Randy A. Marema v. Hon Kelly Mark Easton Judge, Hardin Circuit Court ( 2015 )

IMPORTANT NOTICE
NOT TO BE PUBLISHED OPINION
THIS OPINION IS DESIGNATED "NOT TO BE PUBLISHED."
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PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C),
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RENDERED: SEPTEMBER 24, 2015
NOT - SHED
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2014-SC-000686-MR
DAT E 1 0 -I 5-45 C.A...A,Gc-ob.31A.81.1%
RANDY A. MAREMA; PAMELA J. MAREMA; APPELLANTS
AND WESLEY A. MAREMA
ON APPEAL FROM COURT OF APPEALS
V. CASE NO. 2014-CA-001438-OA
HARDIN CIRCUIT COURT NO. 10-CI-0231
HON. KELLY MARK EASTON, JUDGE, APPELLEE
HARDIN CIRCUIT COURT
AND
FIRST FEDERAL SAVINGS BANK OF REAL PARTY IN INTEREST
ELIZABETHTOWN, INC.
MEMORANDUM OPINION OF THE COURT
AFFIRMING
Randy A., Pamela J., and Wesley A. Marema (the Maremas) appeal from
an order of the Court of Appeals denying their petition for a writ of prohibition.
For the following reasons, we affirm.
I. BACKGROUND.
The Maremas borrowed in excess of $1,000,000 from First Federal
Savings Bank of Elizabethtown, Inc. (the Bank) to purchase two residential
properties in Elizabethtown. The terms of the loan called for interest only
payments for one year, with the balance due at the end of that year. The
Maremas secured the loan with mortgages on the two Elizabethtown properties
and on two properties they owned in Arizona. At the end of the one-year
period, the Maremas were unable to make the balloon payment and, after
making several extensions, the Bank filed a foreclosure action. The Maremas
filed a counter-claim alleging that the Bank had violated several provisions of
the federal Truth in Lending Act, 15 U.S.C.A. §§ 1601 et seq. (the Act).
The trial court granted summary judgment to the Bank on its foreclosure
action and awarded the Bank in excess of $1,000,000 in damages, which
included $12,368.91 in attorney fees. The court then held a hearing on the
Maremas' claims under the Act and found that their right of rescission was
time barred and that they were not entitled to actual damages. However, the
court found that the Bank had violated the Act by not providing the Maremas
with some required documents and it awarded the Maremas $12,000 in
damages plus $10,000 in attorney fees and $1,270.30 in costs.
The Maremas appealed to the Court of Appeals, arguing that the trial
court erred by finding that their right of rescission under the Act was time
barred; the trial court should have awarded actual damages; and the award of
attorney fees was insufficient. The Court of Appeals affirmed the trial court
and the Maremas sought discretionary review before this Court, which we
denied. They then sought discretionary review before the United States
Supreme Court, which was also denied.
Thereafter, the Maremas, through counsel, sought payment of the
attorney fees that the trial court had awarded. When the Bank did not pay the
attorney fees, the Maremas filed judgment liens. The Bank filed a motion to
quash the judgment liens and a motion to offset its own, and the Maremas'
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attorney fee awards. Following a hearing, 1 the trial court granted the Bank's
motions. The Maremas then filed a petition for a writ of prohibition in the
Court of Appeals, which the Court of Appeals denied. In doing so, the Court
held that the trial court had subject matter jurisdiction over the case, and the
Maremas had an adequate remedy by way of appeal. This appeal followed. On
appeal, the Maremas argue that the trial court did not have jurisdiction over
their case, that it acted erroneously by offsetting the attorney fee awards, and
that they do not have an adequate remedy on appeal.
II. STANDARD OF REVIEW.
The appropriate standard of review depends on the class or category of
writ case involved. If the case is one of the first class, i.e. where the trial court
is alleged to have no jurisdiction over the matter, the standard of review is
de novo. If the case is one of the second class, i.e. where the trial court acted
within its jurisdiction but did so erroneously, we review the decision by the
Court of Appeals for abuse of discretion, reversing the Court's factual findings
only if they are clearly erroneous. Grange Mut. Ins. Co. v. Trude, 151 S.W.3d
803, 810 (Ky. 2004), as modified (Dec. 1, 2004).
1 In their brief, the Maremas state that no hearing took place. However, we note
that the Bank stated in its motion to off-set attorney fees that the motion would be
heard on July 15, 2014, and the trial court noted in its order that a hearing was held
on July 15, 2014.
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III. ANALYSIS.
As noted above, there are two general classes of writ cases. The first
class involves the lower court acting outside its jurisdiction.
In the context of the extraordinary writs, "jurisdiction" refers not to
mere legal errors but to subject-matter jurisdiction, e.g., Goldstein
v. Feeley, 299 S.W.3d 549 (Ky. 2009), which goes to the court's
core authority to even hear cases. See, e.g., Petrey v. Cain, 987
S.W.2d 786, 788 (Ky. 1999) (defining subject-matter jurisdiction as
"a court's authority to determine 'this kind of case' as opposed to
`this case" (quoting Duncan v. O'Nan, 451 S.W.2d 626, 631 (Ky.
1970))).
Lee v. George, 369 S.W.3d 29, 33 (Ky. 2012).
"The Circuit Court shall have original jurisdiction of all justiciable causes
not vested in some other court. It shall have such appellate jurisdiction as may
be provided by law." Ky. Const. § 112. Kentucky Revised Statute (KRS)
454.080 provides that an action to enjoin a judgment shall be brought in the
court where the judgment was rendered. Therefore, the Maremas' argument to
the contrary notwithstanding, this is not a writ of the first class because the
trial court had jurisdiction to address post-judgment issues.
To qualify as a second class writ case, the Maremas must show that: (1)
there is no adequate remedy by appeal, and (2) that they will suffer great
injustice and irreparable harm. Lee v. George, 369 S.W.3d 29, 33 (Ky. 2012).
As an alternative to the second prong, they can show that their case fits into
the narrow "certain special cases" exception. Id. Even upon such a showing,
they must also show that the trial court erred or is about to err. Id. Because
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showing that there is no adequate remedy by appeal is a necessary pre-
condition to obtain a second-class writ, we address it first.
"No adequate remedy by appeal" means that the Maremas could not
adequately seek redress of any error if the writ is denied. Id. The Maremas
argue that the Bank "is in deep financial distress, and is about to be gobbled
up by another bank. Since the details of this impending transaction are being
kept from the public at large, it is impossible to know whether there would be
assets of the Bank to pay the attorney's fees." This amounts to mere
speculation, which is not sufficient to show the lack of an adequate remedy by
appeal. See Ridgeway Nursing & Rehab. Facility, LLC v. Lane, 415 S.W.3d 635
(Ky. 2013) (allegations of harm to the defendant from arguably impermissible
interviews of its employees conducted by the plaintiffs investigator were too
speculative to support issuance of a writ). Moreover, an appeal can correct the
legal error purportedly committed here; that the bank may become judgment
proof does not change this.
Even if the Maremas could prove they have no adequate remedy by
appeal, they cannot show great injustice and irreparable injury. That requires
showing "something of a ruinous nature." Grange Mut. Ins. Co. v. Trude, 151
S.W.3d 803, 808 (Ky. 2004). Even if the Bank cannot pay, there is no actual
harm to the Maremas because the court offset the Maremas' attorney fee debt
to the Bank. We recognize that their attorney may suffer harm if the Maremas
are unable to pay him; however, he is not a party to this appeal.
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Even if the Maremas could prove they have no adequate remedy by
appeal, this is not a special writ case. Special writ cases involve issuance of a
writ in order to prevent "a substantial miscarriage of justice" or when
"correction of [an] error is necessary 'in the interest of orderly judicial
administration." Lee v. George, 369 S.W.3d 29, 32 (Ky. 2012) quoting Bender
v. Eaton, 343 S.W.2d 799, 801 (Ky. 1961). The Maremas have not established
that the trial court's order off-setting attorney fees caused any miscarriage of
justice, let alone a substantial one. While offsetting the attorney fee awards
may have perhaps been erroneous, and we are not saying that it was, doing so
was a reasonable Solomon-like solution, not one that smacks of substantial
injustice. Furthermore, if the trial court's order was erroneous, correction of
any such error is not necessary for the orderly administration of justice. As set
forth in KRS 454.080, issues regarding enjoinder of the enforcement of
judgments belong in the court that issued the judgment. Therefore, issuance
of the order by the circuit court was in concert with the legislatively determined
orderly administration of justice.
Finally, because the Maremas have failed to prove any irreparable harm,
we need not address whether the trial court's actions were erroneous.
IV. CONCLUSION.
For the foregoing reasons, we affirm the denial of the Maremas' petition
for a writ of prohibition by the Court of Appeals.
All sitting. All concur.
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COUNSEL FOR APPELLANTS:
Terrence L. McCoy
COUNSEL FOR APPELLEES:
Jason B. Bell
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