RENDERED: SEPTEMBER 30, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2020-CA-1131-MR
BINGHAM GREENEBAUM DOLL
LLP APPELLANT
APPEAL FROM GALLATIN CIRCUIT COURT
v. HONORABLE JAMES R. SCHRAND, JUDGE
ACTION NO. 14-CI-00055
CUT-N-SHOOT LLC AND
MEREDITH L. LAWRENCE APPELLEES
AND
NO. 2020-CA-1217-MR
MEREDITH L. LAWRENCE AND
CUT-N-SHOOT, L.L.C. APPELLEES/CROSS-APPELLANTS
CROSS-APPEAL FROM GALLATIN CIRCUIT COURT
v. HONORABLE JAMES R. SCHRAND, JUDGE
ACTION NO. 14-CI-00055
BINGHAM, GREENEBAUM, DOLL
L.L.P, D/B/A DENTONS BINGHAM
GREENEBAUM, L.L.P APPELLANT/CROSS-APPELLEE
AND
NO. 2021-CA-0320-MR
CUT AND SHOOT, L.L.C. AND
MEREDITH L. LAWRENCE APPELLANTS
APPEAL FROM GALLATIN CIRCUIT COURT
v. HONORABLE JAMES R. SCHRAND, JUDGE
ACTION NO. 14-CI-00055
BINGHAM, GREENEBAUM, DOLL,
L.L.P. APPELLEE
OPINION
AFFIRMING IN PART AND REVERSING AND REMANDING IN PART
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; CALDWELL AND K. THOMPSON,
JUDGES.
CLAYTON, CHIEF JUDGE: Bingham Greenebaum Doll, LLP (“Bingham”)
appeals from the Gallatin Circuit Court’s orders, entered on April 24, 2020, and
August 21, 2020, arguing that the court erred in finding that an attorneys’ fee
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agreement between Bingham and Meredith L. Lawrence (“Lawrence”) for a flat
fee secured by a mortgage on real property failed to comply with Supreme Court
Rule (“SCR”) 3.130(1.8)(a) (“Rule 1.8(a)”).
Because we conclude that Lawrence was given a reasonable
opportunity to seek the advice of independent legal counsel on the transaction and
that Bingham did not take an interest in Lawrence’s property for more than the
agreed-upon legal fees, we reverse the circuit court’s judgment and remand to
enforce the mortgage held by Bingham. We affirm on cross-appeal.
Lawrence also filed a direct appeal from various Gallatin Circuit
Court orders entered on December 15 and 16, 2020, and March 2, 10, and 15,
2021, alleging various claims of error. This Court has consolidated Bingham’s and
Lawrence’s appeals. Finding no error as to Lawrence’s direct appeal, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Litigation between Bingham and Lawrence has reached the Kentucky
Supreme Court multiple times. We turn to the most recent Supreme Court opinion
for a summary of the facts applicable in this matter:
In 2008, Lawrence retained Bingham attorney J. Richard
Kiefer to defend him against federal tax-evasion charges.
At some point in the representation, the parties agreed to
revise their original fee agreement because Lawrence had
fallen behind in his payments. The new agreement stated
that Lawrence would pay a flat fee of no less than
$450,000 the principal not to exceed $650,000.
Lawrence agreed to secure his payment with a mortgage
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on real estate he owned, and he signed a promissory note
evidencing his debt.
Lawrence was convicted of three counts of filing
false tax returns. He then sued Kiefer and Bingham,
among others, in Kenton Circuit Court for legal
malpractice. Because Lawrence had not paid for a
portion of the legal services provided to him, Bingham
filed a counterclaim to recover its fee; specifically,
Bingham sued for enforcement of the promissory note.
The Kenton Circuit Court dismissed Lawrence’s
malpractice claim and granted default judgment to
Bingham on its counterclaim. [The Kentucky Supreme
Court] upheld the judgment. [See Bingham Greenebaum
Doll, LLP v. Lawrence, 567 S.W.3d 127, 131 (Ky. 2018)
(“Lawrence I”)].
Simultaneously occurring with the Kenton Circuit
Court case, Bingham sued Lawrence in Gallatin Circuit
Court to foreclose on the property Lawrence agreed to
mortgage as security on his debt for Bingham’s services
[(the “Marathon Property”)]. Gallatin County was the
chosen venue for this action because the [Marathon
Property] was situated in that county. Lawrence
counterclaimed for legal malpractice.
Also occurring simultaneously with the above two
cases was a collateral attack on his conviction that
Lawrence filed in federal court based, in part, on a claim
of ineffective assistance of counsel. The federal court
ruled against Lawrence on his ineffective-assistance-of-
counsel claim and issued its final order before the
resolution of the Kenton and Gallatin cases.
In the Gallatin Circuit Court foreclosure action,
Bingham moved for summary judgment, which the trial
court granted. Then, upon Bingham’s motion, the trial
court entered an order of sale. After several further
procedural steps, the [Marathon Property] was sold, and
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the sale was confirmed by the trial court on May 30,
2018.
Lawrence v. Bingham Greenebaum Doll, L.L.P., 599 S.W.3d 813, 819-20 (Ky.
2019) (“Lawrence III”) (footnotes omitted).
Lawrence appealed the Gallatin Circuit Court’s order confirming the
sale, which was eventually transferred to the Kentucky Supreme Court. Following
briefing, the Supreme Court vacated the summary judgment and remanded the case
to the Gallatin Circuit Court to hear evidence regarding Bingham’s compliance
with Rule 1.8(a). Lawrence III, 599 S.W.3d at 829.
In its opinion, the Supreme Court said the following: “The only
specific argument Lawrence makes . . . that has possible merit and that is not
barred by claim or issue preclusion is whether Kiefer violated [Rule 1.8(a)] by
taking a possessory interest in Lawrence’s property and by taking a property
interest, the value of which exceeded the fees owed.” Id. at 827. The Court further
stated:
We find no evidence in the record to resolve the issue of
whether the “transaction and terms on which the lawyer
acquires the interest are fair and reasonable to the
client[.]” Nor is there anything in the record resolving
the issue of whether Lawrence was “advised in writing of
the desirability of seeking and [was] given a reasonable
opportunity to seek the advice of independent legal
counsel on the transaction.” . . . These are issues that
must be resolved by the trial court before summary
judgment can be granted.
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Id. at 828-29.
On remand, the circuit court held an evidentiary hearing regarding the
Rule 1.8(a) issues raised by the Supreme Court. Kiefer, Lawrence, and their
respective experts testified. In its April 24, 2020, order, the circuit court
acknowledged the Supreme Court’s recent opinion and the prior findings made by
the Supreme Court. As for the remaining Rule 1.8(a) questions, the circuit court
found that (1) the transaction and terms were fair and reasonable to Lawrence per
Rule 1.8(a)(1); (2) Kiefer had advised Lawrence in writing of the desirability of
seeking the advice of independent legal counsel on the transaction per Rule
1.8(a)(2); and (3) it could not make a summary judgment decision as to whether
Lawrence was given a reasonable opportunity to seek the advice of independent
legal counsel per Rule 1.8(a)(2). For this last question, the circuit court reasoned
that “negotiations” were ongoing immediately prior to the pending June 2012 trial.
The circuit court also found that Bingham took a security interest in
an amount greater than the legal fees and expenses owed. The court based its
holding on language in the promissory note that accounted for the possibility that
Lawrence could owe up to $650,000 in fees if the trial was continued for four
months or more and language in the mortgage referencing that the highest
aggregate amount which the mortgage could secure was $1 million.
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With these holdings, the circuit court denied Bingham summary
judgment, vacated the prior orders regarding the sale and confirmation of sale of
the Marathon Property, and ordered the Special Master Commissioner to deed the
Marathon Property back to Lawrence. The circuit court also made its order final
and appealable.
Bingham timely filed a Kentucky Rule of Civil Procedure (“CR”)
59.05 motion to alter, amend, or vacate. In its motion, Bingham argued that,
because the Supreme Court remanded the case to the circuit court for it to resolve
genuine issues of material fact, the circuit court should have weighed the evidence
and testimony presented at the hearing in accordance with the preponderance of the
evidence standard and should not have continued to employ the summary judgment
standard, as no such motion was pending. Bingham further argued that it did not
take a possessory interest in the Marathon Property for more than the agreed-upon
fee and that Lawrence had been given reasonable time to consult an attorney in
compliance with Rule 1.8(a).
Lawrence did not file a CR 59.05 motion concerning the April 2020
order or otherwise contest the Marathon Property being deeded back to him at that
time.
The circuit court denied the motion to alter, amend, or vacate in part,
but also added the following language in its order: “[B]ased on the testimony and
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evidence presented at the Hearing, as well as argument from counsel, the Court
finds Bingham took a possessory interest in the Marathon Property for more than
the agreed-upon fee, and that Lawrence was not given a reasonable time to consult
with independent counsel.” Thereafter, Bingham filed this appeal.
We will discuss more facts as they become relevant herein.
ANALYSIS
a. Bingham’s Appeal
1. Appealable Order
We first note Lawrence argues that Bingham’s appeal is improper
because it is from an interlocutory denial of a summary judgment. Bingham
contends that the circuit court’s order is final and appealable because it contained
the recitations necessary under CR 54.02 regarding a judgment upon multiple
claims or involving multiple parties.
As stated by a panel of this Court, “[i]t is well settled in this
Commonwealth that the denial of a motion for summary judgment is interlocutory
and is not appealable.” Roman Catholic Bishop Of Louisville v. Burden, 168
S.W.3d 414, 419 (Ky. App. 2004) (citations omitted). Generally, the denial of
summary judgment is not “a final adjudication upon one or more of the claims in
litigation . . . [nor does it] conclusively determine the rights of the parties in regard
to that particular phase of the proceeding.” Hale v. Deaton, 528 S.W.2d 719, 722
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(Ky. 1975). Instead, “[a]n order denying a motion for summary judgment
ordinarily does not finally adjudicate anything, as the party whose motion was
denied may still prevail at trial.” Medcom Contracting Services, Inc. v.
Shepherdsville Christian Church Disciples of Christ, Inc., 290 S.W.3d 681, 684
(Ky. App. 2009) (citation omitted).
However, the order in this case not only denied Bingham summary
judgment but also vacated two prior orders of sale and ordered that the Special
Master Commissioner prepare a deed for the Marathon Property back to Lawrence.
Thus, because Kentucky Rules of Civil Procedure 54.01 defines a “final or
appealable judgment” as “a final order adjudicating all the rights of all the
parties[,]” and the circuit court’s order disposed of and adjudicated all the rights of
all the parties regarding that particular phase of the proceeding, “the result of the
. . . order left nothing to adjudicate regarding the rights and priorities of the
parties.” Security Federal Sav. & Loan Ass’n of Mayfield v. Nesler, 697 S.W.2d
136, 138-39 (Ky. 1985). Therefore, we will proceed with a review of Bingham’s
arguments on appeal.
2. Standard of Review
Before discussing the appropriate standard of review in this case, we
note that, while the circuit court stated that it was denying Bingham’s motion for
summary judgment, the circuit court also held an evidentiary hearing and made
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findings of fact in its orders. Our standard of review concerning a court’s findings
of fact made during an action tried upon the facts without a jury is outlined in CR
52.01, which provides that “[f]indings of fact, shall not be set aside unless clearly
erroneous, and due regard shall be given to the opportunity of the trial court to
judge the credibility of the witnesses.” Under Kentucky law, a factual finding is
clearly erroneous if it is not supported by substantial evidence. Moore v. Asente,
110 S.W.3d 336, 354 (Ky. 2003). Substantial evidence has been defined as
“evidence of substance and relevant consequence, having the fitness to induce
conviction in the minds of reasonable men.” Kentucky State Racing Commission v.
Fuller, 481 S.W.2d 298, 308 (Ky. 1972) (internal quotation marks and citation
omitted).
However, while deferential to the lower court’s factual findings,
appellate review of legal determinations and conclusions from a bench trial is de
novo. Sawyers v. Beller, 384 S.W.3d 107, 110 (Ky. 2012).
3. Whether Lawrence Had a “Reasonable Opportunity” to
Seek the Advice of Independent Legal Counsel
In its April 24, 2020, order, the circuit court found that Lawrence was
not provided with a reasonable time to consult with independent counsel. Rule
1.8(a) states, in pertinent part, that “[a] lawyer shall not enter into a business
transaction with a client or knowingly acquire an ownership, possessory, security
or other pecuniary interest adverse to a client unless . . . (2) the client . . . is given a
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reasonable opportunity to seek the advice of independent legal counsel on the
transaction[.]”
In this case, we disagree with the circuit court’s conclusion that
Lawrence was not given a reasonable opportunity to seek the advice of
independent legal counsel on the transaction. “The opportunity to seek
independent advice must be real and meaningful. It is not enough that at some
moment in time an opportunity existed no matter how brief or fleeting that
opportunity might have been.” Valley/50th Ave., L.L.C. v. Stewart, 153 P.3d 186,
190 (Wash. 2007) (en banc) (citation omitted). Moreover, “[t]he definition of a
‘reasonable opportunity’ may depend on the circumstances of any given case, but it
will always mean more than the mere physical ability to contact an attorney.” Id.
at 191.
On this point, Lawrence’s testimony during the evidentiary hearing is
the best evidence. For example, Lawrence testified that in December 2011 and
February 2012, he consulted with other attorneys in his office regarding the
proposed arrangement when Kiefer recommended him in writing to do so.
Lawrence undeniably had a “reasonable opportunity” to consult with other
attorneys when he did consult with other non-Bingham attorneys on at least two
separate occasions about moving to a flat fee arrangement secured by collateral.
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Additionally, the parties’ discussions and negotiations concerning fee
issues continued throughout the months of December, January, February, and
March. The negotiations culminated with Lawrence confirming his agreement to
all of the terms in a letter memorializing the parties’ written agreement dated April
2, 2012, and signed by Lawrence on April 3, 2012. That period of four months
certainly gave Lawrence a “reasonable opportunity” to consult with independent
counsel concerning the arrangement. Moreover, Lawrence, an attorney and
businessman, participated actively in the discussions concerning the changes to the
fee agreement and securing payment with a mortgage for at least four months with
Bingham. Lawrence also had the opportunity to review the written letter
agreement, promissory note, and mortgage documents, commenting on and
revising them on at least two different occasions in March and April 2012 before
signing them months later in June and July 2012.
The circuit court erred when it focused on the time between when
Lawrence signed the mortgage and promissory note in June and July 2012 and the
trial date in June 2012. In doing so, the circuit court overlooked that there were no
additional negotiations concerning – or revisions to – either document after April
2012 other than a change to the property description of the Marathon Property.
The circuit court correctly recognized that no additional correspondence between
the parties was admitted into evidence for the time between April and June 2012
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about negotiations concerning the change in fee arrangement. However, the record
reflects that the absence of evidence was because there were no further
negotiations during that period. Moreover, Lawrence has provided no evidence
that Bingham attempted to change the agreement’s terms materially or
substantively after the parties reached an agreement in April 2012. Therefore, the
record and Lawrence’s conduct indicate that during the period of substantive
discussions and negotiations of the fee agreement, Lawrence was provided with
“real and meaningful” opportunities to consult with an independent attorney.
Stewart, 153 P.3d at 191.
Moreover, the fact that Lawrence sought and obtained independent
legal advice during the negotiation period is evidence that he knew he could obtain
independent advice at all stages of the negotiations, including up until he signed
the mortgage. Rule 1.8(a) requires that the client be “given a reasonable
opportunity to seek the advice of independent legal counsel on the transaction[.]”
(Emphasis added.) Lawrence’s conduct demonstrated that he both knew he had the
opportunity to seek the advice of independent counsel and took advantage of that
opportunity. Thus, we reverse the circuit court and find that Lawrence was given a
reasonable opportunity to consult with independent legal counsel.
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4. Whether the circuit court Mistakenly Interpreted the
Amount of Bingham’s Security Interest
Bingham argues that the circuit court made two mistakes when
analyzing Bingham’s security interest in the Marathon Property. The first alleged
mistake was that the circuit court did not recognize that Bingham only had a
security interest – and not an ownership or possessory interest – in the Marathon
Property. The second alleged mistake was that the circuit court did not recognize
that the amount of Bingham’s security interest in the Marathon Property was no
greater than the flat fee agreed to by Lawrence.
In this case, the arrangement is a “security . . . interest adverse to a
client” as contemplated under Rule 1.8(a). Indeed, “Kentucky law has long
subscribed to the ‘lien theory’ of mortgages and holds that a mortgage is a mere
security for debt, and that, . . . the mortgagor is the real owner of the property
mortgaged.” Grafton v. Shields Mini Markets, Inc., 346 S.W.3d 306, 310 (Ky.
App. 2011) (some internal quotation marks and citations omitted). Therefore,
“mortgages are treated no differently than any other lien and, generally,
mortgagors – not mortgagees – are considered the owners of mortgaged property.”
Id. (emphasis added) (footnote omitted).
However, although the arrangement in this case was a “security
interest adverse to a client” as contemplated under Rule 1.8(a), the result was not
that the arrangement automatically violated Rule 1.8(a). Rather, the parties were
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required to comply with the requirements of Rule 1.8(a). This is illustrated by
another Kentucky Supreme Court rule, which states that while “[a] lawyer shall not
acquire a proprietary interest in the . . . subject matter of litigation the lawyer is
conducting for a client,” a “lawyer may . . . acquire a lien authorized by law to
secure the lawyer’s fee or expenses[.]” SCR 3.130(1.8)(i)(1). Thus, the Rules
contemplate that, under the correct circumstances, and when done in compliance
with the Rules, an attorney may take out a lien even on the subject matter of
litigation the lawyer is conducting for a client to secure the lawyer’s fees.
Therefore, Bingham did not automatically violate Rule 1.8(a) by using a mortgage
of the Marathon Property to secure the payment of its legal fees.
Additionally, the record reflects that Bingham did not have a security
interest in Lawrence’s property for more than what Lawrence owed to Bingham.
The promissory note and mortgage only permitted Bingham to collect what
Lawrence owed under the parties’ letter agreement, as referenced in the promissory
note. Indeed, the promissory note was not for a flat fee of $650,000 but for “up to
(and not to exceed)” $650,000 as provided in the parties’ letter agreement, which
the note specifically referenced.
Moreover, the circuit court found the “future advance clause” in the
mortgage problematic. Such clause stated that the mortgage would secure “up to
(and not exceed) the maximum aggregate amount of $1,000,000.00[.]” However,
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by its terms, the mortgage only secured the amount Lawrence owed and nothing
more. Instead, and only in the event of any additional indebtedness, the aggregate
maximum amount capped the potential total security interest at a maximum of
$1,000,000.00, giving Bingham priority over any subsequent lienholders up to that
amount. Moreover, Kentucky statute explicitly authorized such language. See
Kentucky Revised Statute (“KRS”) 382.520(2). As stated in First Commonwealth
Bank of Prestonsburg v. West, “future advance clauses . . . are valid in Kentucky.
. . . It is sufficient if the mortgage clearly shows it is to stand as security for both an
original loan and for such additional indebtedness as may arise from future
dealings between the parties.” 55 S.W.3d 829, 833 (Ky. App. 2000) (internal
quotation marks and citations omitted). In this case, the language did not state that
Lawrence owed the amount listed under the maximum aggregate amount, and
Bingham did not have any ability to collect more than Lawrence owed under the
parties’ agreement.
5. Conclusion
Thus, because we conclude that the parties’ arrangement met the
requirements of Rule 1.8(a), we reverse the circuit court’s judgment and remand to
the circuit court for the enforcement of the mortgage on the Marathon Property.
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b. Lawrence’s Cross-Appeal
Lawrence frames his cross-appeal in the following terms: “Gallatin
circuit court first correctly enforced the mandate, then, departed and exceeded the
mandate and its jurisdiction/authority, unwinding a final-confirmed judicial sale
and approved judicial deed that had finally conveyed [the Marathon Property] to a
non-party as was requested by [Bingham].”
As previously discussed, in denying Bingham summary judgment, the
circuit court vacated its previous order of sale of the Marathon Property and
fixtures and ordered the Special Master Commissioner to prepare a deed conveying
the Marathon Property back to Lawrence. Lawrence takes issue with the circuit
court’s actions in his cross-appeal. Lawrence also includes arguments concerning
conversion and the deed he received as part of his cross-appeal. However, the
circuit court did not rule on these claims until October and December 2020 at the
earliest, while Lawrence filed the notice of appeal for his cross-appeal on
September 29, 2020. Thus, we decline to address the issues raised by Lawrence on
cross-appeal.
c. Lawrence’s Direct Appeal
Lawrence’s direct appeal involves the circuit court’s decisions from
September 2020 to March 2021. In October 2020, the circuit court held that
Lawrence was not entitled to “damages” or “liquidated fair market value” but
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rather restitution of the net benefits Bingham “received during the time it owned
the Marathon Property.” The circuit court further held that Bingham had not
converted the Marathon Property and that Bingham was not required to repay the
attorneys’ fees Lawrence had already paid to Bingham.
Thereafter, the circuit court denied Lawrence’s motion for
reconsideration of its October 2020 order in an order dated December 15, 2020.
The circuit court reiterated that restitution was the appropriate remedy in this case
and found no grounds to alter its previous decisions. Similarly, in another order
entered on December 15, 2020, the circuit court denied Lawrence’s CR 59.05
motion as to the circuit court’s August 2020 order. Specifically, the circuit court
denied Lawrence’s attempt to assert claims based on “deficient performance”
issues, stating “[t]he Court has addressed [Lawrence’s] arguments in previous
Orders and will not do so again. The Court finds no grounds for which to change
its previous decision.” Moreover, the circuit court found no basis for a claim
necessitating Bingham to repay attorneys’ fees previously paid by Lawrence to
Bingham.
Additionally, on December 16, 2020, the circuit court entered a final
order instructing the Special Master Commissioner to sign the deed consideration
certificate and file and record the deed for the Marathon Property with the county
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clerk. This order was needed because Lawrence returned the deed to the Special
Master Commissioner unsigned rather than signing and filing the deed himself.
Thereafter, the circuit court denied numerous other motions filed by
Lawrence. Lawrence filed his notice of appeal on March 18, 2021.
Lawrence first argues that the circuit court erred in dismissing his
counterclaims based on the “Exoneration Rule.” However, the Kentucky Supreme
Court in Lawrence v. Bingham, Greenebaum, Doll, L.L.P., 567 S.W.3d 133, 141
(Ky. 2018) (“Lawrence II”) and Lawrence III barred any of Lawrence’s claims
based on Bingham’s alleged “deficient performance.” In Lawrence II, the
Supreme Court affirmed this Court’s application of the “Exoneration Rule,”
finding that the circuit court properly dismissed a 2015 complaint by Lawrence
founded on Bingham’s alleged professional negligence in its former representation
of Lawrence. See Lawrence II, 567 S.W.3d at 135. The Supreme Court concluded
that, “[b]ecause Lawrence failed to allege that he had been exonerated of his
convictions through post-conviction proceedings, the trial court correctly dismissed
his legal malpractice claim without prejudice.” Id. at 141.
Moreover, in Lawrence III, the Supreme Court held that issue
preclusion barred any argument Lawrence subsequently made based on claimed
deficient performance by Bingham. 599 S.W.3d at 825-26. As noted by the
Supreme Court, “[w]hether [Bingham’s] performance in representing Lawrence
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was deficient is an issue that has already been litigated” in the criminal proceeding
when Lawrence filed a motion to set aside his conviction based on allegations of
ineffective assistance of counsel. Id. at 825. “Neither the federal magistrate judge
nor the federal district judge found any hint of deficient performance on
[Bingham’s] part.” Id. at 824-25. Therefore, Lawrence is barred from rearguing
the matter.
Lawrence next argues that the promissory note and mortgage between
the parties “encumbered, clouded and slandered” title on the Marathon Property.
However, claims founded on the promissory note were addressed by the Supreme
Court in Lawrence I and Lawrence III, with judgment in Bingham’s favor. Indeed,
the Supreme Court in Lawrence I found that Bingham was entitled to judgment on
the promissory note, and the Supreme Court reiterated such finding in Lawrence
III. See Lawrence I, 567 S.W.3d at 131; Lawrence III, 599 S.W.3d at 826
(“Because all the elements of claim preclusion are satisfied here, Lawrence’s
challenge on the amount of attorneys’ fees owed, i.e.[,] the enforceability of the
promissory note, is precluded. Any argument made by Lawrence seeking to
renege on his obligation owed per the promissory note is barred by claim
preclusion.”).
Moreover, no court has ever determined that Bingham’s mortgage on
the Marathon Property was invalid. All that the Supreme Court in Lawrence III
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required the circuit court to address regarding the mortgage was to conduct further
proceedings regarding the Rule 1.8(a) analysis. 599 S.W.3d at 828-29. Moreover,
the circuit court’s determination that Bingham was not entitled to summary
judgment on its foreclosure claim did not equate to a final judgment regarding the
mortgage’s validity.
Indeed, almost every argument Lawrence makes in his appeal is based
on the incorrect claim that the Supreme Court in Lawrence III “preserved”
affirmative claims for Lawrence. However, the only defense that Lawrence gained
from Lawrence III was that Bingham’s mortgage on the Marathon Property may
not be enforceable. See Lawrence III, 599 S.W.3d at 828. The Supreme Court
unambiguously stated that a violation of the ethical rules does not create a private
right of action. Id.
Lawrence next argues that Bingham converted certain business
fixtures at the Marathon Property and therefore deserves damages. However, in
this case, the equitable principles of restitution apply, and parties like Bingham are
not subject to liability or damages when prior judgments in their favor are later
deemed erroneous or vacated. See Bridges v. McAlister, 106 Ky. 791, 798, 51
S.W. 603, 605 (1899) (“When a judgment is reversed, restitution must be made of
all that has been received under it, but no further liability should in any case be
imposed.”). In ordering both the Marathon Property and the fixtures to be deeded
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back to Lawrence, along with any of the net benefits Bingham received from the
Marathon Property during the time it collected the rents and paid the expenses, the
circuit court followed the proper principles of restitution. Id.
Lawrence also makes arguments concerning the amount of damages
Bingham owes him and the fair market value of the Marathon Property. However,
because we have found that Lawrence has no valid claims to pursue, such
arguments are moot, and we decline to address them. Moreover, the amount of
monetary restitution is not before this Court. The circuit court determined such an
amount in a November 2021 order, and Lawrence filed his direct appeal’s notice of
appeal on March 18, 2021. Thus, such amount is not an issue in any of the appeals
before the Court in this matter.
Finally, Lawrence argues that he should receive compensation or
damages for alleged maintenance issues relating to the Marathon Property.
However, Lawrence did not file a motion requesting such compensation until April
27, 2021, after the date that he filed his notice of appeal in this matter. Thus, such
issues are not properly before this Court.
Thus, for the foregoing reasons, we affirm the circuit court as to all
claims raised in Lawrence’s direct appeal.
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CONCLUSION
We reverse the circuit court’s April 24, 2020, order and remand for
the enforcement of the mortgage on the Marathon Property. We affirm the circuit
court as to the issues Lawrence raised on cross-appeal and direct appeal.
ALL CONCUR.
BRIEFS FOR APPELLANT/ BRIEFS FOR APPELLEE/
CROSS-APPELLEE: CROSS-APPELLANT MEREDITH
L. LAWRENCE:
Aaron A. VanderLaan
Frank K. Tremper Meredith L. Lawrence, pro se
Covington, Kentucky Katy Lawrence
Warsaw, Kentucky
ORAL ARGUMENT FOR ORAL ARGUMENT FOR
APPELLANT: APPELLEE:
Frank K. Tremper Meredith L. Lawrence, pro se
Covington, Kentucky Warsaw, Kentucky
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