Abel v. Austin
2013 Ky. LEXIS 458
| Ky. | 2013Background
- Fifty Kentucky plaintiffs previously represented by Kentucky lawyers in Moore v. American Home Products had their claims transferred to Alabama Stevens case represented by Langston and Beasley Allen.
- Settlement funds were established; Stevens settlement required minimum claimants, which Langston and Beasley Allen could not meet, prompting transfers of fifty Moore claimants to Stevens.
- Settlement distributions in Stevens allocated a total of $72,000 per claimant; after expenses, attorneys’ fees were allocated to Austin, Langston, and Beasley Allen, with Appellants receiving a reduced amount ($29,500) instead of $47,943.84 per claimant.
- Appellants later learned from Ford that their proper share was $47,943.84, prompting a lawsuit in Fayette County alleging fraud, misrepresentation, and breach of fiduciary duty against Appellees for misappropriation of settlement funds.
- The Fayette Circuit Court dismissed as time-barred, and the Court of Appeals affirmed; the Kentucky Supreme Court granted discretionary review to determine the governing statute of limitations.
- The Court ultimately held that Kentucky statutes apply, the action is time-barred under Kentucky law, and the one-year limitation for professional services governs claims arising from attorney misconduct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which statute of limitations governs? | Clains arise from Kentucky actions; Kentucky law should apply. | Borrowing statute KRS 413.320 requires Alabama limits. | Kentucky statute governs; Alabama limits do not apply. |
| Is KRS 413.245 the applicable limitation period? | Five-year limitations may apply under KRS 413.120(7)/(12) for fraud/misrepresentation. | KRS 413.245 one-year limit for professional services applies. | KRS 413.245 applies; exclusive one-year limit for professional services governs. |
| Where did accrual occur for the purposes of limitations? | Accrual occurred in Alabama due to representation in Stevens; thus Alabama timing should control. | Accrual occurred in Kentucky when funds were disbursed and misappropriations occurred there. | Accrual occurred in Kentucky; Kentucky limits apply (not Alabama). |
| Are the Appellants entitled to jury determination on discovery date? | There are genuine issues of fact about when discovery occurred. | Date of discovery was known by October 13, 2006; no jury needed. | No genuine issue of material fact; discovery occurred by October 13, 2006; action barred. |
Key Cases Cited
- Troxell v. Trammell, 730 S.W.2d 525 (Ky. 1987) (two statutes of limitation; specific controls when applicable)
- Pedigo v. Breen, 169 S.W.3d 831 (Ky. 2004) (professional negligence damages trigger accrual)
- Queensway Fin. Holdings Ltd. v. Cotton & Allen, P.S.C., 237 S.W.3d 141 (Ky. 2007) (accrual location; damages and negligence occur where injury happens)
- Meade County Bank v. Wheatley, 910 S.W.2d 233 (Ky. 1995) (ripened claim requires damages)
- Doe v. Golden & Walters, PLLC, 173 S.W.3d 260 (Ky. App. 2005) (damages required for ripe claim in malpractice)
- Alagia, Day, Trautwein & Smith v. Broadbent, 882 S.W.2d 121 (Ky. 1994) (professional services; accrual principles cited)
- Troxell, 730 S.W.2d 525 (Ky. 1987), 730 S.W.2d 525 (Ky. 1987) (specific vs general limitations; later statute controls when applicable)
- Cunningham v. Kentucky Bar Ass'n, 266 S.W.3d 808 (Ky. 2008) (disbarment related to Fen-Phen funds misappropriation)