Statewide Environmental Services, Inc. v. Fifth Third Bank
352 S.W.3d 927
Ky. Ct. App.2011Background
- Aug. 28, 2006, Statewide Environmental Services, Inc. and Ball Development Corp. executed a $2.5M promissory note with Fifth Third Bank, secured by corporate real/personal property and personal guarantees of Rudy Ball, Nelson Ball, Donald Ball, and Bernard Ball.
- Fifth Third demanded payment at maturity, filed suit in Marion Circuit Court seeking principal, interest, asset seizure, and a receiver to oversee operations pending resolution.
- An attorney special appearance (Feb. 25, 2008) sought extension to hire counsel; court granted extension to Mar. 24, 2008.
- On Mar. 24, 2008, Rudy and Nelson answered; Aline Ball answered for Donald under a power of attorney; Bernard Ball timely answered Apr. 28, 2008.
- Corporate answers on Mar. 24, 2008 were signed by non-attorneys (presidents of the corporations) and lacked attorney signatures; they were effectively deficient.
- Fifth Third moved (Aug. 9, 2008) to strike deficient corporate answers and for default; circuit court struck the corporate answers, entered default against the corporations (Nov. 18, 2008), issued an interlocutory order, and later issued a final order (May 19, 2009); corporations did not move to set aside defaults and appealed the default/summarY judgments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default judgment against corporate appellants was proper | Fifth Third | Corporations contends improper default due to cure opportunity | Default judgment affirmed |
| Whether summary judgment against individual appellants was proper | Fifth Third | Individuals failed to oppose summary judgment | Summary judgment affirmed |
Key Cases Cited
- Jeffrey v. Jeffrey, 153 S.W.3d 849 (Ky.App.2004) (review limited to pleadings and actual default status)
- Leedy v. Thacker, 245 S.W.3d 792 (Ky.App.2008) (appearance does not prevent default; notice requirements CR 55.01)
- Perry v. Central Bank & Trust Co., 812 S.W.2d 166 (Ky.App.1991) (carelessness in responding not by itself grounds for setting aside default)
- Roman Catholic Diocese of Lexington v. Noble, 92 S.W.3d 724 (Ky.2002) (striking deficient pleadings has same effect as no pleading; notice issues raised)
- Mingey v. Cline Leasing Service, Inc., 707 S.W.2d 794 (Ky.App.1986) (discusses standard of review for default judgments)
- Dalton v. First Nat. Bank of Grayson, 712 S.W.2d 954 (Ky.App.1986) (default judgment requires sufficient pleadings)
- Crowder v. American Mut. Liability Ins. Co., 379 S.W.2d 236 (Ky.1964) (pleadings must state a cause of action for default judgment)
- Enterprise Foundry & Machine Works v. Miners’ Elkhorn Coal Co., 45 S.W.2d 470 (1929) (knowledge of officer imputes to corporation in procedural context)