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DAWN SPALDING-MCCAULEY T*°°__PPELLANT

 

 

 

h ON APPEAL FROM COURT OF APPEALS ‘
v. . CASE NO_. 20 16-cA-_00042 1
TAYLOR CIRCUIT COURT NO. 14-CI-00047

HON. SAMUEL TODD __SPALDING, JUDGE - . . . APPELLEE
TAYLOR _CIRCUIT COURT ' ' .
AND

BETTY DAMERON, INDIVIDUALLY REAL PARTIES IN INTEREST

AND AS EXECUTRIX OF THE ES_TA_TE
OF PAUL DAMERON; MIKE, BREEN;
AND MIKE BREEN, ATTORNEY A’I` LAW, P.S.C.

AND ' . ` ,2016-30-000463-1\/112

BETTY DAMERON,'INDI_VIDUALLY_ _ ` ' APPELLANTS- _
AND AS EXECUTRIX OF THE ESTATE ' ` '

OF PAUL DAMERON', MIKE BREEN;

_ AND MIKE BREEN, ATTORNEY'AT LAW, R.S.`C

ON APPEAL FROM COURT OF APPEALS
V. CASE NO. 2016-CA-000308
' TAYLOR CIRCUIT COURT NO. 14-CI-0004'7

HON. -SAMUEL TODD SPALDING, JUDGE ' APPELLEES
TAYLOR CIRCUIT COURT§

AND
DAWN' SPALDING-MCCAULEY‘ REAL PARTY: IN INTEREST

MEMORANDUM OPINION OF THE COURT
AFFIRMING

On July 24, 2013, Paul Allen Dameron died as a result of injuries he
sustained while driving his vehicle in 'Taylor County, Kentucky. The injuries l
were caused by a rock that was propelled through Mr. Dameron’s windshield.
' The rock was thrown from a Bush Hog mower operated by Terry Mattingly.

Betty Dameron (“Dameron”) is Mr. Dameron’s surviving spouse and the
Executrix of his EState. She entered into awrittenagreement with attorney
Dawn Spalding-McCauley (“McCauley”) to represent her and the Estate. On
February 8_, 2014, McCauley filed a wrongful death suit on-b`ehalf of her clients
in Taylor Circuit Court. Dameron subsequently terminated McCauley'"s
representation and hired attorney Mike Breen (“Breen”) to handle the case
moving forward. Breen entered his appearance in the case and the court
issued an order permitting McCauley to withdraw as counsel of record.

During the summer of 2`014, Breen entered into a settlement agreement
with Mattingly’s insurance carrier for $1.,000,000.00 and also entered into an
agreement with Paul Dameron’s insurance provider for $100,000.00. Breen
received $385,000.00 in attorney fees plus additional expenses.

On September 3, é014, Breen filed a motion to apportion the proceeds of
the wrongful death claim because Dameron and her step-daughter could not
agree on the appropriate dispensation of the proceeds. McCauley, Dameron’s
first attorney, also filed a motion to intervene under the theory of 'quantum

meruit and to attach the attorney fees paid to Breen. 'I~`he trial court entered an

2

order allowing McCauley to intervene. McCauley also filed a notice of an
attorney lien. The court ordered that the proceeds of the wrongful death action
and"attorney fees be held by the court pending further orders.

l)ameron subsequently filed '-'a'KBA complaint against lVIcCauley.
Discovery revealed that Breen’s office assisted in the preparation of the ItBA
complaint As a result, McCauley filed a motion to compel the production of` all
written correspondence between Breen and Dameron regarding the alleged
breach of McCauley’s ethical duties.

The trial court granted the motion to compel and concluded that the
attorney-client privilege was waived because Breen and Dameron had made the
communications_an issue by alleging that McCauley had been discharged for
cause as a defense to McCauley’s quantum meruit claim. See Baker v.
Shapero, 203 S.W.Sd 697 (Ky. 2006). Breen filed a motion to reconsider which
was denied by the trial court.

The parties filed cross petitions, each seeking a writ of prohibition. The
Court of Appeals denied the`writ requests and the parties appealed to this
Court. Case Nos. 2016-SC-000462;MR and 2016-SC~000463-MR.» Having
reviewed lthe facts and the law, we affirm the Court of Appeals’ denial of the
petitions. .

Procedural Issues

Dameron and Breen have filed motions for oral argument Having v

considered the motions, the responses, and being otherwise sufficiently

advised, the parties’ motions for oral argi.iment are hereby DENIED. On its v

own motion, the Court orders that Case Nos. 2016-SC-000462-MR and 2016-
_SC-_OO_O463-MR are hereby CONSOLIDATED. ` _ g \-

1 Standard.of` Review _

An appellate court has discretion to grant _a writ where a trial court is
proceeding within its jurisdiction upon a showing that the court is: 1) acting or
is about to act erroneously; 2) there exists no adequate‘remedy by appeal or
otherwise, and 3) great injustice and irreparable injury will result if the petition
is not granted. Hoskins v. Mariclez 150 S.W.Sd` 1, lO (Ky. _2004). life review the l
Court of Appeals’ determination under an abuse of discretion standard.
sowders v_.- Leuiis, 241 s.w.ad 3.19,' 322 (Ky. 2007). -

case ivo. 2016-sc#463_-MR

Breen and Dameron seek a writ “prohibiting the trial court from
enforcing any orders requiring Dameron or Breen to testify about or disclose
the confidential communications, and prohibiting him from enforcing any
orders requiring Mr. Breen to withhold his fee.” They argue that the
compulsion of` this information violates the attorney-client privilege We have
previously held that “v_iolation of a privilege satisfies both the requirement of no
adequate remedy by appeal', because privileged information cannot be recalled
once it has been disclosed,’ and the substitute requirement in ‘special cases’
that the administration of justice would suffer.” Collins v.'Braden; 384 S.W.3d
154, 158_ (Ky. 2012)l (citing St.~Luke Hos'pitals, Inc. v. Kopowsk,i, 160 S.W.3d
7'7_1, 775 (Ky. 2005)). Because the present case alleges a violation of the

attorney-client privilege, it is proper f`or writ review. ' n

Vlie begin by noting that the trial court specifically ordered the production
of “all written correspondence, including emails, between [Breen] and Betty
Dameron as it pertained to any alleged breach of attorney McCauley’s ethical
duty to Betty Dameron.” The order continued as follows: “the Court concludes _
that attorney McCauley should have-the ability to cross-examine attorney
Breen concerning the dismissal [of the defendant Bush Hog] because such
questions _will be relevant and fundamental fairness requires same.” Therefore,
Breen and Dameron’s_ broad assertion that the court ordered them “to testify"’
about the confidential communications at issue here is unfounded. 4

KRE 503 provides: “A client has a privilege to:ref`use to disclose and to
prevent any other person from disclosing a confidential communication made
for the purpose of facilitating the rendition of professional legal services to the
client[.]”' However, KRE. 503 [d)(3] states that there is no privilege for “a
communication relevant to an issue of breach of duty by a lawyer lto the client
or by a client to the lawyer[.]” fn SM v. Engle, we observed that “a client %vaives
the privilege if he . . . voluntarily discloses or consents to disclosure of any
significant part of the privilege matter.’_ This waiver may be explicit, but it may
also be implied.” 328 S.W.Sd 134, 188 (Ky. 2010) (Internal footnotes omitted).
The `Court of Appeals applied our ruling in Engle- in _its analysis of the present
case‘.

As the trial court noted, Breen did not purport to represent
Dameron in the KBA complaint proceeding The KBA complaint -
was written and signed by Dameron and not by Breen. Theref`ore,
we conclude that any communications between Dameron and
Breen regarding the`KBA complaint were not for the purpose of
“facilitating the rendition of professional legal services.” Further,
the communications at issue concerned the breach of a duty by

5 ,

McCauley to Dameron. Therefore, there is no privilege under KRE

503(d)(3). More'over, even if the privilege applied, such privilege

was waived because Dameron had placed the communications at'

issue by asserting that McCauley Was terminated for cause in

defense to the quantum meruit claim. We cannot conclude that

the_ trial court abused its discretion by rejecting the claim of

privilege
We agree with the Court of Appeals’ reasoning and conclusion.'

Breen and Dameron also request a writ prohibiting the trial court from
enforcing its order withholding Breen’s attorney fees pursuant to KRS 425.01 1.
They argue that the court’s order constitutes an unconstitutional taking of
property resulting in irreparable injury. As correctly lnoted by the Court of
Appeals, however, “the validity of prejudgment attachments may be adequately
remedied upon direct appeal._” Therefore, Dameron and Breen have failed to
demonstrate the lack of an adequate remedy by appeal. This issue also fails to
satisfy our “special case” exception.

gee No. -2016-sc-462-1v_1_R

Attorney McCauley argues the trial court acted outside its jurisdiction
when it ordered a jury trial on her quantum meruit claim. She alternatively
~ argues that the trial court acted erroneously within its~ jurisdiction by ordering
a jury trial. McCauley specifically alleges that quantum meruit seeks'an
equitable remedy for which there is no right to a jury trial.

d We agree with the Court of Appeals’ conclusion that “the circuit court
clearly has subject-matter jurisdiction over cases involving a claim of quantum
meruit;-” Therefore, we must determine whether relief is available under the '

second class of Writ actions-where the trial court was acting within its

jurisdiction.

- It: is well-established that v“[t]he right to trial by_ jury has occupied a
central place in our jurisprudence..” B.F.M. Bldg., Inc. v. Tn'ce, 464 S_.W.2d 617,
619 (Ky_. 1971). In civil cases, however, “Kentucky law recognizes exceptions to
the right to a jury, including causes of action at common law that would have
been regarded as arising in equity rather than law.”' Daniels v. CDB Bell, LLC,
300 S.W.3d 204, 210 (Ky. App. 2009)' '[citing Reese's Administrator v.
Youfsey,llS Ky. 839, 69 S.W._708 (Ky. 1902)); and Steelvest, Inc. v. Scansteel
Serz)ice Center, Inc., 908 S.‘W.Qd 104, 108 (Ky. 1995). ’f‘herefore, “[i]f the nature
of the issues presented is essentially equitable no jury trial is available Id.
(citing Meyers v. Chapman Printing Co., Inc., 840 S.W.2d 814 (Ky. 1992)).

Although the underlying issue in Daniels was a claim seeking to pierce
the corporate veil, it provides an apt analogy to the present case.-. Quantum
meruit is a common law action in equity. And although .we have never
addressed this issue directly, we have previously embraced the lCourt of
Appeals’ decision in Daniels and adopted much of its language verbatim. See
Schultz v. General Electric Healthc`are Financial Seri)ices Inc., 360 S.W.3d 171,
174-76 (Ky. 2012). l

Furthermore, We stated in Baker v. Shaperothat “when an attorney

employed under a contingency fee contract is discharged'without cause before
completion of the contract, he or she is entitled to fee recovery on a quantum l
meruit‘basis only, and not on the terms of the contract.” 203 S.W.3d at 699.
Se'veral Kentucky cases indicate that this determination is most appropriately
decided by the trial court. See id.; and e.g., Lofton v. Fairmont Specialty

rnsurdnce Managers, Inc., 367 s.w.3d 593 (K_y. 2012).
7

Therefore, we agree that the trial court committed clear error here by
ordering this case tried before a jury. H_owever, in order to prevail on her writ
petition, McCauley must demonstrate that there exists no adequate lremedy by
appeal or otherwise, and that a great injustice and irreparable injury will result
if the petition is not granted. McCauley asserts that there is no adequate
remedy by appeal here because the bar complaint against her would be
admitted as evidence in the jury trial and that attorney discipline matters are
confidential unless public sanction is imposed. Supreme Court 'Rule (SCR)_
3.150. g

We‘have previously defined “no adequate remedy by appeal or otherwise”
to mean- that the injury to be suffered “could not therefore be rectified in
subsequent proceedings in the case .” Bender v. Eaton, 343 S.W.2d 799 , 802
`(Ky. 1961). According to McCauley, her reputation in the community would be
diminished if this information was made public. McCauley also argues that
jurors are not qualified to make equitable determinations .

As correctly noted by the Court of Appeals, “[j]uries are routinely
expected to adjudge the conduct of attorneys in complex situations Such as
legal malpractice cases.”_ We do not believe the mere evidence that a bar
complaint has been filed against McCauley is sufficient to cause irreparable
' harm which justifies a writ. live also note that the trial court-entered an agreed
order sealing any documents referring to the KBA file and reserving the right to
rule on the admissibility of any information pertaining to the KBA file prior to
the jury trial. What is critical to our analysis here, however, is that McCauley

may appeal the trial court’s jury trial order and, if successful, she may retry
_ 8

the case before the trial court without a jury. Therefore, there is a clear and
adequate remedy by appeal here Compare Commonwealth'v. Green, 194
S.W.3d 277, 280 (Ky. 2006) (“If the district court proceeds with a bench tiial,
as has been ordered, jeopardy will attach and retrial by a jury will be
prohibited under KRS 505.030. This alone is sufficient to demonstrate the lack
of an adequate remedy by appeal.”). .

Moreover; there is no great injustice and irreparable injury here. We
have defined “great' and irreparable” injury as ~“something of a ruinous
nature.” Bender, 343 S.W.2d at 801. Similar, to the previous issue, `we cannot
conclude that the potential for publicity here would be “ruinous” to ‘McCauley.

McCauley also insists that this case satisfies the “special case” exception
to our writ standard l-Iowever, “our case law is clear that the certain-special-
'case_s exception only .supplants the requirement that a petitioner prove .
irreparable harm in the absence of a writ, not the requirement that there be no
adequate remedy by appeal or otherwise.” Ridge_way Nursing & ltehabflitation.
Facility, LLC v. Lane, 415 S.W.3d 635, 641-42 (Ky. 2013) (citing Bender, 343
S.W.2d at 80l). As previously discussed, McCauley has failed to demonstrate
the absence of an adequate remedy on appeal. Accordingly, the Court of
Appeals did not abuse its discretion in denying lVchauley’s petition,

Although our writ standard has not been satisfied here, we are compelled
to repeat our strong admonition that the trial judge is committing “clear error”
if he proceeds with a jury trial on -a quantum meruit claim. The only role a jury :
could possibly have in this action in equity would be as an advisory jury on

issues of fact pursuant to Kentucky Rule of Civil Procedure 39.03. ,See Barrier
9

v. Brewster, 349 S.W.3d 823 (Ky. 1961) (the “issues” that can be tried by an
advisory jury are only issues of fact and the judge cannot delegate his
discretion or equitable function). 4

l Conclusion n

For_ the foregoing reasons,' we affirm the Court of Appeals’ denial of the
petitions seeking a .writ of prohibition filed in Case Nos. 2016-SC-000462-MR
and 2016-sc-000463-MR.

All sitting. All concur.

COU_NSEL FOR APPELLANT/REAL PARTY IN INTEREST, DAWN SPALDING-
MCCAULEY:

David A. Nunery
Steven Casey Call
NUNERY 85 CALL, PLLC

` APPELLEE:

" Hon. Samuel To.dd Spalding
Judge, Taylor Circuit Court

CO_UNSEL FOR APPELLA`NT/REAL PARTY IN INTEREST, BETTY DAMERON,
INDIVIDUALLY AND AS EXECUTRIX OF THE ESTATE OF PAUL DAMERON:

Michael Anthony Breen
Michael Anthony Breen, Attorney at Law, PSC

'COUNSEL F`OR APPELLANTS/REAL PARTIES IN INTEREST, MIKE BREEN
AND MIKE BREEN, ATTORNEY AT LAW, P. S. C.:

Michael Anthony Breen
Attorney at Law

James Hadden Dean
Sheehan, Barnett, Dean, Pennington, Little 85 Dexter, PSC

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