Dan Gibson v. Ron Jones Individually ( 2021 )

RENDERED: FEBRUARY 26, 2021; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2019-CA-1847-MR
DAN GIBSON APPELLANT
APPEAL FROM PULASKI CIRCUIT COURT
v. HONORABLE JEFFREY T. BURDETTE, JUDGE
ACTION NO. 17-CI-00434
RON JONES, INDIVIDUALLY; TARA
INCORPORATED, A KENTUCKY
CORPORATION; FORD BROTHERS,
INC.; AND MATT FORD APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: CALDWELL, KRAMER, AND MAZE, JUDGES.
CALDWELL, JUDGE: This matter arises out of a boundary dispute. Having
reviewed the record, the orders of the trial court, and the briefs of the parties, we
affirm.
FACTS
In 1988, Appellant Dan Gibson (Gibson) purchased a parcel of real
property in Pulaski County. That same year, Appellee Ron Jones (Jones)
purchased an adjoining parcel of land. While Gibson used the property he had
purchased to graze livestock and grow ginseng, Jones eventually subdivided his
parcel and planned a housing development he named the Scarlett’s Way Addition
of the Tara Subdivision.1 Deeds reflecting the ownership of both parties, as well as
the subdivision of Jones’ parcel, were duly recorded in the Pulaski County Clerk’s
Office.
In the Spring of 2017, Jones engaged Appellee Ford Brothers, Inc.
(Ford Brothers), an auctioneer, to conduct an online auction of several parcels of
the Scarlett’s Way Addition of the Tara Subdivision. Several of these parcels
abutted the property owned by Gibson.
Soon thereafter, Gibson noticed signage advertising the auction and
believed the sign was placed upon his property. Gibson phoned Ford Brothers and
informed it that he believed that it was planning on auctioning property to which
1
Appellee Ron Jones and his wife Emma were granted the deed, along with another couple, in
April of 1988, and deeded it in that same month to Appellee Tara, Incorporated, a duly organized
corporation formed by the Joneses and their partners, that same couple who granted the deed to
Tara, Incorporated, in 1988.
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its client had no proper claim. After Ford Brothers took no action in response to
his phone call, Gibson and his wife went to the office of Ford Brothers.
The encounter at the auction company was unfriendly and did not act
to ameliorate the situation. Rather, Gibson took the action of filing a “deed of
correction,” which he drafted pro se, and in which he was both Grantor and
Grantee, in an attempt to “clarify” his belief about the accurate location of the
boundary between his property and the property owned by Jones and Tara,
Incorporated. This deed contained a different property description than the deed he
obtained in 1988. He had no survey conducted before drafting the new deed.
When the filing of the “deed of correction” did not result in a ceasing
of the auction, Gibson filed suit. In the suit filed in May of 2017, he named as
Defendants not only Jones and Tara, Incorporated, but also Ford Brothers and Matt
Ford, individually, ostensibly because Matt Ford was the listing auctioneer.2 Jones
and Tara, Incorporated answered and counterclaimed for title to the disputed land
to be quieted in their favor, and they requested damages for slander of title, loss of
quiet enjoyment, negligence, and nuisance, punitive damages, and costs. Ford
2
Appellant, while acting pro se, named Ron Jones and Tara, Incorporated, along with Ford
Brothers, Inc. and Matt Ford as Defendants in his initial Complaint. However, the property at
issue was deeded to and held by Tara, Incorporated by Ron Jones, along with his wife and the
couple mentioned above, the Warrens. The Court is unaware why Ron Jones was named a party
herein given that Tara, Incorporated, owned the property involved in the dispute. Regardless,
none of the parties ever raised this issue, and we decline to do so at this juncture.
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Brothers and Matt Ford answered and denied all allegations made by Gibson. As a
result of the filing of the suit, the auction was cancelled.
In August of 2017, the trial court dismissed the claims against Ford
Brothers and Matt Ford, finding that to hold an auction company or its listing agent
liable when there is a dispute of title to property which they have been engaged to
sell would have a chilling effect on the auction industry, and thus there was no
support in the law for such liability. The suit continued against Jones and Tara,
Incorporated, and the trial court ordered the parties to mediation.
Counsel for Jones and Tara, Incorporated notified the court that the
parties had selected a mediator. However, despite counsel for Jones having
scheduled a date and time with the mediator, Gibson refused to agree to the
scheduled date and the parties thereafter never submitted to mediation. After cross
motions for contempt and the unrelated recusal of the first presiding judge,
discovery continued. The newly assigned judge held the cross motions for
contempt in abeyance and set aside the prior mediation order, citing its futility.
In the Fall of 2018, Jones and Tara, Incorporated moved for partial
summary judgment, seeking dismissal of Gibson’s claims. A hearing was held on
September 21, 2018, at which counsel for Gibson appeared for the first time,
Gibson having proceeded pro se to that point. Counsel for Gibson had not filed an
entry of appearance prior to the hearing and did not request leave to file a written
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response, but rather placed arguments against the motion on the record at the
hearing.
A few days after the hearing, the trial court issued written findings
granting the motion. The court ruled that Gibson had provided no cognizable
evidence of any valid claim that the property boundary existed anywhere other
than where the deed Jones and Tara, Incorporated had provided indicated, and
where the survey which they had conducted indicated the boundary lay. The trial
court was wholly unpersuaded by Gibson’s self-serving “deed of correction” and
declared it “wholly invalid.”
The trial court also noted that by feeling it necessary to file the “deed
of correction” with a property description more expansive than the description in
the original deed obtained by him in 1988, Gibson was admitting that the original
deed did not describe the property in a way which supported his claim. The court’s
order also quieted title in the disputed portion of land in favor of Jones and Tara,
Incorporated. After the Order was issued, counsel for Gibson attempted to file an
untimely response, and then later a motion seeking CR3 60.02 relief from the entry
of the partial summary judgment. The trial court denied the response as untimely
and denied CR 60.02 relief. Gibson then attempted to appeal the entry of partial
3
Kentucky Rules of Civil Procedure.
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summary judgment, but that action was dismissed after this Court determined the
order was not final and appealable.4
The following spring, Jones and Tara, Incorporated, filed a motion
seeking summary judgment in their favor on their counterclaims. That motion was
granted by the trial court, and the court found that Jones and Tara, Incorporated
were entitled to judgment for slander of title, negligence, nuisance, and loss of use
and quiet enjoyment, as well as punitive damages.
Oral arguments were held by the trial court on the amount of damages
in August of 2019, and the trial court issued findings of fact and conclusions of law
awarding damages to Jones and Tara, Incorporated against Gibson totaling
$62,654.02.5 This appeal followed.
STANDARD OF REVIEW ON A MOTION TO DISMISS
Appellate courts employ a de novo standard of review when
determining whether a motion to dismiss was properly granted or denied.
A motion to dismiss is governed by a rigorous and
sweeping standard which dictates that it should be
granted only where “it appears the pleading party would
4
No. 2017-CA-1471-MR.
5
It does appear that there is a mathematical error in the computation of damages in the
Judgment. The Judgment states that the amount of damages suffered due to slander of title,
nuisance, and loss of use and quiet enjoyment totals $44,750.00. Additionally, the Judgment
held that the total punitive damages were $14,904.02 in attorney’s fees and costs. The Judgment
purports to grant a total judgment of $62,654.02, but the total of those two figures is only
$59,654.02. The $3,000.00 discrepancy is not accounted for in the judgment, but will be
addressed infra.
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not be entitled to relief under any set of facts which could
be proved in support of his claim.” Pari-Mutuel Clerks’
Union v. Kentucky Jockey Club, 551 S.W.2d 801 (Ky.
1977). When considering the motion, the allegations
contained in the pleading are to be treated as true and
must be construed in a light most favorable to the
pleading party. See Gall v. Scroggy, 725 S.W.2d 867
(Ky. App. 1987). The test is whether the pleading sets
forth any set of facts which—if proven—would entitle
the party to relief. If so, the pleading is sufficient to state
a claim. See CR 8.01. Since the trial court is not
required to make factual findings, the determination is
purely a matter of law. James v. Wilson, 95 S.W.3d 875
(Ky. App. 2002). Consequently, we review the decision
of the trial court de novo. Revenue Cabinet v. Hubbard,
37 S.W.3d 717 (Ky. 2000).
Mitchell v. Coldstream Labs., Inc., 337 S.W.3d 642, 644-45 (Ky. App. 2010).
ANALYSIS
Dismissal of Ford Brothers, Inc. and Matt Ford
The trial court granted the motion of Ford Brothers and Matt Ford,
(the Fords), the auction company and listing auctioneer, to dismiss them from the
action as they were simply agents of Jones and Tara, Incorporated and had no
liability to Gibson in his property line dispute with their clients. In so doing, the
trial court held that although Gibson had alleged the claim of trespass under KRS6
381.230 against each of the named defendants, including the Fords, such claim was
6
Kentucky Revised Statutes.
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not well taken, and Gibson could not prove any set of facts which would entitle
him to relief on such grounds as to the Fords.
The trial court explained that an action for trespass is only
maintainable in circumstances wherein a named defendant is either engaged in
hazardous activity which harmed the plaintiff’s property, where a trespass was
intentionally committed, or where a trespass was negligently committed, and it
held that no facts had been pled which would establish such violation by the Fords.
See Rockwell Int’l Corp. v. Wilhite, 143 S.W.3d 604, 619 (Ky. App. 2003).
Further, the court pointed to the axiomatic rule of agency, i.e., that an agent is not
liable for the lawful acts conducted on behalf of a disclosed principal. “[T]he law
generally protects an agent from liability for lawful acts done within the scope of
his agency on behalf of a disclosed principal.” Am. Collectors Exch., Inc. v.
Kentucky State Democratic Cent. Exec. Comm’n, 566 S.W.2d 759, 761 (Ky. App.
1978). In other words, Gibson had no cognizable action against the Fords as
agents for Jones and Tara, Incorporated, as they were not liable to him even if their
principals had been incorrect about the location of the property line. Finally, the
trial court stated that a strong policy reason for such agency theory existed in that if
an auction company could be so liable, conferring such liability would have a
chilling effect on the operation of auction companies in the Commonwealth.
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Gibson also argues on appeal that the Fords violated KRS
330.220(3).7 That statute regulates the conducting of “absolute” auctions of
property wherein there is a legitimate lien or encumbrance by a party who has not
engaged the auction company or assented to the listing of the property for auction.
We hold that neither Mr. Gibson’s telephone call nor his appearing at the Fords’
place of business to lodge his objection to the auction satisfies the “lien or
encumbrance” language of the statute. Further, when Gibson did file suit, the
Fords halted the auction, even though in the strict language of the statute, a bare
assertion of ownership contained in a complaint does not rise to the level of “lien
or encumbrance.”
7
(3) No auction shall be advertised as “absolute” nor shall any advertising contain the words
“absolute auction” or the word “absolute” or words with similar meaning nor shall any
licensee offer or sell any real or personal property at absolute auction unless:
(a) There are no liens or encumbrances on the real or personal property, except
property tax obligations, easements, or restrictions of record, in favor of any
person, firm, or corporation other than the seller, or unless each and every holder
of each and every lien and encumbrance, by execution of the auction listing
contract, or otherwise furnishing to the auctioneer written evidence of a binding
commitment therefor, shall have agreed to the unqualified acceptance of the
highest bid for the property, without regard to the amount of the highest bid or the
identity of the high bidder; or, alternatively, that a financially responsible person,
firm, or corporation, by execution of the auction listing contract or by otherwise
furnishing to the auctioneer written evidence of a binding commitment therefor,
shall have absolutely guaranteed the forthwith and complete discharge and
satisfaction of any and all liens and encumbrances immediately after the sale or at
the closing, without regard to the amount of the highest bid received, or the
identity of the high bidder[.]
KRS 330.220(3)(a).
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The trial court’s order dismissing the Fords is affirmed.
STANDARD OF REVIEW ON SUMMARY JUDGMENT
Appellate courts employ a de novo standard of review on questions
concerning the propriety of a trial court’s ruling on a motion for summary
judgment. Cmty. Fin. Servs. Bank v. Stamper, 586 S.W.3d 737, 741 (Ky. 2019).
In the seminal case of Steelvest, Inc. v. Scansteel Service Center, Inc., the
Kentucky Supreme Court explained that “the proper function of summary
judgment is to terminate litigation when, 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.” 807 S.W.2d 476, 480 (Ky. 1991). In reviewing such a
motion, the trial court must view the facts “in a light most favorable to the party
opposing the motion for summary judgment and all doubts are to be resolved in his
favor” and in so doing must examine the proof to ensure that no real issue of
material fact. Id.
ANALYSIS
Partial Summary Judgment Dismissing Gibson’s Claims
Against Jones and Tara, Incorporated
Upon motion, the trial court entered an order granting summary
judgment in favor of Jones and Tara, Incorporated which dismissed the claims
Gibson had forwarded in his complaint.
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The court found that Jones and Tara, Incorporated had legal title to
and were in actual or constructive possession of the disputed property because not
only did their deed so describe, but they had taken pains to have a surveyor
establish the boundaries described in the deed and affirm that Jones was not
attempting to auction any property owned by Gibson, and that there was no overlap
in the descriptions in the deeds. The court noted that Gibson had provided no
affirmative evidence, apart from the self-serving “deed of correction,” to establish
his claim.
Summary judgment is appropriate when it is determined that there is
no “genuine issue of material fact.” The trial court so determined, finding that
Gibson’s bare assertions, coupled only with the self-serving and non-credible
“deed of correction,” did nothing to establish that he held title to any portion of the
land described in the deed held by Jones and Tara, Incorporated, especially after
Jones had a surveyor review the deed and establish the boundaries described in the
deed on the land. As Gibson had not provided any notice of expert testimony by
the CR 26.02(4) deadline, the court reasoned he was not permitted to present
testimony conflicting with that of Jones’ surveyor. Thus, the evidence provided by
Jones was the only reliable evidence of the borders of the properties, and it
established no overlap and that Jones was not attempting to auction any property
which he did not own.
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The trial court noted that the “deed of correction” attempted to
describe different property than the deed Gibson was given in 1988 when he
purchased the property, which in itself was a tacit admission that the 1988 deed did
not convey to Gibson property which he later attempted through the “deed of
correction” to attach. “It is elementary that a deed can only convey title to land
actually owned by grantor and the grantee takes no greater title under a deed than
the grantor had.” York v. Perkins, 269 S.W.2d 242, 243 (Ky. 1954) (citing 26
C.J.S., Deeds, § 104b, p. 382; Buchanan v. Crucible Steel Casting & Metal Co., 5
Ky. Law Rep. 178; KRS 381.150). Thus, the trial court properly found the “deed
of correction” to be “wholly invalid” as it purported that Gibson was granting to
himself land to which he did not hold title, as was described in the 1988 deed by
which Gibson took title.
The trial court’s granting of summary judgment is affirmed.
Judgment on Damages
Following the entry of summary judgment in favor of Jones and Tara,
Incorporated, they sought judgment and an order addressing damages. A hearing
was held, and Jones and Tara, Incorporated presented testimony of witnesses and
evidence to support their claim of damages and their claim for punitive damages
and costs associated with defending Gibson’s action.
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The court found that Jones was damaged by Gibson’s slander of title,
negligence, and nuisance by loss of rental value of the lots from Gibson’s
commencement of the action until the holding of the damages hearing in an
amount totaling $24,750.00.8 Such amount was calculated using testimony and
evidence concerning the fair rental value of the property. The court found that
Jones had proven damages in that both the auction had to be canceled and a party
which had made an offer to purchase the property withdrew that offer because of
the action of Gibson clouding the title. That offer was for $20,000.00.
Slander of title requires one to establish “special damages.” Such
damages include diminution of the fair market value of the property or loss of the
proceeds of sale. As set forth in Bonnie Braes Farms, Inc. v. Robinson, 598
S.W.2d 765 (Ky. App. 1980):
In order to maintain a slander of title action in this
jurisdiction, the plaintiff must plead and prove that the
defendant has knowingly and maliciously communicated,
orally or in writing, a false statement which has the effect
of disparaging the plaintiff’s title to property; he must
also plead and prove that he has incurred special damage
as a result. Contrary to appellant’s contention at oral
argument, if special damage has not been incurred, the
action is not maintainable . . . . The special damage
required may consist of either a loss by the plaintiff of a
sale of his property or a diminution in its fair market
value.
8
The amount was actually $27,000.00 but was reduced by $2,250.00 to not duplicate damages
from the loss of the sale to the buyers who backed out on a sale of a portion of the property
because of the clouded title.
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Id. at 766-67 (citations omitted).
We find the analysis of slander of title claims in Pond
Place Partners, Inc. v. Poole, 351 S.C. 1, 567 S.E.2d
881, 890-91 (S.C. Ct. App. 2002), to be instructive:
Slander of title is grounded in the tort of
injurious falsehood. See id. (“Both torts are
specific examples of the general tort of
injurious falsehood and the same privileges
which apply to the torts of personal
defamation apply to the tort of injurious
falsehood.”); Zamarello v. Yale, 514 P.2d
228 (Alaska 1973); Procacci v. Zacco, 402
So. 2d 425 (Fla. Dist. Ct. App. 1981).
Ballard v. 1400 Willow Council of Co-Owners, Inc., 430 S.W.3d 229, 235 (Ky.
2013).
The court found that Jones and Tara, Incorporated would have been
entitled to the same amount of damages under a negligence theory because
Gibson’s negligence in claiming property to which he had no cognizable claim
resulted in the loss of the rental value and the disruption of the sale. “Although
admittedly an elusive concept, the customary measure of damages or injuries of a
temporary character is an amount which will reasonably compensate the injured
parties for the diminution in the value of the use and occupancy of the property.”
Bishop v. Rueff, 619 S.W.2d 718, 721 (Ky. App. 1981), overruled on other
grounds by Oliver v. Schultz, 885 S.W.2d 699 (Ky. 1994) (citing City of Danville
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v. Smallwood, 347 S.W.2d 516 (Ky. 1961); Price v. Dickson, 317 S.W.2d 156 (Ky.
1958)).
The court similarly found that nuisance, loss of use, and loss of quiet
enjoyment would have resulted in damages to Jones and Tara, Incorporated.
Pursuant to KRS 411.560:
(b) If the nuisance is a temporary nuisance and:
...
2. The claimant did not occupy the property during the
continuance of the nuisance, compensatory damages shall
be measured by the diminution in the fair rental value of
the property which resulted from the nuisance.
Therefore, under any of the available theories, Jones and Tara,
Incorporated were entitled to the damages awarded. Finally, the court found that
Jones had provided sufficient evidence to entitle him to $14,904.02 in attorney’s
fees, costs, and expenses of litigation, as punitive damages.
The court entered a judgment in the amount of $62,654.02, plus the
costs “herein expended.” As the total amount of damages listed adds up to only
$59,654.02, it is determined that the extra $3,000.00 awarded was for the costs
“herein expended.”
The judgment is affirmed.
ALL CONCUR.
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BRIEFS FOR APPELLANT: BRIEF FOR APPELLEES RON
JONES AND TARA,
John A. Combs INCORPORATED:
London, Kentucky
Molly K. Hardy
Somerset, Kentucky
BRIEF FOR APPELLEES FORD
BROTHERS, INC. AND MATT
FORD:
John D. Ford
London, Kentucky
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