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ESTATE OF Justin REEDER, Appellant v. ASHLAND POLICE DEPARTMENT; and Justice T. Keziah, Appellees
The Estate of Justin Reeder (“the Estate”) appeals the Boyd Circuit Court's order granting Appellee, Ashland Police Department's (“APD”), motion for summary judgment. Appellant argues: (1) the trial court improperly granted summary judgment based on the doctrine of res judicata; (2) the trial court improperly granted summary judgment because genuine issues of material fact existed; and (3) failure to timely appeal the Boyd Circuit Court's denial of its motion to intervene was excusable neglect. Finding no error, we affirm.
On October 17, 2016, APD received a missing person report on Justin Reeder. The report noted Reeder was last seen with Jacob Lane. Two days later, APD officers initiated a formal investigation after receiving reports that Reeder's body was found in an unknown field. Upon hearing this report, APD officers interviewed Reeder's parents at their home.
During the interview, Reeder's mother consented to a search of Reeder's bedroom. In its search, the officers discovered items believed to be related to drug trafficking.1 After that, the officers furthered their investigation by traveling to Reeder's residence. Upon arrival, Reeder's roommate, Justice Keziah, answered the door. Keziah invited the officers into the residence. Once inside, the officers smelled the strong odor of marijuana. Keziah admitted to having marijuana in the house and consented to the officers searching his room.
Once officers entered Keziah's room, they saw marijuana, weapons, drug paraphernalia, and a small amount of cash in plain view. After searching the room, officers discovered: (1) an AR-15 semi-automatic weapon with a full magazine of armor-piercing ammunition; (2) a 12-gauge shotgun; and (3) a five-pound bucket with numerous bags of marijuana, pipes, and other items related to drug trafficking. Upon finding these items, the officers arrested Keziah. Later in the investigation, APD officers obtained a search warrant for Reeder's home, enabling them to search the entirety of the premises. In their search, officers seized items indicative of drug trafficking, including: (1) brownies/cookies believed to contain marijuana; (2) gun parts; (3) ammunition; and (4) $123,000 in cash. A grand jury indicted Keziah for felony trafficking of marijuana and misdemeanor possession of drug paraphernalia.2
In November 2016, Tim Reeder, Justin Reeder's father, petitioned the Boyd Circuit Court to be appointed Administrator of the Estate, which the court granted. On February 13, 2017, the Estate filed a motion to intervene in Keziah's criminal case, requesting to be made a party and asserting its interest in $120,050 3 of the seized funds. It argued in the motion that the amount listed belonged to Reeder, was not involved in Keziah's criminal case, and rightfully belonged to the Estate.
On February 24, 2017, the Commonwealth of Kentucky offered a recommendation upon a guilty plea of Keziah. In this, the Commonwealth stated it would recommend a sentence of two years for the trafficking of marijuana charge and one year on the possession of drug paraphernalia charge. Further, both counts would run concurrently and be probated for two years, upon the condition that the contraband seized, including the $123,000, be forfeited to APD. That same day, Keziah pleaded guilty to the charges.
During Keziah's sentencing, Judge Hagerman 4 indicated forfeiture would not be adjudicated on that date. Also, he stated the motion to intervene was not well taken and the Estate should file a separate civil action. On May 1, 2017, Judge Hagerman entered an order denying the Estate's motion to intervene and, in a separate order, ruled the seized money be forfeited to APD. The Boyd Circuit Court, Criminal Division, did not serve the Estate with the order. Two days later, Judge Hagerman entered an amended forfeiture order. And again, the Estate was not served.
On May 4, 2017, the Estate filed a complaint in the Boyd Circuit Court, Civil Division, naming APD and Keziah defendants.5 In its complaint, the Estate alleged the court had jurisdiction to adjudicate the forfeiture issue, determining ownership of the $120,050. In December 2017, APD filed a motion for summary judgment in the civil case, arguing no issues of material fact existed because KRS 6 218A.460 vests exclusive jurisdiction to determine forfeiture issues in the court in which the forfeiture proceeding has been requested.7 Also, it argued the funds in question were properly ordered forfeited to APD under the court's May 1 and May 3, 2017, orders, which were final orders that the Estate never appealed.
On December 22, 2017, the Estate filed a motion for an extension of time to file an appeal in the Keziah criminal case, 17-CR-00029. In its motion, the Estate argued for an extension of time under CR 8 6.02, CR 73.02, and CR 77.04. Further, it argued: (1) Judge Hagerman ruled the Estate had no standing to intervene in the case; (2) no written orders reflecting said ruling were entered until two months after the hearing; and (3) the Boyd Circuit Court Clerk's Office did not serve it with either order; thus, its failure to appeal within the mandated time constituted excusable neglect. The Boyd Circuit Court, Criminal Division, denied the motion and also denied the Estate's motion to alter, amend, or vacate. The Estate appealed the denial to this Court.9 We dismissed the appeal.10
On January 23, 2018, the Boyd Circuit Court, Civil Division, granted summary judgment in the case before us today. In its judgment, the trial court ruled that under KRS 24A.460,11 “a separate [civil] action ․ is not maintainable ․ [because] the only jurisdiction for the contest of the forfeited property would have been in 17-CR-29 in the Boyd Circuit Court.” R. at 42. It further found that “[t]he remedy of the [Estate] would have been to file an appeal from the Court's Order denying the motion to intervene․ [And since] the appeal was not taken by the [Estate], in the criminal action, this action is now barred by res judicata.” Id. (internal citations omitted). The Estate filed a motion to alter, amend, or vacate the trial court's judgment, but it was denied. This appeal followed.
The Estate argues three reasons why we should rule in its favor and overturn the trial court's ruling: (1) the trial court improperly granted summary judgment based on the doctrine of res judicata; (2) the trial court improperly granted summary judgment because genuine issues of material fact existed; and (3) failure to timely appeal the Boyd Circuit Court's denial of its motion to intervene was excusable neglect. While, at its core, this case hinges on the Estate's standing—or lack thereof—we address each argument in turn.
In its judgment, the trial court ruled that the doctrine of res judicata barred the action at hand. The Estate argues res judicata does not apply here because the doctrine only applies to named parties and those in privity with the parties of the previous action. Newman v. Newman, 451 S.W.2d 417 (Ky. 1970). But what the Estate did not mention is that res judicata encompasses both claim and issue preclusion. Yeoman v. Commonwealth, Health Policy Bd., 983 S.W.2d 459, 464-65 (Ky. 1998).
While courts generally use “res judicata” to describe both claim and issue preclusion, the doctrines differ. “Claim preclusion bars a party from relitigating a previously adjudicated cause of action and entirely bars a new lawsuit on the same cause of action. Issue preclusion bars the parties from relitigating any issue actually litigated and finally decided in an earlier action.” Id. at 465 (citations omitted).
As stated above, courts use “res judicata” as a general, blanketed phrase, which encompasses both claim and issue preclusion. For the sake of jurisprudential clarity, we must parse this phrase, showing the differences between the two doctrines. Often, a court's use of the phrase “res judicata” is indicative of claim preclusion. This is most likely because until 1970, Kentucky courts only recognized the doctrine of claim preclusion. Sedley v. City of West Buechel, 461 S.W.2d 556, 559 (Ky. 1970). Therefore, “res judicata” and claim preclusion were synonymous.
But in Sedley, the Court 12 adopted the doctrine of issue preclusion, also commonly known as collateral estoppel. Id. Ten years later, it announced in Gregory v. Commonwealth that “[c]ollateral estoppel, or issue preclusion, is part of the concept of res judicata and serves to prevent parties from relitigating issues necessarily determined in a prior proceeding.” 610 S.W.2d 598, 600 (Ky. 1980) (citations omitted).
Thus, as seen above, the Supreme Court dictated “res judicata” to be a blanket phrase, meaning both claim and issue preclusion. This causes jurisprudential confusion, which plagues much of the judiciary. Since Sedley and Gregory, courts often pen this general phrase in their rulings, rather than specifically noting whether its analysis is based on claim preclusion (“res judicata”) or issue preclusion (“collateral estoppel”). To nobody's surprise, this generality muddles the proverbial water for reviewing courts, leaving us perplexed. Since we are frequently left with only the bare-bones phrase, we are obligated to undergo a vast exploration into the record and determine whether the court employed claim or issue preclusion in its ruling.
Here, we must do just that. In its judgment, the trial court found that “[the] action is now barred by res judicata․ [And] [i]t is not proper to bring a separate action in order to pursue the claims of the [Estate] as to the forfeiture property.” The parties diverge on the meaning of these statements. In its brief, the Estate argues the trial court erred because it underwent a claim preclusion analysis. In this, the Estate correctly argues res judicata/claim preclusion is an inapplicable standard.
In BTC Leasing, Inc. v. Martin, we held that a successful invocation of this doctrine required a demonstration of the following elements: “the existence of a final judgment rendered upon the merits, an identity of the subject matter, and an identity of parties.” 685 S.W.2d 191, 197 (Ky. App. 1984) (citation omitted). Citing BTC, the Estate asserts the identity of the parties to the original action—the Keziah criminal case—were APD and Justice Keziah. And since the Estate was not a party to the original action, or in privity with either named party, the trial court incorrectly applied res judicata/claim preclusion.
But APD argues “the Trial Court correctly found that res judicata, or its cousin collateral estoppel, precluded the issue from being relitigated.” Appellee's Brief, p. 12 (emphasis added). Under this reasoning, the trial court applied res judicata/collateral estoppel/issue preclusion in its judgment. And through this analysis, APD argues the trial court correctly dismissed the action. This is so because while res judicata/claim preclusion only applies to named parties in the prior action, res judicata/collateral estoppel/issue preclusion applies to any person who was not a party to the former action nor in privity with such a party who may assert res judicata against a party to that action, so as to preclude the relitigation of an issue determined in the prior action. Sedley, 461 S.W.2d at 559.
Thus, the Estate argues the trial court incorrectly applied res judicata/claim preclusion (hereafter “claim preclusion”). And APD argues the trial court correctly applied res judicata/collateral estoppel/issue preclusion (hereafter “collateral estoppel”). We agree with APD. The trial court intended to apply collateral estoppel, rather than claim preclusion. And even if it did base its judgment on the latter, it was a misstep of harmless error. Regardless of whether the trial court applied claim preclusion or collateral estoppel, the Estate's case is barred by law.
In Sedley, the Court outlined the essential elements courts must evaluate when undergoing a collateral estoppel analysis: (1) identity of issues; (2) a final decision or judgment on the merits; (3) a necessary issue with the estopped party given a full and fair opportunity to litigate; and (4) a prior losing litigant. Id.
In the case at hand, all four factors are present. First, the issue's identity was whether the seized funds should be forfeited to APD. Second, the Boyd Circuit Court, Criminal Division, issued a final decision on the issue in its orders denying the Estate's motion to intervene and forfeiting the seized funds to APD. Third, the estopped party–the Estate–was given a full and fair chance to litigate since its motion was heard, the Boyd Circuit Court, Criminal Division, denied the motion, and it had full opportunity to appeal the judgment under CR 73.02. Fourth, the Estate was a prior losing litigant because the trial court denied its motion to intervene on the forfeiture issue. Therefore, the Estate's avenue for a proper remedy would have been to appeal the trial court's order denying the motion to intervene, not file a separate civil action regarding the same issue.
Briefly, we address the Estate's remaining two arguments. The Estate's second argument asserts the trial court improperly granted summary judgment because genuine issues of material fact existed. We disagree. As stated above, the Estate had no standing to file a separate civil action with the trial court. Since the Estate had no standing, there cannot be any genuine issues of material fact to resolve.
The Estate's third, and last, argument is that its failure to timely appeal the Boyd Circuit Court's denial of its motion to intervene was excusable neglect. At the outset, we note the Estate did not argue CR 60.02 as a remedy to the Boyd Circuit Court, Criminal Division, in its motion for an extension of time to file an appeal or its subsequent motion to alter, amend, or vacate the court's order denying its motion. Thus, we shall not address that rule, even though the parties concede it could have remedied the situation.
In its motion, the Estate argued its failure to file an appeal within 30 days after judgment was because of excusable neglect under CR 6.02, CR 73.02, and CR 77.04. At this point, we pause to briefly reiterate the facts necessary to assist us in our following analysis: On February 24, 2017, the Boyd Circuit Court, Criminal Division, indicated forfeiture would not be adjudicated on that date. Further, it stated the motion to intervene was not well taken and the Estate should file a separate civil action. On May 1, 2017, the trial court denied the Estate's motion to intervene. Three days later, the Estate filed a civil action, naming APD and Keziah as defendants. On December 22, 2017, the Estate filed a motion for an extension of time to file an appeal in the Keziah criminal case. The Boyd Circuit Court, Criminal Division, denied the motion, as well as the Estate's motion to alter, amend, or vacate.
First, under CR 6.02:
When by statute or by these Rules or by a notice given thereunder or by order of court an act is required or allowed to be done at or within a specified time, the court for cause shown may, at any time in its discretion, ․ upon motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of excusable neglect; but it may not extend the time for taking any action under Rules 50.02, 52.02, 59.02, 59.04, 59.05, 60.02, 72.02, 73.02, and 74 except to the extent and under the conditions stated in them.
(Emphasis added). On May 1, 2017, the Boyd Circuit Court denied the Estate's motion to intervene in the Keziah case. At that point, the statutory clock began to run under CR 73.02. CR 6.02 plainly states that courts cannot extend the time for taking any action under 73.02 except to the extent and under the conditions stated in that rule. In our review, we shall not reverse the trial court's ruling unless it abused its discretion. Conlan v. Conlan, 293 S.W.2d 710 (Ky. 1956). Since CR 6.02 clearly provides that it cannot be used to extend the time for filing a notice of appeal under CR 73.02, we must conclude that the trial court did not abuse its discretion by denying the Estate's motion under 6.02.
Second, under CR 73.02(1)(d):
Upon a showing of excusable neglect based on a failure of a party to learn of the entry of the judgment or an order which affects the running of the time for taking an appeal, the trial court may extend the time for appeal, not exceeding 10 days from the expiration of the original time.
(Emphasis added). CR 73.02 does not require the trial court to extend the time for appeal upon a showing of excusable neglect. Under the plain meaning of the rule, if the litigant shows excusable neglect occurred, “the trial court may extend the time for appeal[.]” CR 73.02(1)(d). “May” is discretionary, rather than mandatory, language. Therefore, the trial court did not abuse its discretion by denying the Estate's motion under CR 73.02(1)(d).
Furthermore, a plain reading of the rule provides that a court can extend time for an appeal no more than “10 days from the expiration of the original time.” Id. Even if the trial court did, in its discretion, decide to extend the Estate's time to appeal, CR 73.02(1)(d) would bar such a ruling because over six months had passed since the Estate's 30-day period to appeal the judgment lapsed.
Third, CR 77.04(1) provides:
Immediately upon the entry in the trial court of a judgment, a final order, an order which affects the running of time for taking an appeal, or an order which by its terms is required to be served, the clerk shall serve a notice of the entry by mail in the manner provided in Rule 5 upon every party who is not in default for failure to appear.
By this reading, the rule requires the clerk to serve each party not in default. But the rule also states:
Failure of the trial court to require service of notice of entry of any judgment or order under this rule or the failure of the clerk to serve such notice, or the failure of a party to receive notice, shall not affect the validity of the judgment or order, and does not affect the time to appeal or relieve or authorize the court to relieve a party for failure to appeal within the time allowed[.]
CR 77.04(4). Therefore, under the rule, the Estate has no grounds to argue excusable neglect because it was not served with the Boyd Circuit Court's orders. The plain meaning of the rule clearly indicates failure of service upon a party “shall not affect the validity of the judgment or order, and does not affect the time to appeal[.]” Id. “It is the responsibility of an interested party to keep a check on the progress of his case.” Com., Dep't of Highways v. Hatcher, 386 S.W.2d 262, 263 (Ky. 1965) (citation omitted).
On the whole, one of the three rules we analyzed vests within the trial court discretion to “enlarge” or “extend” time to appeal upon a finding of excusable neglect. See CR 73.02(1)(d). But even if the rules dictated mandatory enlargement or extension upon a finding of excusable neglect, our decision in this case would not change. The Estate did not commit excusable neglect.
Here, the Boyd Circuit Court, Criminal Division, ruled from the bench that the Estate “didn't need to be intervening in the criminal case” and that “[i]f he wants to do something like that, I told him he had to file a separate civil suit[.]” While the trial court's statements were incorrect, the Estate, and its counsel, were on notice of the adverse ruling. Two months later, the trial court issued two orders consistent with its earlier remarks. And three days after the trial court entered the orders, the Estate filed a separate civil suit. The Estate argues: (1) that it was never served, thus, not given notice of the adverse judgment; (2) since it was following the Boyd Circuit Court's order to file a separate civil case, its failure to appeal the correct judgment was excusable neglect. We disagree.
Under Kentucky law, “[j]urisdiction in all forfeiture proceedings shall vest in the court where the conviction occurred regardless of the value of property subject to forfeiture.” KRS 218A.460(1). Furthermore, the statute provides that “the court shall conduct an ancillary hearing to forfeit property if requested by any party other than the defendant or Commonwealth.” KRS 218A.460(2). This is Kentucky's law governing forfeiture procedures. Licensed attorneys owe a duty to competently know the applicable law in each case they argue. Regardless of whether the trial court “instructed” or “ordered” the Estate to file a separate civil action, a reasonably competent attorney practicing in the area of asset forfeiture, should have known the proper remedy would be to appeal the adverse judgment. This was neglect, but nothing about it was excusable.
In sum, we hold: (1) the trial court properly granted summary judgment based on the doctrine of res judicata; (2) since the Estate had no standing, there were no genuine issues of material fact to resolve; and (3) the Estate's failure to appeal was not due to excusable neglect. Therefore, we affirm the judgment of the Boyd Circuit Court.
Respectfully and reluctantly, I concur with the result reached in this case but am compelled to write separately due to the legal flaws committed by the circuit court below. This is the type of case that unfortunately gives the court system a black eye.
First, the Boyd Circuit Court erred when it denied the Estate's motion to intervene to assert a claim to the funds subject to the criminal forfeiture. KRS 218A.460 clearly controls and provides that jurisdiction in all forfeiture proceedings vests in the court where the conviction occurred. Compounding this error was the circuit court's directive to the Estate and its attorney to file a separate civil proceeding to assert its claim for the funds subject to forfeiture, which the Estate promptly did. Even more troublesome is that the circuit clerk failed to serve a copy of the separate orders entered May 1, 2017, upon counsel for the Estate, denying the Estate's motion to intervene in the criminal action and granting the forfeiture to the Ashland Police Department. At minimum, as alluded to by the majority, this creates a sound basis under CR 60.02 to set aside both orders, which I firmly believe is still ripe for consideration and action by the Boyd Circuit Court.13
Second, and equally perplexing, is that the Boyd Circuit Court, albeit a different division, dismissed the civil action, which we are now affirming in part, on the premise that KRS 218A.460 prohibits such a filing on jurisdictional grounds, which the majority equates to a lack of standing by the Estate. Effectively, the Boyd Circuit Court failed to follow the statute and allow the Estate to intervene in the criminal action, directed the Estate and its attorney to file the civil action for which there is no jurisdictional relief as a matter of law, and then dismissed the case, prompting this appeal. As Justice Cooper noted in Burton v. Foster Wheeler Corp., 72 S.W.3d 925, 930 (Ky. 2002), “judges and justices are presumed to know the law and are charged with its proper application.” He further noted in Burton that litigants have the right to expect the courts to assume a share of the responsibility to see that a controversy is correctly determined. Id. (citing First Nat'l Bank of Louisville v. Progressive Cas. Ins. Co., 517 S.W.2d 226, 230 (Ky. 1974)). In this case, the Boyd Circuit Court has failed miserably.
1. The contents included baggies, a large suitcase with remnants of what was believed to be marijuana, and empty pill cases.
2. Boyd Circuit Court Case No. 17-CR-00029.
3. Tim Reeder claimed $2,950 of the seized funds were not his son's, explaining the difference in the amount requested by the Estate.
4. Judge Hagerman is the Division II Judge of the Boyd Circuit Court. He presided over Keziah's criminal case.
5. Boyd Circuit Court Case No. 17-CI-00335.
6. Kentucky Revised Statutes.
7. In this instance, that court would be the Boyd Circuit Court, Criminal Division, Case No. 17-CR-00029.
8. Kentucky Rules of Civil Procedure.
9. Court of Appeals No. 2018-CA-000323-MR.
10. On May 15, 2018, we entered an order acknowledging the Estate's notice of appeal from the Boyd Circuit Court's denial of its motion for an extension of time to file an appeal. Under CR 54.01, the order was not final and appealable. Therefore, we ordered the Estate to show cause why its appeal should not be dismissed. On July 17, 2018, we found that the Estate demonstrated insufficient cause not to dismiss the appeal and entered an order dismissing it. The Estate filed a motion to reconsider the order, but we denied the motion on September 5, 2018.
11. While the trial court quoted the correct language of the applicable statute, it cited the incorrect statute. The trial court listed KRS 24A.460, and the correct statute is KRS 218A.460.
12. Our highest court at that time, which was the Court of Appeals.
13. As noted by the majority, the Estate filed a motion late in 2017 for an extension of time to file an appeal in the criminal case. The motion was denied and immediately appealed to this Court. 2018-CA-000323-MR. This Court dismissed the appeal, not for insufficient cause on the merits, but rather per CR 54.01 and Cobb v. Carpenter, 553 S.W.2d 290, 293 (Ky. App. 1977).
COMBS, JUDGE, CONCURS. TAYLOR, JUDGE, CONCURS IN RESULT AND WRITES A SEPARATE OPINION.
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Docket No: NO. 2018-CA-000322-MR
Decided: October 18, 2019
Court: Court of Appeals of Kentucky.
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