI-00113 in Gallatin
Circuit Court against Bingham with a sole cause of action – professional
negligence in Bingham’s defense of his criminal charges. Lawrence II,7 567
S.W.3d at 136. Lawrence filed this third legal malpractice claim against Bingham
with a litany of ancillary claims: “professional negligence, gross negligence,
breach of fiduciary duty, breach of contract both express and implied, breach of
professional failure to observe the rules and order of the court and were
intentionally reckless and wanton with the representation of the defendants,
including but not limited to the [sic] violating the constitutional rights of the
defendants.” Id. Lawrence also alleged, as he does in the present case, that
Bingham “willfully/intentionally breached fiduciary duties,” “the Exoneration
Doctrine is not applicable to his claims regarding fee disputes, intentional betrayal,
violations of the Supreme Court Rules, fraud, and concealment,” “his legal
malpractice claims should be allowed to proceed under the language of KRS
411.165,” and “the [Exoneration Doctrine] is inapplicable in cases of professional
negligence where the attorney fee is unreasonable, or when the attorney fails to
provide his case file to his former client.” Id. at 137. Our Supreme Court
determined that the case was properly dismissed in favor of Bingham, finding that
7
Although Gallatin Circuit Action No. 15-CI-00113 was filed after Gallatin Circuit Action No.
14-CI-00055, we have chosen to order and abbreviate the Supreme Court’s case titles according
to when the Supreme Court rendered its opinions.
-6-
all of the causes of action asserted by Lawrence “stem[med] from the same
professional negligence claim, a claim that . . . fails due to the lack of
exoneration.” Id. at 141. There are no appeals currently pending in that case.
On June 14, 2019, just six months after our Supreme Court’s decision
in Lawrence II and two months before our Supreme Court rendered Lawrence III,
Lawrence filed the Complaint in this case, Gallatin Circuit Action No. 19-CI-
00083. According to Lawrence, he filed this latest complaint to recover attorneys’
fees paid to Bingham, set aside orders and judgments in other cases allowing
Bingham’s attorney fees, obtain damages for breach of the attorney-client contract,
and set aside the foreclosure and sale of Lawrence’s business property in Gallatin
Circuit Action No. 14-CI-00055. In doing so, Lawrence asserted claims against
Bingham for legal/professional malpractice, negligence, breach of contract,
fraudulent concealment, fraud by omission, fraud by misrepresentation, deceit,
unjust enrichment, violations of the Fair Debt Collection Practices Act (FDCPA),
slander of title, conversion, and intentional infliction of emotional distress.
On July 5, 2019, Bingham moved to dismiss Lawrence’s claims
because Lawrence had not pled that he had been exonerated, rendering his claims
once again premature under the Exoneration Rule. Lawrence argued that the
parties’ legal employment relationship was invalidated by Bingham’s allegedly
unauthorized practice of the law, rendering the Exoneration Rule inapplicable. In
-7-
reply, Bingham directed the circuit court to take judicial notice of the federal
court’s October 17, 2011 order admitting Kiefer pro hac vice in USA v. Lawrence,
2:11-cr-00052-DCR-EBA, Lawrence’s criminal case.8
On July 25, 2019, Lawrence moved for an “equitable accounting” and
the creation of a “constructive trust” for the disputed attorneys’ fees and foreclosed
properties. On August 9, 2019, Bingham responded to that motion, arguing that
Lawrence’s claims were still barred by the Exoneration Rule and merely an
attempt to reargue issues already decided in Gallatin Circuit Action No. 14-CI-
00055.
In August 2019, the trial court dismissed Lawrence’s claims. The
court rejected Lawrence’s argument that Bingham had engaged in the unauthorized
practice of law and dismissed all of Lawrence’s claims as stemming from his
claims for legal malpractice.
The Plaintiffs [argue] that Kentucky procedural due
process requires denial of the CR 12.02(f) because the
motion present relies on “matters outside the pleadings,”
thus it should be treated as a Motion for Summary
Judgment and all parties should be given the opportunity
to conduct discovery. They further argue that
Kentucky’s exoneration rule is inapplicable because this
is not a professional malpractice case because Defendant
LLP’s, nor attorney Kiefer were admitted to practice law
8
At the conclusion of briefing on Bingham’s motion to dismiss, Lawrence filed a second
amendment to his complaint without moving for or being granted leave pursuant to CR 15.01,
alleging that he and his businesses were damaged “as a result of the action and inaction of
[Bingham] at and leading up to the sentencing hearing November 15, 2012” in his 2012 criminal
case. R. at 155-65.
-8-
in Kentucky and were not approved by the Plaintiffs to
provide legal representation to the Plaintiffs. Plaintiffs
allege that the Defendants were engaged in a concealed
criminal enterprise, the unauthorized practice of law, and
any contract, including an attorney-client contract is void
ab initio when the attorney is perpetuating a crime on the
client and, in this case, on the Court. Plaintiffs argue that
as there was no employment relationship between
themselves and the Defendants, the underlying case
cannot be considered a professional malpractice claim.
...
Plaintiffs’ cause of action against Defendants in this case
is one of professional negligence, a.k.a., a cause of action
for Legal Malpractice. Although there are ancillary
claims, the Court finds that all of those claims stem from
the same professional negligence claim. Under Kentucky
law, in order to proceed on a claim of legal malpractice, a
plaintiff is required to prove: (1) that there was an
agreement or attorney client relationship with the
defendant attorney; (2) that the attorney neglected his
duty to exercise the ordinary care of a reasonably
competent attorney acting in the same or similar
circumstances; and (3) that the attorney’s negligence was
the proximate cause of damage to the client. Stephens v.
Denison, 150 S.W.3d 80, 81 (Ky. App. 2004). “Before it
can be demonstrated that the attorney’s actions were the
proximate cause of his damages, the plaintiff must
establish his innocence. ‘If a criminal defendant obtains
post-conviction relief and proves by a preponderance of
the evidence that he is innocent of the underlying
offense, he has then satisfied this prerequisite and may be
able to prove his attorney’s malpractice was the
proximate cause of his injuries.’” Ray v. Stone, 952
S.W[.]2d 220 (Ky. App. 1997) (citing Peeler v. Hughes
& Luce, 868 S.W.2d 823, 832, aff’d, 909 S.W.2d 494(Tex. App. 1995). According to Stephens, when a
criminal defendant has not obtained exoneration from his
conviction and sentence through post-conviction relief,
-9-
he may not maintain a cause of action against his
criminal attorney for legal malpractice. Stephens, 150
S.W.3d at 83-4.
Although Plaintiffs claim that this action cannot be a
professional liability action in that there is no
professional relationship between the Plaintiffs and the
Defendants the Court takes judicial notice that Richard
Kiefer did indeed represent the Defendant in his federal
criminal case and was admitted to practice pro hac vice
by the federal court by Order of October 17, 2011. The
Plaintiffs in this case cannot maintain their cause of
action for legal malpractice against Defendants because
Plaintiff Lawrence is not able to show that he has
obtained exoneration from his conviction in 11-CR-52-
DCR through post-conviction relief. . . .
R. at 211-14.
Bingham then moved for CR 11 sanctions on the basis that this was
the fourth time Lawrence had asserted legal malpractice claims and the fourth time
they had been dismissed for essentially the same reason. At the same time,
Lawrence moved the circuit court to alter, amend, or vacate its order.
After briefing and hearing the motions, the circuit court entered orders
granting Bingham’s motion for sanctions and denying Lawrence’s motion to alter,
amend, or vacate. The circuit court rejected Lawrence’s arguments that the
decisions in prior Kentucky Supreme Court cases between the same parties
“preserved” the claims he had reasserted in the present case and found that this
litigation was duplicative and unnecessary in light of the decisions in related cases.
In December 2019, the circuit court granted the CR 11 sanctions and awarded
-10-
Bingham attorneys’ fees in the amount of $2,937.00 and costs in the amount of
$137.73.
This appeal followed.9
II. STANDARD OF REVIEW
Our Supreme Court provides the appellate standard of review in a
Motion to Dismiss case such as this:
A motion to dismiss for failure to state a claim upon
which relief may be granted [under CR 12.02(f)] admits
as true the material facts of the complaint. So a court
should not grant such a motion unless it appears the
pleading party would not be entitled to relief under any
set of facts which could be proved. . . . Stated another
way, the court must ask if the facts alleged in the
complaint can be proved, would the plaintiff be entitled
to relief? Since a motion to dismiss for failure to state a
claim upon which relief may be granted is a pure
question of law, a reviewing court owes no deference to a
trial court’s determination; instead, an appellate court
reviews the issue de novo.
Fox v. Grayson, 317 S.W.3d 1, 7 (Ky. 2010) (citations and internal quotation
marks omitted).
Our review of a trial court’s actions related to CR 11 sanctions
“requires a multi-standard approach, that is, a clearly erroneous standard to the trial
9
On January 19, 2021, Lawrence filed a CR 60.02 motion in Gallatin Circuit Action No. 19-CI-
00083 that was ultimately denied on April 28, 2021. While not at issue on our appeal, we note
that “CR 60.02 is not a separate avenue of appeal to be pursued in addition to other
remedies. . . .” McQueen v. Commonwealth, 948 S.W.2d 415, 416 (Ky. 1997).
-11-
court’s findings in support of sanctions, a de novo review of the legal conclusion
that a violation occurred, and an abuse of discretion standard on the type and/or
amount of sanctions imposed.” Clark Equipment Co., Inc. v. Bowman, 762 S.W.2d
417, 421 (Ky. App. 1988) (footnote and citations omitted).
III. ANALYSIS
Lawrence presents two predominant issues on appeal: (1) whether the
circuit court correctly dismissed Lawrence’s complaint; and (2) whether the circuit
court erroneously granted CR 11 sanctions against Lawrence. Because Lawrence
contends that all his claims were improperly dismissed, we will address each claim
specifically.
As a preliminary matter, we reject Lawrence’s contention that we
must review the dismissal of his Complaint under CR 56.03 rather than CR
12.02(f). Lawrence argues that because the trial court took judicial notice that
Kiefer represented Lawrence “in his federal criminal case and was admitted to
practice pro hac vice by the federal court by Order of October 17, 2011,”
Bingham’s motion to dismiss was converted to one for summary judgment. R. at
217-18. This is incorrect. Courts are permitted to take judicial notice of court
records and may do so without converting a motion to dismiss into one for
summary judgment. Rogers v. Commonwealth, 366 S.W.3d 446, 451 (Ky. 2012)
(“[C]ourt records . . . may now be resorted to for judicial notice[.]”); see, e.g.,
-12-
Polley v. Allen, 132 S.W.3d 223, 226 (Ky. App. 2004) (“A court may properly take
judicial notice of public records and government documents, including public
records and government documents available from reliable sources on the
internet.”); Buck v. Thomas M. Cooley L. Sch., 597 F.3d 812, 816 (6th Cir. 2010)
(“[A] court may take judicial notice of other court proceedings without converting
the motion into one for summary judgment.”). Accordingly, Lawrence’s complaint
was appropriately evaluated pursuant to CR 12.02(f).
We now turn to the substance of Lawrence’s appeal. First, we address
Lawrence’s claims of deceit, fraudulent concealment, unjust enrichment, fraud by
misrepresentation and intentional infliction of emotional distress,10 which fall
under Lawrence’s general allegations that Bingham engaged in the unauthorized
practice of law. According to Lawrence, Bingham “fraudulently concealed [that]
attorney Kiefer was not licensed or admitted to practice law in Kentucky pro hac
vice [and] did not seasonably apply for admission, but had engaged in an
intentional and illegal unauthorized practice of law, a crime in Kentucky,
nullifying the attorney client contract, fee agreement, right to fees, orders and
judgments otherwise void ab initio.” R. at 5.
10
Lawrence derives his intentional infliction of emotional distress claim from the “intentional[,]
. . . reckless[,] . . . outrageous[,] . . . [and] intolerable” “misconduct, misfeasance,
misinformation and fraudulent affirmative actions of [Bingham].” R. at 10.
-13-
Our Supreme Court has already rejected this contention on its merits
in Lawrence III:
Kiefer was admitted to practice law in Indiana and sought
and obtained pro hac vice admission to represent
Lawrence in the U.S. District Court for the Eastern
District of Kentucky. Lawrence argues, however, that
regardless of those facts, Kiefer represented a Kentuckian
and appeared in federal court within the geographical
boundaries of the Commonwealth of Kentucky, so Kiefer
should have sought admission to the Kentucky bar.
Essentially, Lawrence is arguing that an attorney, duly
admitted to the bar in another state and the federal bar in
which he is practicing, cannot practice law in the state
where that federal court is located without admission to
the bar of that state, as well. We reject that contention.
Lawrence III, 599 S.W.3d at 820. Moreover, Lawrence III also specifically
addressed Lawrence’s disputes regarding attorney fees:
Lawrence’s claim here seeking to refute the
establishment of the amount of attorneys’ fees owed, i.e.
the enforceability of the promissory note, from his prior
suit fails because that is the same cause of action as the
cause of action in the Kenton Circuit Court suit. As we
have stated, a resolution on the merits exists via the
Kenton Circuit Court’s grant of default judgment. And it
goes without saying that identity of parties exists here
because the same two parties are involved in this
litigation as in the Kenton County litigation. Because all
the elements of claim preclusion are satisfied here,
Lawrence’s challenge on the amount of attorneys’ fees
owed, i.e. the enforceability of the promissory note, is
precluded. Any argument made by Lawrence seeking to
renege on his obligation owed per the promissory note is
barred by claim preclusion.
Id. at 825-26. We agree and therefore uphold the circuit court’s judgment.
-14-
Next, Lawrence asserts claims of negligence, legal/professional
malpractice, and breach of contract, claiming that Bingham “solicited, arranged
and agreed to provide qualified legal counsel, legal representation and professional
services to Plaintiffs jointly and individually but negligently and intentionally
failed to do so” from 2008 through 2016. R. at 6. In doing so, Lawrence alleges
that Bingham “invented what they told the federal judge was their ‘unique
procedure’ that they elected to supplant the Federal Rules of Criminal Procedure
16, stumble[ed] their way into having their client indicted and convicted of a
federal felony,” and allowed “the client’s exculpatory evidence [to be] precluded
by the trial court.” R. at 5. Lawrence avers that “the general guilty verdict was
entered by a jury that never heard the exonerating evidence.” Id.
These claims are the same allegations already rejected as premature
by the Kentucky Supreme Court in Lawrence II, 567 S.W.3d 133. “[M]alpractice
by any other name still constitutes malpractice . . . . Misconduct may consist either
of negligence or of the breach of the contract of employment. It makes no
difference whether the professional misconduct is found in tort or contract, it still
constitutes malpractice.” Omlin v. Kaufman & Cumberland Co., L.P.A., 8 F.
App’x 477, 479 (6th Cir. 2001) (quoting Muir v. Hadler Real Estate Mgmt. Co., 4
Ohio App. 3d 89, 446 N.E.2d 820, 822 (Ohio Ct. App. 1982)); see also
-15-
Saalwaechter v. Carroll, 525 S.W.3d 100 (Ky. App. 2017). In Lawrence II, our
Supreme Court adopted the Exoneration Rule in Kentucky law:
[T]o survive a motion to dismiss for failure to state a
claim in a professional malpractice case against a
criminal defense attorney, the convicted client must plead
in his complaint that he has been exonerated of the
underlying criminal conviction. He or she need not
prove actual innocence, but they also may not rely solely
upon a claim of actual innocence in the absence of an
exonerating court decision through appeal or post-
conviction order. Further, the statute of limitations on
the legal malpractice claim does not begin to run until the
post-conviction exoneration occurs.
567 S.W.3d at 141. Accordingly, our Supreme Court held that Lawrence’s claims
of legal malpractice were properly dismissed pursuant to CR 12.02(f) because he
had not been exonerated on his criminal conviction. Id. at 141. Bingham has not
alleged that he has been exonerated of his criminal charges in the present case, nor
can he, as he has exhausted all post-conviction remedies without success.
Therefore, the Exoneration Rule still applies to bar Lawrence’s claims regarding
any alleged failures of his counsel in his criminal trial.
We now turn to Lawrence’s claims of slander of title and conversion.
Lawrence alleges that Bingham “illegally foreclosed on commercial properties”
belonging to Lawrence and has sued in this case “to set aside foreclosure and sale
of [his] business commercial property. Damages are catastrophic and continuing
. . . .” R. at 4-5. These claims are already being litigated in Gallatin Circuit Action
-16-
No. 14-CI-00055. In that case, the Gallatin Circuit Court has transferred the
property back to Lawrence as a result of Lawrence III, 599 S.W.3d 813, and there
are currently three pending appeals, Appeal Nos. 2020-CA-1131, 2020-CA-1217,
and 2021-CA-0320, regarding that case before our Court. “Piecemeal litigation
and splitting of causes of actions are highly disfavored.” Turner v. C & R Asphalt,
LLC, 579 S.W.3d 194, 197 (Ky. App. 2019). These claims must be confined to
that litigation. See Arnold v. Patterson, 229 S.W.3d 923, 925 (Ky. App. 2007).
Lawrence additionally argues that the following section of Kentucky
Supreme Court’s opinion in Lawrence III preserves his numerous claims of “sale
of property defective,” “proceeding with the foreclosure sale,” “violation of public
policy,” breach of fiduciary duty, “unenforceability of the security interest
contract,” “common law principles,” and “generally other issues ‘undecided,’”
permitting him to bring them anew before our Court:
Lawrence raises a number of other arguments in his
attempt to attack the validity of the trial court’s grant of
summary judgment and proceeding with the foreclosure
and sale: 1) the order of sale and order confirming sale
of the property that were entered by a judge that later
recused should be rendered null and void because of that
recused judge’s disqualification; 2) further discovery was
warranted; 3) the sale of the property was defective for a
number of reasons; 4) the proceedings occurring in the
Kenton Circuit Court case should have stayed
proceedings in the Gallatin Circuit Court. Although we
do not reach these arguments at this time, should
Lawrence lose on remand he would not be barred from
making these same arguments in the future.
-17-
Lawrence III, 599 S.W.3d at 829 (emphasis added). In Lawrence III, the Kentucky
Supreme Court rejected all of Lawrence’s arguments except whether Bingham met
the standards of SCR11 3.130(1.8)(a) in accepting the mortgage Lawrence offered
to secure the unpaid attorney fees. Id. at 827. Our Supreme Court specifically
noted that violation of a rule of professional conduct does not support a separate
cause of action. Id. at 828. We agree with the circuit court that our Supreme Court
clearly intended that Lawrence would be permitted to raise those arguments on
appeal Gallatin Circuit Action No. 14-CI-00055 should he lose on remand in that
case, and there are in fact currently pending appeals in that case. Our Supreme
Court did not suggest that Lawrence would be able to bring the same claims
already appealed to our highest court before a new court of law.
Next, we address Lawrence’s claim of fraud by omission.
With particularity, [Lawrence] states this claim is
inclusive of but not limited to: failure to comply with
public policy, professional rules, procedural rules of the
federal district court, requirements for admission and
authority to practice law in Kentucky with KBA [pro hac
vice] admission, deceit as to the payment of the federal
[pro hac vice] fee, refusing to supply Lawrence with one
complete copy of the client file, assisting opposing
counsel in defeating a post trial [sic] rule 33 motion for
new trial, fabricating a [“]unique[”] rule of federal
procedure that precluded exonerating evidence from the
trial, tribunal and jury.
11
Kentucky Supreme Court Rules.
-18-
R. at 7.
To the extent that Lawrence references his allegations of unauthorized
practice of law, this claim has already been rejected by our Supreme Court.
Lawrence III, 599 S.W.3d at 820. Where this claim relates to Bingham’s
performance during Lawrence’s criminal trial and post-conviction motions, it is
barred by the Exoneration Rule. Insomuch as this claim relates to the amount of
fees charged for legal representation by Bingham, it is barred by claim preclusion
in Lawrence I, 567 S.W.3d at 131. Where this claim relates to Bingham’s interest
in the mortgaged property, it is already being litigated in Gallatin Circuit Action
No. 14-CI-00055 and in several related appeals and is therefore an impermissibly
split claim brought improperly before our Court.
Finally, we address Lawrence’s claims under the FDCPA in 15
U.S.C.A.12 § 1692e and f. Lawrence contends that Bingham used “false, deceptive
and/or misleading representations or means in connection with the collection of the
claimed attorney fees/note/mortgaged.” R. at 9. Lawrence alleges: (1) that
Bingham’s actions constitute false representations and “threat[s] to take action that
cannot be legally taken” under 15 U.S.C.A. § 1692e(2) and (5); and (2) that
Bingham is a “debt collector” using “unfair or unconscionable means to collect or
attempt to collect” the claimed attorney fees under 15 U.S.C.A. § 1692f. Lawrence
12
United States Annotated.
-19-
continues to argue that Bingham is liable for damages due to its representation of
him in the criminal case, and that, as a result of this allegedly deficient
representation, Bingham should not be permitted to take any collection efforts
against Lawrence for his unpaid legal fees.
The circuit court properly dismissed this claim for a number of
reasons. First, as Bingham points out, Bingham is the owner and originator of the
debt and is therefore excluded from the FDCPA. See 15 U.S.C.A § 1692a(6)
(excluding from the term “debt collector” the originator of the debt); Henson v.
Santander Consumer USA, Inc., 137 S. Ct. 1718, 1721 (2017) (holding the FDCPA
does not apply to the owner of a debt). Second, Lawrence did not bring this claim
“within one year from the date on which the violation occur[red].” 15 U.S.C.A §
1692a(6). The property at issue was sold, and the sale confirmed on May 30, 2018,
making this claim far outside the statute of limitations. Lawrence III, 599 S.W.3d
at 820.
Lawrence also argues that the circuit court violated Kentucky’s Open
Court Doctrine by granting Bingham’s motion to dismiss. The Open Court
Doctrine contained in the Kentucky Constitution, Section 14, provides, “[a]ll
courts shall be open, and every person for an injury done him in his lands, goods,
person or reputation, shall have remedy by due course of law, and right and justice
administered without sale, denial or delay.” However, at this juncture, Lawrence
-20-
has alleged that Bingham committed legal malpractice of sorts in four different
civil cases. The Open Court Doctrine does not permit plaintiffs to bring the same
claim in different clothes when the claim has already been addressed or is currently
being addressed by the courts.
Having affirmed the circuit court’s dismissal of Lawrence’s
complaint, we turn to the circuit court’s award of CR 11 sanctions. CR 11
provides:
The signature of an attorney or party constitutes a
certification by him that he has read the pleading, motion
or other paper; that to the best of his knowledge,
information, and belief formed after reasonable inquiry it
is well grounded in fact and is warranted by existing law
or a good faith argument for the extension, modification
or reversal of existing law, and that it is not interposed
for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of
litigation. . . . If a pleading, motion, or other paper is
signed in violation of this rule, the court, upon motion or
upon its own initiative, shall impose upon the person who
signed it, a represented party, or both, an appropriate
sanction, which may include an order to pay to the other
party or parties the amount of the reasonable expenses
incurred because of the filing of the pleading, motion, or
other paper, including a reasonable attorney’s fee. The
Court shall postpone ruling on any Rule 11 motions filed
in the litigation until after entry of a final judgment.
Where CR 11 sanctions are imposed, Kentucky Courts have employed
a multi-standard approach, applying (a) “a clearly erroneous standard to the trial
court’s findings in support of sanctions,” (b) “a de novo review of the legal
-21-
conclusion that a violation occurred,” and (c) “an abuse of discretion standard on
the type and/or amount of sanctions imposed.” Bowman, 762 S.W.2d at 421.
Lawrence argues that sanctions are inappropriate because his
“[c]laims of professional negligence and breach of fiduciary duty are filed here in
good faith to determine the extent of coverage of the Kentucky Exoneration Rule
specifically in regard to the ‘conviction’ vs. the ‘sentencing’ and ‘restitution.’”13
Appellant’s Brief at 23. However, Lawrence’s amended complaint did not even
attempt to “determine the extent of coverage of the Kentucky Exoneration Rule” as
claimed in his brief. Id. Moreover, our Supreme Court already considered and
rejected Lawrence’s arguments regarding Bingham’s post-trial representation and
activities when it affirmed dismissal of Gallatin Circuit Action No. 15-CI-00113
pursuant to the Exoneration Rule. In that case, Lawrence specifically argued that
the Exoneration Rule was not applicable to “intentional post-trial betrayal.”
Lawrence I, 567 S.W.3d at 137. The Kentucky Supreme Court disagreed, and all
of Lawrence’s claims in Lawrence I were dismissed pursuant to the Exoneration
Rule.
13
Here, Lawrence references his second amended complaint that he failed to properly file before
the circuit court pursuant to CR 15.01. CR 15.01 (“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 . . . .”).
-22-
Even if Lawrence’s claims are not barred by the Exoneration Rule,
they are barred by claim preclusion. Lawrence III, 599 S.W.3d at 824-25. Res
judicata, also known as claim preclusion, bars any claims brought, or that could
have been brought, in a prior action. Yeoman v. Commonwealth Health Policy Bd.,
983 S.W.2d 459, 465 (Ky. 1998). In Lawrence II, our Supreme Court found that
all of Lawrence’s ancillary claims, including intentional infliction of emotional
distress, “stem[med] from the same professional negligence claim, a claim that . . .
fails due to lack of exoneration.” Lawrence II, 567 S.W.3d at 141. Subsequently,
in Lawrence III, the Kentucky Supreme Court specifically held that the federal
court’s denial of Lawrence’s ineffective assistance of counsel claims precluded
him from relitigating issues as to Bingham’s representation of him in a criminal
case. Lawrence III, 599 S.W.3d at 824 (“Neither the federal magistrate judge nor
the federal district judge found any hint of deficient performance on Kiefer’s part.
Whether Kiefer’s performance in representing Lawrence was deficient is an issue
that has already been litigated.”).
The circuit court correctly noted that Lawrence’s claims are
“duplicative of those raised in the previous cases,” and that, for those issues that
were “preserve[d]” in previous Supreme Court cases, the proper avenue is to
address them in those cases, not through new litigation. R. at 509. Lawrence
himself concedes that he filed this claim while lawsuits addressing the underlying
-23-
matters were pending before the appellate court. We agree with the circuit court’s
determination that Lawrence is seeking to relitigate legal issues previously decided
by our courts that are either final or pending.
Accordingly, we find no abuse of discretion in the circuit court’s order
granting sanctions. The circuit court’s finding that this case was “duplicative,
unnecessary litigation” was not erroneous, and the circuit court did not abuse its
discretion on the type or amount of sanctions imposed. R. at 511. CR 11
authorizes the imposition of attorneys’ fees and costs, and the circuit court awarded
Bingham $2,937.00 in attorney fees and $137.73 in costs.
Lawrence cannot continue to bring the same lawsuit against Bingham
in different clothing without consequence simply because he does not like the
courts’ previous adjudications. “[T]he United States Supreme Court has explained
that every paper filed in court exhausts some of the court’s limited resources. . . .
[W]here a pro se litigant files repetitious and frivolous claims, a court may bar
prospective filings to prevent the deleterious effect of such filings on scarce
judicial resources.” Cardwell v. Commonwealth, 354 S.W.3d 582, 585 (Ky. App.
2011) (citing In re McDonald, 489 U.S. 180, 184, 109 S. Ct. 993, 996, 103 L. Ed.
2d 158 (1989)). We advise Lawrence to refrain from pursuing comparable claims
in future lawsuits unless he seeks to incur further, more severe sanctions.
-24-
IV. CONCLUSION
In light of the foregoing, we AFFIRM the circuit court’s judgment.
ALL CONCUR.
BRIEFS FOR APPELLANTS: BRIEF FOR APPELLEES:
Meredith L. Lawrence, pro se Aaron Vanderlaan
Warsaw, Kentucky Frank Tremper
Covington, Kentucky
B. Katy Lawrence
Warsaw Kentucky
-25-