Stathis v. Lexington Selected Yearling Sales Co.
| Decision Date | 19 June 2020 |
| Docket Number | NO. 2019-CA-000370-MR,NO. 2019-CA-000275-MR,2019-CA-000275-MR,2019-CA-000370-MR |
| Parties | SAM STATHIS AND CELEBRITY FARMS, LLC APPELLANTS v. LEXINGTON SELECTED YEARLING SALES CO., LLC; ERNIE MARTINEZ; AND AL CRAWFORD APPELLEES |
| Court | Kentucky Court of Appeals |
NOT TO BE PUBLISHED
APPEALS FROM FAYETTE CIRCUIT COURT
On October 6, 2017, Stathis and Celebrity Farms purchased three standardbred yearlings—METTLE, FOOL TO BELIEVE, and ITALIAN STYLE—at auction from LSYSC. Each horse had a "sales ticket," titled "ACKNOWLEDGMENT OF PURCHASE AND SECURITY AGREEMENT." Conditions of sale were provided to Stathis who, by his signature "Sam Stathis Celebrity Farm" on each sales ticket, acknowledged reading them and agreed they were binding. Stathis did not note on the sales tickets that he was acting as an agent, nor did he provide an "Authorized Agent Form" to LSYSC. Stathis took possession of the three horses but only paid for FOOL TO BELIEVE and ITALIAN STYLE. The purchase price for FOOL TO BELIEVE was $30,000, ITALIAN STYLE was $45,000, and METTLE was $180,000.
Stathis claims, prior to the auction, he entered an equal partnership with Ernie Martinez and Al Crawford to share METTLE's costs and profits on the condition that Martinez was to select the trainer for the horse.1 Stathis alleges LSYSC was aware of this partnership at the time he purchased METTLE on behalf of the partnership. By their own admission, all parties are experienced in the horseracing industry. Stathis further claims, but Martinez explicitly denies, that LSYSC told Martinez that Stathis selected a trainer for METTLE, and as a result, Martinez and Crawford refused to pay for METTLE. Stathis also refused to pay for METTLE, despite having already taken possession of the horse. Consequently, and pursuant to the conditions of sale, LSYSC withheld the registration certificates for all three horses.
On January 25, 2018, LSYSC filed the instant action to recover its secured interest in METTLE. On February 24, 2018, Stathis and Celebrity Farms answered and filed their counterclaims against LSYSC alleging breach of contract, tortious interference with contractual relations, conversion, and unjust enrichment. After some discovery was conducted, the court permitted Stathis and Celebrity Farms to file a third-party complaint against Martinez and Crawford for contribution, breach of contract, and promissory estoppel. Thereafter, Martinez executed an affidavit stating, "I did not advise Mr. Stathis that anyone at LSYSC had told me anything about who was training [METTLE]." On June 20, 2018, LSYSC provided the registration certificates for FOOL TO BELIEVE and ITALIAN STYLE to Stathis and Celebrity Farms, accompanied by a letter advising that providing the certificates did not negate LSYSC's right to withhold them under the conditions of sale.
Eventually, Crawford moved the court to dismiss the third-party complaint, primarily alleging there was no partnership agreement, or in the alternative, the agreement violated the statute of frauds. Thereafter, LSYSC moved the court for summary judgment and filed an affidavit of Randy Manges, its sales manager, in support. On August 27, 2018, the court entered its order declining to grant Crawford's motion to dismiss the third-party complaint as premature. Stathis and Celebrity Farms then filed their response to LSYSC's motion for summary judgment, as well as Stathis's supporting affidavit.
A hearing was held on September 14, 2018, and on September 27, 2018, the trial court entered an order finding:
In this case, there is no genuine issue of material fact concerning LSYSC's breach of contract claims against [Stathis and Celebrity Farms]. The Defendants signed a valid purchase agreement which obligates them to pay the purchase price of METTLE; however, despite the fact that they now possess the horse, they have failed to fulfill their obligation to pay for the horse. These facts are undisputed. Thus, summary judgment is appropriate on this issue in favor of LSYSC.
The trial court declined to grant summary judgment on the counterclaims of Stathis and Celebrity Farms concerning FOOL TO BELIEVE and ITALIAN STYLE, concluding further discovery was required. Nonetheless, on October 22, 2018, the court entered another order:
[t]hat LSYSC recover from the Defendants, Sam Stathis and Celebrity Farms, LLC, jointly and severally, the sumof $204,300.00 plus interest thereon at the agreed rate of 1.50% per month from August 16, 2018 until paid, plus its costs herein expended, including its attorneys' fee incurred in such amount as may be approved by the Court.
Soon thereafter, LSYSC renewed its motion for summary judgment on the remaining claims. Stathis and Celebrity Farms responded with a second affidavit of Stathis, alleging he was unable to train and race FOOL TO BELIEVE and ITALIAN STYLE absent registration certificates. LSYSC replied with another affidavit of Manges, stating registration certificates are not required to train standardbred horses.
On January 23, 2019, the court granted summary judgment in favor of LSYSC on the remaining claims concerning FOOL TO BELIEVE and ITALIAN STYLE. The court found LSYSC was entitled to withhold the certificates under the terms of the contract provided in the conditions of sale; thus, the counterclaims of Stathis and Celebrity Farms failed as a matter of law. On January 25, 2019, LSYSC moved the court to make its October 22, 2018, order final and appealable. A hearing was conducted, and on February 20, 2019, the trial court entered a judgment and order making its September 27, 2018, order of partial summary judgment final and appealable, as well as the amount recoverable by LSYSC. These consolidated appeals followed.
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, stipulations, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR2 56.03. An appellate court's role in reviewing a summary judgment is to determine whether the trial court erred in finding no genuine issue of material fact exists and the moving party was entitled to judgment as a matter of law. Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996). A grant of summary judgment is reviewed de novo because factual findings are not at issue. Pinkston v. Audubon Area Community Serv., Inc., 210 S.W.3d 188, 189 (Ky. App. 2006).
It is well-established that a party responding to a properly supported summary judgment motion cannot merely rest upon the allegations in his pleadings. Continental Casualty Co. v. Belknap Hardware & Mfg. Co., 281 S.W.2d 914, 916 (Ky. 1955). "[S]peculation and supposition are insufficient to justify a submission of a case to the jury, and . . . the question should be taken from the jury when the evidence is so unsatisfactory as to require a resort to surmise and speculation." O'Bryan v. Cave, 202 S.W.3d 585, 588 (Ky. 2006) (citation omitted). "[T]he proper function of summary judgment is to terminate litigationwhen, as a matter of law, it appears that it would be impossible for the respondent to produce evidence at the trial warranting a judgment in his favor." Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 480 (Ky. 1991).
Stathis and Celebrity Farms contend the trial court erred in granting summary judgment in favor of LSYSC concerning the contract for sale of METTLE for multiple reasons. We will address each, in turn.
Initially, Stathis and Celebrity Farms contend the trial court erred in granting summary judgment prior to allowing a reasonable opportunity for the parties to conduct discovery. "[S]ummary judgment is only proper after a party has been given ample opportunity to complete discovery, and then fails to offer controverting evidence." Pendleton Bros. Vending, Inc. v. Commonwealth, Fin. & Admin. Cabinet, 758 S.W.2d 24, 29 (Ky. 1988) (citing Hartford Ins. Group v. Citizens Fidelity Bank & Trust Co., 579 S.W.2d 628 (Ky. App. 1979)). Here, ample opportunity was provided to discover the terms of the parties' agreement; yet, Stathis and Celebrity Farms fail to point to any discovery which would preclude summary judgment. Stathis and Celebrity Farms claim they need to obtain discovery from Martinez and Crawford, as well as additional discovery from Manges. However, the trial court correctly found that such discovery isirrelevant to the contract between Stathis and Celebrity Farms and LSYSC for the sale of METTLE.
The conditions of sale explicitly list the documents that comprise the entire agreement. The first paragraph provides, "[t]his sale is governed by these Conditions of Sale[.]" It further states, "[t]he Company shall not be bound by any oral or written agreement or alleged agreement varying from these Conditions of Sale[.]" The last paragraph of the conditions of sale provides:
The entire agreement for sale is embodied in these Conditions of Sale, the Important Notices on the preceding pages of this Catalogue, the Agent Authorization Form (if any), the announcements, and the Acknowledgment of Purchase. Any attempt on the part of the Buyer to unilaterally alter or modify these Conditions of Sale by making changes on the Acknowledgement of Purchase is prohibited and shall be invalid and unenforceable. These aforementioned documents, as modified by the announcements made pursuant to Condition 10, constitute...
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