Hines v. Barnett Bank of Tampa, No. 2006-CA-000216-MR (Ky. App. 3/28/2008)
| Decision Date | 28 March 2008 |
| Docket Number | No. 2006-CA-000216-MR.,No. 2006-CA-000217-MR.,2006-CA-000216-MR.,2006-CA-000217-MR. |
| Parties | Ronald E. HINES, Appellant, v. BARNETT BANK OF TAMPA, N.A., N/K/A Bank of America; Peoples State Bank of Chaplin, Kentucky, N/K/A King Southern Bank; Warren L. Pulliam; Janice L. Pulliam; Kerry W. Pulliam; Paul A. Sims; Chaplin Insurance Agency, Inc.; and W & J Pulliam, Inc., Appellees. Warren L. Pulliam; Janice L. Pulliam; Kerry W. Pulliam; Paul A. Sims; Chaplin Insurance Agency, Inc.; and W & J Pulliam, Inc., Appellants, Barnett Bank of Tampa, N/K/A Bank of America; Peoples State Bank of Chaplin, Kentucky, N/K/A King Southern Bank; and Ronald E. Hines, Appellees. |
| Court | Kentucky Court of Appeals |
Appeal from Jefferson Circuit Court, Honorable Judith E. McDonald-Burkman, Judge, Action No. 88-CI-000812.
Ronald E. Hines, pro se, Elizabethtown, Kentucky, Briefs for Appellant, Ronald E. Hines.
Edna Jenelle Coulter, Bardstown, Kentucky, Briefs for Appellant, Warren L. Pulliam; Janice L. Pulliam; Kerry, W. Pulliam; Paul A. Sims; Chaplin, Insurance Agency, Inc.; and W & J Pulliam, Inc.
Gary A. Tabler, Louisville, Kentucky Briefs for Appellant, Warren L. Pulliam; Janice L. Pulliam; Kerry, W. Pulliam; Paul A. Sims; Chaplin, Insurance Agency, Inc.; and W & J Pulliam, Inc.
Kathy P. Holder, Amy D. Cubbage, Louisville, Kentucky, Brief for Appellee, Peoples, State Bank of Chaplin, Kentucky, N/K/A King Southern Bank.
Before: ACREE, CLAYTON and WINE, Judges.
This is the consolidated appeal of Warren L. Pulliam (Pulliam), Janice L. Pulliam, Kerry W. Pulliam, Paul A. Sims, Chaplin Insurance Agency, Inc. and W & J Pulliam, Inc. (Pulliam Appellants), and the Pulliam Appellants' former attorney, Ronald E. Hines. The appeal arises from the Pulliam Appellants' unsuccessful efforts to intervene and set aside an agreed order, entered in 1989, dismissing a lawsuit between the Appellees, Barnett Bank of Tampa, N.A., n/k/a Bank of America (Barnett Bank) and Peoples State Bank (Peoples) of Chaplin, Kentucky, the plaintiff and defendant below, respectively. Additionally, the Pulliam Appellants and Hines contest sanctions imposed against them as a result of the attempted intervention. We dismiss in part and affirm in part.
Because the Pulliam Appellants present arguments grounded in constitutional due process guarantees, we are obligated to present the relevant facts and procedure of this case in some detail.
Pulliam was once the president and principal owner of Peoples. In 1986, Pulliam agreed to indemnify Peoples for losses arising from his wrongful issuance of certified checks. He and Peoples entered into a restitution agreement to that effect, but Pulliam later brought suit in Nelson Circuit Court against Peoples and one of its directors, James King, to set aside that agreement. That litigation terminated when the parties entered into a settlement agreement in which Pulliam admitted his wrongdoing reaffirmed his obligation to indemnify Peoples for all losses and expenses, and released Peoples and King from all claims. Pulliam has attempted to resurrect that case by means of post-trial motions.
On February 1, 1988, Barnett Bank filed the underlying lawsuit against Peoples in Jefferson Circuit Court, seeking reimbursement for sums it had been induced to pay to Peoples as a result of Pulliam's misconduct. Pulliam admittedly knew of the lawsuit, in fact gave his deposition in the case, but did not attempt to intervene at that time. In 1989, Peoples and Barnett Bank settled their dispute when Peoples paid Barnett Bank the sum of $200,000 in exchange for a release of all claims. An agreed order of dismissal with prejudice was entered on October 12, 1989.
In May 1990, Peoples' subrogee, Ohio Casualty, sued Pulliam in federal district court seeking indemnity, contribution, and subrogation for amounts paid as a result of Pulliam's misdeeds while at Peoples. In July 1992, pursuant to a jury verdict, the United States District Court entered a judgment against Pulliam in the amount of $200,000.00. Pulliam did not appeal. However, he has since unsuccessfully attempted on several occasions to avoid or delay his obligation to Ohio Casualty. He filed motions to set aside the judgment pursuant to Federal Rules of Civil Procedure (FRCP) 60(b) in 1995 and 2004.
On February 11, 1992, Pulliam was convicted in the United States District Court for the Western District of Kentucky at Louisville on one count of bank fraud and three counts of aiding and abetting bank fraud. His sentences of one year for each offense were to run concurrently, though execution of the sentence was suspended and Pulliam was placed on probation for a period of five years.
On February 17, 2005,1 more than fifteen years after the underlying lawsuit had been dismissed, the Pulliam Appellants filed a motion to intervene and to set aside the Jefferson Circuit Court's 1989 order of dismissal. They claimed the settlement and agreed order of dismissal entered into between Peoples and Barnett Bank was accomplished by the perpetration of a fraud upon the court. On March 8, after considering the lengthy motions and memoranda, the trial court denied Appellants' motion.
The Pulliam Appellants, on March 21, filed a motion to alter, amend or vacate that March 8 order. The motion was argued before the trial court on June 20. Hines presented the Pulliam Appellants' factually unsupported allegations of collusion and fraud upon Peoples or the trial court, or both. Peoples' counsel responded with a recitation of Pulliam's various attempts to collaterally attack the judgments that had been entered against him. She concluded by generally requesting the trial court to keep open the possibility of awarding sanctions on a proper motion.
On July 13, the court entered an order denying the motion to vacate its previous order, holding there was "no viable basis to allow Movants to intervene in this 1988 case which came to final judgment in 1989."
A month later, on July 21, Peoples filed a motion pursuant to Kentucky Rules of Civil Procedure (CR) 11 for sanctions against Hines and the Pulliam Appellants. The very next day, Hines, on behalf of his clients and by necessary implication on his own behalf, filed an "Objection to Motion for Sanctions" because a prior obligation prohibited his attendance at the hearing.
When the trial court called the docket on July 25, counsel for Peoples represented to the trial court that she had spoken with Hines' assistant and agreed to allow Hines time to respond to the motion, and to allow Peoples time to reply to that response. Counsel for Barnett Bank was also in attendance, having filed its own CR 11 motion for sanctions that morning. That motion was served upon Hines himself, and upon the Pulliam Appellants through Hines, on July 25. The trial judge entered an order on July 26 setting the agreed-upon briefing schedule.
On August 8, Hines, again on behalf of his clients and himself, filed a response both to Peoples' and to Barnett Bank's motions for sanctions.
On August 25, the Pulliam Appellants filed their own, unrelated motion to certify as final the March 8 order denying intervention and the July 13 order denying the motion to vacate the previous order. Hines noticed that motion to be heard on August 29. Peoples' counsel and Barnett Bank's counsel appeared at the hearing, but Hines did not. Noting their desire to keep client costs to a minimum, they declined the court's offer of time to submit a response to Hines' motion. Instead, however, they presented to the trial court a copy of the definitive case on Appellants' motion, Ashland Public Library Bd. of Trustees v. Scott, 610 S.W.2d 895 (Ky. 1981).
Shortly after the hearing and with leave of court, both counsel submitted supplemental affidavits supporting their claim for CR 11 sanctions. Those affidavits reflected the time they had spent and costs expended preparing for and attending the August 29 hearing, a hearing Hines himself failed to attend. Furthermore, they set forth the supplemental argument that Hines' motion to certify the March 8 and July 13 orders also failed to meet the requirements of CR 11.
On September 2, before he could respond to these supplemental affidavits, Hines was injured in an unfortunate fall. On September 8, with Hines' apparent authority and on his behalf, attorney Gary Tabler filed a motion to continue the case for thirty days or until further orders of the Court. The next day, Hines wrote to counsel for Peoples seeking an agreed order allowing him to withdraw from representation of the Pulliam Appellants. On September 15, Peoples' counsel responded to Hines' letter. She had obtained permission from Barnett Bank's counsel to speak for them both. They had no objection to Hines' withdrawal. However, they emphasized that
it would be inappropriate for us to sign an Agreed Order regarding your withdrawal, particularly in light of the pending Motions for Sanctions that both my client and Barnett Bank intend to pursue. [emphasis supplied].
Those motions, it went without saying, were not only against the Pulliam Appellants, but against Hines himself.
Hines filed his motion to withdraw on October 3, 2005, and for an additional sixty days to allow the Pulliam Appellants time to find new counsel. That motion was to be heard on October 10. Again, when the trial court called the docket, counsel for Peoples and Barnett Bank were present. Hines failed to appear or to send a surrogate.
The court was not inclined to allow the continuance of the case for an additional sixty days. Counsel for Barnett Bank informed the court that Tabler, who had signed Hines' September 8 motion seeking a continuance, was already representing the Pulliam Appellants in the Nelson Circuit Court action. Hines' assistant had informed counsel that Tabler intended to enter an appearance in this case. The trial court granted Hines' motion for leave to withdraw on October 11, but denied the...
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