Omniflight Helicopters, Inc. v. Kennedy
| Decision Date | 26 May 1978 |
| Citation | 567 S.W.2d 123 |
| Parties | OMNIFLIGHT HELICOPTERS, INC., Appellant, v. Lyle KENNEDY, Kentucky Machinery, Inc., Ford Motor Credit Company, C & K Construction Company, Inc., Lyle Coal Company, Inc., Dock Coal Company, Inc. and Vernon Collett, Appellees. Lyle KENNEDY, Appellant, v. FORD MOTOR CREDIT COMPANY, Kentucky Machinery, Inc., Omniflight Helicopters, Inc., Vernon Collett, Lyle Coal Company, Inc., Dock Coal Company, Inc. and C & K Construction Company, Inc., Appellees. |
| Court | Kentucky Court of Appeals |
Gerald L. Greene, Pineville, for Omniflight Helicopters, Inc. in CA-1599-MR.
Joe Nagle, Middlesboro, Frank G. Dickey, Jr., Lexington, Kenneth M. Boggs, Barbourville, William A. Watson, Middlesboro, for Lyle Kennedy et al. in CA-1599-MR.
William A. Watson, Middlesboro, for Lyle Kennedy in CA-1611-MR.
Joe Nagle, Middlesboro, Frank G. Dickey, Jr., Lexington, Vernon Collett, Kenneth M. Boggs, Barbourville, for Ford Motor Credit Co. et al. in CA-1611-MR.
Before COOPER, HOWARD and WILHOIT, JJ.
These two appeals are taken from a judgment of the Bell Circuit Court adjudging an equitable lien of Lyle Kennedy to be superior to the claim of Omniflight Helicopters, Inc., but inferior to the claim of Kentucky Machinery, Inc., and reducing the amount of a judgment in favor of Kennedy.
On March 4, 1976, the Ford Motor Credit Company filed action number 9058-38 against the C & K Construction Company, Inc., Lyle Coal Company, Inc., and Dock Coal Company, Inc., seeking recovery on debts due it from those 3 corporations. As a result of that suit, a coal auger owned by C & K Construction Company was repossessed and sold by Ford. The sale of the auger brought almost $97,000.00 in excess of the amount owed by C & K to Ford. On June 4, 1976, Lyle Kennedy was permitted to intervene in this action asking the court to adjudge that he was entitled to an equitable lien on the auger to secure a debt of $250,000.00 owed to him by Vernon Collett. Collett was the president and sole stockholder of C & K, and the intervening complaint made him a party defendant.
On March 9, 1976, a suit for $74,550.00 on an account had been brought against C & K by Omniflight Helicopters, Inc., and on March 29, 1976, Kentucky Machinery had brought a suit for $17,380.85 against C & K on an account. On July 15, 1976, Kentucky Machinery moved to consolidate its suit against C & K with action number 9058-38, the suit initiated by Ford, or in the alternative that it be permitted to intervene in that action. This motion was granted and in the same order the court granted a default judgment for $300,000.00 in favor of Lyle Kennedy against Vernon Collett, and adjudged Kennedy to have an equitable lien on the auger. The court determined that Kennedy was entitled to all of the excess proceeds after payment to Ford except for the $17,380.85 claimed by Kentucky Machinery. The court passed to a later date a ruling on the rights of the two as to this sum. Ford was ordered to pay $17,425.00 from the excess proceeds it then held to the clerk of the court until a determination of the priority of the claims of Kennedy and Kentucky Machinery could be made. The balance of the excess funds, amounting to $79,425.23, was ordered to be paid to Kennedy. Vernon Collett appealed from this order to the Kentucky Supreme Court; however, his appeal was dismissed on motion of Kennedy for late filing of the notice of appeal. On August 19, 1976, an order of satisfaction was entered showing that Ford had paid the excess proceeds in accordance with the court's order. On August 20, 1976, Kentucky Machinery obtained a summary judgment against C & K on its claim. That same day, Omniflight also obtained a summary judgment against C & K for $74,550.00 on its claim.
On September 14, 1976, Omniflight moved that it too be permitted to intervene in action number 9058-38, asserting that it had a lien on the excess proceeds from the auger sale as the result of its judgment against C & K and that its claim was superior to either that of Kennedy or Kentucky Machinery. The motion to intervene was granted. Omniflight then filed two motions to vacate the July 16 order which had established Kennedy's equitable lien. It alleged mistake and fraud which had come to light as the result of newly discovered evidence. Omniflight's motions to vacate judgment were denied and the court ruled that Kentucky Machinery was entitled to the proceeds held by the clerk, basing this conclusion on the fact that Kentucky Machinery was a creditor of C & K while Kennedy was only a creditor of Vernon Collett. The court also reduced Kennedy's judgment against Collett from $300,000.00 to $250,000.00.
Kennedy appeals from this judgment (appeal CA-1611-MR) contending that his equitable lien should have been held to be superior to the claim of Kentucky Machinery, and that the court had no authority to reduce his judgment against...
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