               NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                          File Name: 14a0681n.06

                                          No. 13-5988                                FILED
                                                                                Sep 02, 2014
                         UNITED STATES COURT OF APPEALS                     DEBORAH S. HUNT, Clerk
                              FOR THE SIXTH CIRCUIT


KNC INVESTMENTS, LLC, a California                 )
Limited Liability Company,                         )
                                                   )
       Plaintiff-Appellant,                        )      ON APPEAL FROM THE UNITED
                                                   )      STATES DISTRICT COURT FOR
v.                                                 )      THE EASTERN DISTRICT OF
                                                   )      KENTUCKY
LANE’S END STALLIONS, INC., a Texas                )
Corporation,                                       )
                                                   )
       Defendant-Appellee.                         )      OPINION


BEFORE: WHITE, DONALD, and O’MALLEY, Circuit Judges.*


       BERNICE BOUIE DONALD, Circuit Judge.                 The instant appeal involving KNC

Investments, LLC (“KNC”) and Lane’s End Stallions, Inc. (“Lane’s End”) arose following this

Court’s remand to the district court to determine whether subsequent events mooted the issues

KNC raised in its prior appeal. See KNC Invs., LLC v. Lane’s End Stallions, Inc., 504 F. App’x

467, 467-68 (6th Cir. 2012). On remand, the district court found that no live case or controversy

remained and accordingly granted Lane’s End’s motion to dismiss the case for lack of subject-

matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). For the following

reasons, we AFFIRM the judgment of the district court.


*
 The Honorable Kathleen M. O’Malley, United States Court of Appeals for the Federal Circuit,
sitting by designation.
No. 13-5988
KNC Invs., LLC v. Lane’s End Stallions, Inc.

                                                I.


       Lane’s End serves as Syndicate Manager for the owners of interests in the Lemon Drop

Kid Syndicate (“the Syndicate”). Lemon Drop Kid is a Thoroughbred horse. The agreement

establishing the Syndicate transferred ownership of Lemon Drop Kid from the original, single

owner into syndicate form to provide for the horse’s management and supervision.               The

Syndicate consists of forty equal fractional ownership interests (“Fractional Interests”). A holder

of a Fractional Interest is an Owner. Each Owner has various rights under the agreement,

including breeding rights.


       On February 28, 2011, KNC purchased Fractional Interest No. A05 in the Syndicate from

its previous Owner. At the time of this purchase, the Original Syndicate Agreement (“Original

Agreement”), effective November 30, 2000, governed the rights and responsibilities of the

Owners and the Syndicate Manager. The Original Agreement contained language providing that

it could be “altered, amended or modified with the affirmative vote of the Owners holding 34 of

the 40 Fractional Interests.”


       In early March of 2011, KNC began making demands of Lane’s End regarding the other

Owners of Fractional Interests in the Syndicate. Specifically, KNC desired to obtain the names

and contact information of the other Owners. On March 8, 2011, Lane’s End responded to

KNC’s requests. Lane’s End indicated that it would seek permission from the other Owners in

the Syndicate to disclose their identities and contact information pursuant to section 6.1 of the

Original Agreement, which provided that a majority vote of the Owners of the Fractional

Interests would decide any question submitted. All the other Owners except KNC voted against




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KNC Invs., LLC v. Lane’s End Stallions, Inc.

disclosing their identities and contact information, and Lane’s End refused to provide such

information to KNC.


       After the other Owners rebuffed KNC’s requests for information, on March 22, 2011,

KNC filed suit against Lane’s End, as Syndicate Manager, in the United States District Court for

the Eastern District of Kentucky, asserting four claims for relief and seeking declaratory relief,

damages, and complete accounting of the Syndicate’s financial records. In November of 2011,

the district court granted both Lane’s End’s motion to dismiss some of KNC’s claims and Lane’s

End’s motion for summary judgment as to KNC’s other claims. Following the district court’s

denial of KNC’s motion to reconsider its November 2011 decision, KNC appealed.


       Before this Court adjudicated KNC’s prior appeal, the other thirty-nine Owners of

Fractional Interests in the Syndicate voted to amend the Original Agreement and expressly to

ratify Lane’s End’s past actions as Syndicate Manager. Lane’s End then filed a motion to

dismiss KNC’s appeal as moot based on the Amended Syndicate Agreement (“Amended

Agreement”). KNC Invs., 504 F. App’x at 467. This Court remanded to the district court to

determine in the first instance whether the Amended Agreement mooted KNC’s claims. Id. at

468.   On remand, the district court found that no live case or controversy remained and

accordingly granted Lane’s End’s Rule 12(b)(1) motion to dismiss for lack of subject-matter

jurisdiction. KNC again appealed to this Court.




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No. 13-5988
KNC Invs., LLC v. Lane’s End Stallions, Inc.

                                                II.


                                                A.


       In granting Lane’s End’s motion to dismiss for lack of subject-matter jurisdiction, the

district court decided only the question of whether KNC’s claims are now moot in light of the

Amended Agreement. Because the district court considered only the issue of mootness on

remand, we confine our review to that issue. Wright v. Holbrook, 794 F.2d 1152, 1157 (6th Cir.

1986) (“[T]he general rule is that this court will not consider issues not raised in the district

court.”); see also Norfolk & W. Ry. Co. v. City of Oregon, 210 F.3d 372, at *4 (6th Cir. 2000)

(Table) (“The district court limited its remand to that issue and, likewise, our review is similarly

limited.” (footnote omitted)).


       We generally review de novo a district court’s decision to dismiss for lack of subject-

matter jurisdiction under Rule 12(b)(1). Howard v. Whitbeck, 382 F.3d 633, 636 (6th Cir. 2004).

If the lower court, however, “does not merely analyze the complaint on its face, but instead

inquires into the factual predicates for jurisdiction, the decision on the Rule 12(b)(1) motion

resolves a ‘factual’ challenge rather than a ‘facial’ challenge, and we review the district court’s

factual findings for clear error.” Id. (citing RMI Titanium Co. v. Westinghouse Elec. Corp.,

78 F.3d 1125, 1133-35 (6th Cir. 1996); United States v. Ritchie, 15 F.3d 592, 598 (6th Cir.

1994); Ohio Nat’l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990)).


       Lane’s End’s challenge to the existence of subject-matter jurisdiction in this case is a

factual one because the district court analyzed the complaint in light of the Amended Agreement,

which Lane’s End contends deprives the court of a “factual predicate[]” for jurisdiction. Id.

Language from this Court’s prior order buttresses our conclusion: “Perhaps this case is moot, or
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No. 13-5988
KNC Invs., LLC v. Lane’s End Stallions, Inc.

perhaps the new facts relate to the merits of the dispute between KNC and Lane's End. Either

way, . . . the district court is best suited to find any relevant facts and to determine in the first

instance whether a live controversy remains.” KNC Invs., 504 F. App’x at 468. We therefore

review the district court’s factual findings for clear error and its legal conclusions de novo. See

Howard, 382 F.3d at 636.


                                                 B.


       This Court has stated that “‘[t]he test for mootness is whether the relief sought would, if

granted, make a difference to the legal interest of the parties.’” Wedgewood Ltd. P’ship I v. Twp.

of Liberty, 610 F.3d 340, 348 (6th Cir. 2010) (quoting Ford v. Wilder, 469 F.3d 500, 504 (6th

Cir. 2006)). The “heavy burden of demonstrating mootness” lies with the party claiming that the

case is moot. Cleveland Branch, NAACP v. City of Parma, 263 F.3d 513, 530-31 (6th Cir. 2001)

(citing Cnty. of L.A. v. Davis, 440 U.S. 625, 631 (1979)). We agree with the district court that

Lane’s End met its burden to prove the mootness of this controversy in light of the Amended

Agreement, which now expressly ratifies Lane’s End’s past conduct.


       KNC’s Amended Complaint asserts four claims against Lane’s End. Count I seeks a

declaratory judgment regarding KNC’s alleged rights to inspect the Syndicate’s books and

records, to an un-redacted purchase offer, and to information regarding the advancement of

Syndicate funds based on the Original Agreement. Count II seeks a declaratory judgment

regarding KNC’s alleged right to inspect the Syndicate’s books and records based on the

Kentucky Business Corporations Act, Ky. Rev. Stat. Ann. § 271b.16-020. Count III seeks

compensatory and punitive damages for Lane’s End’s alleged violations of its fiduciary duties to

the Owners of the Syndicate based on the Original Agreement. Count IV seeks a full and

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No. 13-5988
KNC Invs., LLC v. Lane’s End Stallions, Inc.

complete accounting of all Syndicate funds based on Kentucky’s law of agency and the Original

Agreement. In the prior appeal, this Court affirmed the district court’s dismissal of Count II.

KNC Invs., 504 F. App’x at 468 (“We thus need no additional facts to conclude that the district

court correctly rejected KNC’s claims under the Business Corporations Act.”). The only claims

remaining on remand, then, were those KNC asserted based on the Original Agreement.


       Events that transpired after KNC filed its Amended Complaint, however, prevent it from

asserting any claims under the Original Agreement. The other thirty-nine Owners of Fractional

Interests in the Syndicate—all save for KNC—voted in May and June of 2012 to amend the

Original Agreement. The Amended Agreement addresses the actions taken by Lane’s End that

KNC complains of in this litigation. Specifically, the language of the Amended Agreement

confirms that the identities of individual Owners are confidential and Lane’s End cannot disclose

them absent a majority vote. The language of the Amended Agreement also expressly ratifies

the actions taken by Lane’s End that KNC alleges violated its rights under the Original

Agreement. Kentucky law permits such ratification, even with the consent of a simple majority

of the owners. See Weisbord/Etkin/Goldberg v. Gainesway Mgmt. Corp., No. 2007-CA-000280-

MR, 2008 WL 820950, at *5-6 (Ky. Ct. App. Mar. 28, 2008) (“The appellants provide no

convincing authority in law or in the express language of the Agreement to support the view that

such a post facto approval of the transfer of one share must be approved by all the members of

the syndicate.”).1




1
 We recognize that the Weisbord court reached this conclusion in a case where the syndicate
agreement was not amended, which is different from the situation here. We cite this case only to
demonstrate that the other Owners of Fractional Interests in the Syndicate were permitted under
Kentucky law to ratify Lane’s End’s past conduct without KNC’s consent.
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No. 13-5988
KNC Invs., LLC v. Lane’s End Stallions, Inc.

        Accordingly, the district court’s factual conclusion—based on the affidavit submitted by

Thomas Hyams, Secretary and Treasurer of Lane’s End—that the other thirty-nine Owners in the

Syndicate followed the proper procedures for ratifying Lane’s End’s prior actions is not clearly

erroneous. KNC failed to present probative evidence to the district court rebutting Hyams’

affidavit, and the Amended Agreement specifically ratifies all of Lane’s End’s past actions. This

Court thus cannot grant any relief that “would . . . make a difference to the legal interest of the

parties.” Wedgewood, 610 F.3d at 348 (quoting Ford, 469 F.3d at 504).


                                                C.


        KNC nonetheless contends that the district court committed two legal errors in granting

Lane’s End’s Rule 12(b)(1) motion to dismiss. First, KNC argues that the district court erred by

denying its request for discovery on remand because KNC “should have been given an

opportunity to investigate how the amendments occurred and whether Lane’s End went beyond

its role as Syndicate Manager in seeking and obtaining the amendments.” Appellant Br. at 38.

Second, KNC argues: “Lane’s End could not effectuate an amendment to the Original Syndicate

Agreement without the consent of one of its parties (KNC), especially when its attempt to do so

was intended to void certain provisions of that contract that existed when KNC agreed to become

a party to it.” Id. at 42.


        The district court properly rejected KNC’s request for discovery. In Chrysler Corp. v.

Fedders Corp., 643 F.2d 1229 (6th Cir. 1981), this Court held that whether or not to allow

discovery prior to deciding a motion to dismiss for lack of jurisdiction is within the discretion of

the district court. Id. at 1240 (“A ruling by the trial court limiting or denying discovery will not

be cause for reversal unless an abuse of discretion is shown.”). The instant case is analogous to

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No. 13-5988
KNC Invs., LLC v. Lane’s End Stallions, Inc.

Chrysler Corp. because KNC did not present any probative evidence to the district court to

support its allegations that Lane’s End acted improperly during the amendment process in May

and June of 2012. See id. (“Inasmuch as Chrysler failed to offer any factual basis for its

allegations of conspiracy, it was well within the trial court's discretion to deny Chrysler's request

for discovery.”). The district court therefore did not abuse its discretion in denying KNC’s

discovery request.


       KNC’s second argument, that the other Owners of the Syndicate could not amend the

Original Agreement without KNC’s consent, lacks merit.            In Kentucky Home Mutual Life

Insurance Co. v. Leitner, 196 S.W.2d 421 (Ky. 1946), Kentucky’s highest court held the

opposite. Where a contract contains a provision for amendment, even if that provision allows for

unilateral modification by only one party, there is no blanket requirement under Kentucky law

that all parties must consent to an amendment before it binds them. See id. at 423 (“It is

stipulated that the insured was bound by the original reinsurance agreement. Since it provided

for amendments thereto, he was likewise bound by the amendments, unless the Company was

estopped or unless a consideration separate and distinct from the original consideration is

required to support the amendment.”). KNC’s assent to the amendment provision in the Original

Agreement thus precludes it from challenging the validity of subsequent amendments enacted

pursuant to that provision, absent certain exceptions not present in this case. See id. (requiring

the objecting party to “accept the contract as it was made”).2 Because Kentucky law does not

prohibit the other thirty-nine Owners of Fractional Interests in the Syndicate from ratifying



2
 Because we conclude that the other thirty-nine Owners of Fractional Interests in the Syndicate
properly ratified Lane’s End’s conduct, we do not address whether the Owners properly could
amend the agreement retroactively.
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No. 13-5988
KNC Invs., LLC v. Lane’s End Stallions, Inc.

Lane’s End’s conduct without KNC’s consent, the district court did not err when it granted

Lane’s End’s motion to dismiss for lack of subject-matter jurisdiction.


                                               III.


       Accordingly, we AFFIRM the judgment of the district court.




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No. 13-5988
KNC Invs., LLC v. Lane’s End Stallions, Inc.

       HELENE N. WHITE, Circuit Judge, concurring and dissenting.

       The majority opinion concludes that KNC’s claims against Lane’s End are moot because

the Amended Agreement “now expressly prohibits the relief sought by KNC.” Maj. Op. at 5. I

respectfully dissent from that determination. I would, however, affirm because I agree with the

district court’s dismissal on the merits.

                                                 I.

       KNC brought four claims in its amended complaint: (I) for a declaratory judgment

regarding KNC’s alleged rights (a) to inspect the Syndicate’s books and records, (b) to an un-

redacted purchase offer, and (c) to information regarding the advancement of Syndicate funds to

one Owner, all based on the Original Agreement; (II) for a declaratory judgment regarding

KNC’s alleged right to inspect the Syndicate’s books and records under the Kentucky Business

Corporations Act, Ky. Rev. Stat. Ann. § 271b.16-020; (III) for compensatory and punitive

damages for Lane’s End’s alleged violations of its fiduciary duties to KNC, based on Lane’s

End’s (a) refusal to provide KNC full access to the books and records, (b) advancing Syndicate

funds to one Owner, and (c) polling and attempting to influence the Owners to “ratify” its

conduct; and (IV) for an accounting of all Syndicate funds based on Kentucky’s law of agency

and the Original Agreement. The district court dismissed the claims, and KNC appealed.

       While KNC’s appeal was pending, thirty-nine of the forty members of the Syndicate

voted to amend the Syndicate Agreement and to ratify Lane’s End’s challenged conduct. The

Amended Agreement makes its changes effective retroactive to the date of the adoption of the

Original Agreement and purports to supersede that Agreement entirely. This court affirmed the

dismissal of Count II and remanded the case to the district court to determine whether the

Amended Agreement rendered moot KNC’s remaining claims. On remand, the district court


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KNC Invs., LLC v. Lane’s End Stallions, Inc.

found that a live controversy no longer exists between the parties because the Amended

Agreement “now expressly bars the exact relief requested by KNC in its original suit for

declaratory relief seeking a right to inspect the books and records of the Syndicate,” and because

the Owners “expressly ratified Lane’s End’s actions in not providing KNC with their identities

and contact information.” The district court did not separately address KNC’s claim for damages

except that it rejected a new argument that KNC made, post-remand, that Lane’s End had

continued to engage in conduct contrary to its fiduciary duties when it wrote the Owners and

asked them to approve the Amended Agreement. The district court found that argument barred

by specific language in the Amended Agreement providing that the Syndicate Manager can

express its views to Owners regarding matters in issue.

         In this appeal, KNC appeals only the district court’s determination that Count III, its

claim for damages, is moot.3 It argues that the district court should have granted its request for

discovery into the validity of the process used to amend the Original Agreement, and that the

other Owners of the Syndicate could not amend the Original Agreement without KNC’s consent,

and could not “effectively and after-the-fact ratify” Lane’s End’s breach of the Original

Agreement on KNC’s behalf. I agree with the majority that the district court had the discretion

to deny further discovery, but I do not agree that the Amended Agreement renders KNC’s

damages claim moot.




3
 Lane’s End contends that KNC waived appeal of Count III by failing to brief it in its opening brief in the first
appeal in this case, and that therefore KNC has waived appeal of all its claims. I disagree. Count III is a claim for
punitive and compensatory damages based on the allegedly wrongful conduct described in Count I. In its opening
brief in the first appeal, KNC stated “[t]his Appeal relates primarily to the District Court’s dismissal of Count I” and
asked this court, if it found reversal warranted on Count I, to remand for the district court for determination of the
remaining counts “based upon the outcome of Count I.” Because KNC made arguments relevant to the reversal of
Count III in its opening brief in the first appeal, and asked for reversal of the district court’s decision on that count, I
would not find that it waived appeal of the claim.

                                                          - 11 -
No. 13-5988
KNC Invs., LLC v. Lane’s End Stallions, Inc.

                                                II.

       As KNC apparently concedes, its claims for declaratory and injunctive relief under the

Original Agreement are now moot because the Original Agreement no longer exists to enforce.

See KNC Br. 6 n.2 (stating it does not appeal the dismissal of those claims). But the Owners’

adoption of the Amended Agreement does not necessarily moot KNC’s claims for damages

because this court can still redress a past violation of the Original Agreement by awarding

damages. See Wedgewood Ltd. P’ship I v. Twp. of Liberty, 610 F.3d 340, 348 (6th Cir. 2010)

(“‘The test for mootness is whether the relief sought would, if granted, make a difference to the

legal interest of the parties.’”) (citation omitted); see also 13C Fed. Prac. & Proc. Juris. §

3533.3 (3d ed.) (“Untold numbers of cases illustrate the rule that a claim for money damages is

not moot, no matter how clear it is that the claim arises from events that have completely

concluded without any prospect of recurrence.”).

       Lane’s End asserts, essentially, two reasons that the Amendment Agreement nonetheless

renders KNC’s damages claims moot: (1) in the Amended Agreement, the Owners ratified, i.e.

retroactively sanctioned, all the conduct of Lane’s End that KNC claims was in violation of the

Agreement and Lane’s End’s fiduciary duties; and (2) the Amended Agreement purports to

supersede the Original Agreement entirely, as though it never existed.

   A. Ratification

       The Original Agreement provides that “the relationship of the Owners to the Syndicate

Manager [is] that of principal and agent.” Under Kentucky law, a principal may ratify or affirm

its agent’s otherwise unauthorized conduct. See Stewart v. Mitchell’s Adm’x, 301 Ky. 123, 126

(1945) (“As applied to the law of agency, ratification is the affirmance of an act by one for or in

behalf of another at a time when he had no authority to do the act for the one in whose name it


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No. 13-5988
KNC Invs., LLC v. Lane’s End Stallions, Inc.

was done.”). “An otherwise-effective ratification eliminates claims that the principal has against

the agent, including claims for breach of fiduciary duty.” Restatement (Third) of Agency §

4.02(b). Accordingly, if KNC ratified Lane’s End’s conduct, all KNC’s claims against Lane’s

End would be extinguished, and therefore moot, even claims for damages.

       The Original Agreement provides that a vote of 34 out of 40 Owners may alter, amend, or

modify the Agreement, and a simple majority of Owners may resolve “all questions properly

submitted.” The Owners’ express statement in the Amended Agreement that they ratified Lane’s

End’s conduct is undoubtedly effective to ratify the conduct on behalf of the Owners who

participated in the vote to amend, but the question is whether it is effective with respect to KNC.

       The majority opinion concludes that Kentucky law permits a simple majority of syndicate

owners to ratify an agent’s conduct on behalf of the remaining owners.              Maj. Op. at 6

(“Kentucky law permits such ratification, even with the consent of a simple majority of the

owners.”) (citing Weisbord/Etkin/Goldberg v. Gainesway Mgmt. Corp., No. 2007-CA-000280-

MR, 2008 WL 820950, at *5–6 (Ky. Ct. App. Mar. 28, 2008), for its observation that “[t]he

appellants provide no convincing authority in law or in the express language of the Agreement to

support the view that such a post facto approval of the transfer of one share must be approved by

all the members of the syndicate.”). But the quoted sentence in Weisbord was not a holding; it

was dicta. In Weisbord, the plaintiffs challenged the sale of one member’s Fractional Interest,

arguing that in coordinating the sale, the Syndicate Manager had deviated from the terms of the

Syndicate Agreement governing such sales. Id. at *2. The court affirmed the dismissal of the

plaintiffs’ claims for declaratory and injunctive relief. It found, first, that the plaintiffs were

estopped from challenging the sale because they themselves had sought a waiver from the terms

of the Agreement. Id. at *4. Second, it addressed the plaintiffs’ argument “that the ratification


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KNC Invs., LLC v. Lane’s End Stallions, Inc.

was invalid because it was not approved by all the members of the syndicate, but was approved

only by a majority.” Id. at *6. The court made the observation quoted above that the plaintiffs

had provided “no convincing authority in law or in the express language of the Agreement to

support the view that such a post facto approval of the transfer of one share must be approved by

all the members of the syndicate.” Id. And then in a footnote immediately following that

observation, the court stated: “Regardless of whether the appellants have a valid argument in

this regard, they are without remedy due to estoppel as we have explained above.” Id. at *6 n.3

(emphasis added). Thus, the observation the majority relies on would not bind subsequent

Kentucky courts because it is dicta, see Bd. of Claims of Kentucky v. Banks, 31 S.W.3d 436, 439

n.3 (Ky. Ct. App. 2000), and because it appears in an unpublished decision, see Ky. St. RCP

76.28(4)(c). For a federal court sitting in diversity, like this one, the observation is a relevant

data point, but is not controlling on its own. See Garden City Osteopathic Hosp. v. HBE Corp.,

55 F.3d 1126, 1130 (6th Cir. 1995) (“When deciding a diversity case under state law,” where the

state’s highest court has not decided the question, “a federal court must . . . ascertain the state

law from ‘all relevant data’” including “the state’s appellate court decisions, . . . the state’s

supreme court dicta, restatements of law, law review commentaries, and the majority rule among

other states”) (citations omitted).

       The Kentucky Supreme Court has applied the Restatement (Third) of Agency (2006) to

questions of agency law, see Pannell v. Shannon, 425 S.W.3d 58, 84 (Ky. 2014) (citing §§ 4.01,

4.02 in a discussion of ratification), as well as American Jurisprudence, Second Edition, on

Agency, see Kindred Nursing Centers Ltd. P’ship v. Leffew, 398 S.W.3d 463, 467 (Ky. Ct. App.

2013) (stating that “Kentucky has adopted th[e] understanding of ratification” expressed in 2

Am. Jur. 2d Agency § 209 (2013)) (citing Capurso v. Johnson, 248 S.W.2d 908, 910 (Ky. 1952)).


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KNC Invs., LLC v. Lane’s End Stallions, Inc.

Under the Restatement, the Owners are “coprincipals,” and lack the power to ratify their agent’s

conduct on each other’s behalf. See Restatement (Third) of Agency § 3.14 (“[A]n agent for

coprincipals acts for more than one principal in the same transaction or other matter.

Coprincipals are not hierarchically stratified.”); see also id. § 4.01 (“When there are two or more

coprincipals, each must ratify to be bound.”) (emphasis added). American Jurisprudence is in

accord. See 3 Am. Jur. 2d Agency § 176 (2013) (“If a ratification would bind multiple principals,

each must affirm with knowledge of the acts to be ratified.”) (citing Restatement (Third) Agency

§ 4.06 cmt. b.); see also Kindred Nursing Centers Ltd. P’ship, 398 S.W.3d at 467 (citing § 176

of Am. Jur. as authoritative on a question of agency law).

       KNC did not vote to ratify Lane’s End’s conduct. To resolve the question whether the

Owners’ ratification is effective as to KNC, I would look to the authorities the Kentucky

Supreme Court and Court of Appeals have relied on in published decisions rather than an

unsupported, non-binding observation in an unpublished decision.             According to those

authorities, the Owners lacked authority to ratify Lane’s End’s conduct on KNC’s behalf, and

therefore, the Owners’ ratification could not and did not extinguish KNC’s claims for damages.

   B. Contract

       I would also reject Lane’s End’s contention that the Owners’ purported retroactive

amendment of the contract moots KNC’s claims for damages. Lane’s End cites Kentucky

decisions holding generally that a contract provision allowing for amendment of the contract is

enforceable and binding, see, e.g., Kentucky Home Mut. Life Ins. Co. v. Leitner, 196 S.W.2d 421,

423 (Ky. 1946)); Supreme Lodge K.P. v. Hunziker, 87 S.W. 1134, 1135 (Ky. 1905), but neither

party cites cases addressing whether a contract provision granting one-sided authority to amend

can be reasonably construed to include authority to amend the contract retroactively.


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KNC Invs., LLC v. Lane’s End Stallions, Inc.

       Kentucky follows the general rule of enforcing contracts as written.            See Wehr

Constructors, Inc. v. Assurance Co. of Am., 384 S.W.3d 680, 685 (Ky. 2012) (“‘[A] written

instrument will be enforced strictly according to its terms,’ and a court will interpret the

contract’s terms by assigning language its ordinary meaning and without resort to extrinsic

evidence.”) (quoting Frear v. P.T.A. Industries, Inc., 103 S.W.3d 99, 106 (Ky. 2003). No term

in the Original Agreement confers on the Owners the power to retroactively change its terms.

The Original Agreement provides that it may be “altered, amended, or modified” by thirty-four

out of forty Owners, but says nothing about retroactivity, and the contract does not purport to

govern the parties’ past conduct. Under those circumstances, I see no basis to conclude that the

Owners’ authority to amend the Original Agreement includes the additional extraordinary power

to retroactively amend it to eliminate an Owner’s accrued claim for damages. Cf., e.g., Sec.

Watch, Inc. v. Sentinel Sys., Inc., 176 F.3d 369, 373 (6th Cir. 1999) (declining to give a merger

clause retroactive effect “as no other provision of the later agreement even ‘remotely intimate[d]

that the parties ever contemplated so radical a retroactive renegotiation of their earlier

agreements’”) (quoting Choice Security Sys., Inc. v. AT&T Corp., No. 97–1774, 1998 WL

153254, at *1 (1st Cir. 1998) (unpublished)). To the extent that Lane’s End argues that the

Amended Agreement is probative of the Owners’ understanding of the terms of the Original

Agreement, that is not a contention that renders KNC’s claims moot; it is an argument on one

side of a live controversy.

       I would VACATE the district court’s mootness determination and reach the merits of

KNC’s appeal regarding Count III. In this regard, however, I agree with the district court’s

dismissal. KNC has shown no breach and no damages as relevant to the claims in this case.




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