RENDERED: NOVEMBER 2, 2017
TO BE PUBLISHED
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2016-SC-000136-DG ·
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ANGELA FORD; ANGELA FORD, P.S.C.; ATI APPELLANTS
VENTURES, LLC; AND VILLA PARIDISIO,
LLC
ON REVIEW FROM COURT OF APPEALS
v. CASE NOS. 2014-CA-000762.& 2014-CA-00791
FAYETTE CIRCUIT COURT NO. 12-CI-03758
HAROLQ BAERG, JR.; KATHLEEN M. APPELLEES
BAERG; AND FAISAL SHAH
OPINION OF THE COURT BY CHIEF JUSTICE MINTON
AFFIRMING AND REMANDING
Among the elements requiredynder our law to prove the tort of
conversion, the plaintiff must first prove that she has legal title to the
converted property and then prove the right to possess the property at the time
of the alleged conversion. Attorney Angela Ford filed this civil action asserting
the tort of conversion, claiming that Harold and Kathleen Baerg and Fasal
Shah should be required to disgorge large sums of money that Ford claimed
had been stolen from her by her attorr;iey, Seth Johnston, and transferred by
him to the Baergs and Shah. The trial court granted summary judgment. in
favor of Ford, but the Court of Appeals reversed the trial court's judgment,
holding that Ford failed to prove the essential elements of conversion
mentioned above. On discretionary review, we affirm the opinion of the Court of
Appeals and remand this case to the trial court with direction to grant
summary judgment to the Baergs and to Shah.
I. FACTUAL AND PROCEDURAL BACKGROUND.
Attorney Angela Ford received a large sum of legal fees for her work in
the notorious fen-phen lawsuit.1 Ford hired attorney Seth Johnston to help her
form several LLCs to manage and secrete these funds. Johnston then formed
two limited liability companies (LLCs), Villa Paridisio and ATI Ventures, to own
and manage the funds. Ford placed some funds into Villa Paridisio's PNC Bank
account and some into ATI Ventures's Republic Bank account. Johnston,
according to the record available to us, was the signatory on both LLCs'
•
accounts, later transferring Villa Paridisio's funds to BB&T, also an account
whe"re Johnston was named the ,sole signatory as revealed by the· available
record.
Johnston also represented Harold and Kathleen Baerg at this time. The
Baergs wished to engage in an I.R.C. § 1031 like-kind property exchange. And
they wanted Johnston to hold the proceeds from their sold property in an
intermediary company, Emerald Riverport, solely controlled by Johnston, until
they purchased new property to complete the § 1031 transaction.
Unknown to Ford and the Baergs, Johnston was involved in an extensive
scheme of fraud, theft, and illegal drug distribution. Johnston spent the
Baergs' proceeds from the sale of their property, placed in Emerald Riverport,
.1 See, e.g., Abbott v. Chesley, 413 S.W.3d 589(Ky.2013)
2
for his own scheme. When the Baergs wanted the money to purchase new
property under their§ 1031 transaction, Johnston wire-transferred funds from
Ford's Villa Paridisfo account to pay the seller of the new property. Johnsto~
also used funds from Ford's ATI Ventures account to purchase a cashier's
check, which he then negotiated to Zafar Nasir. Nasir later negotiated that
I . .
cashier's check to Faisal Shah, who deposited the check's funds into his
personal bank account.
After discovering these fraudulent