text:
    KENTUCKY BAR ASSOCIATION, Movant, v. Leo MARCUM, Respondent.
    No. 2010-SC-000105-KB.
    Supreme Court of Kentucky.
    April 22, 2010.
   OPINION AND ORDER

Leo Marcum, KBA Member No. 43870, was admitted to the practice of law in Kentucky in 1971. His bar roster address is P.O. Box 178, Lowmansville, Kentucky 41232. Now before this Court are two KBA files which allege Marcum engaged in professional misconduct. KBA File No. 12492 concerns Marcum’s representation of Ella Pauley, and KBA File No. 11629 concerns Marcum’s representation of Elmer and Evaleena Mullins. The Trial Commissioner’s amended report recommended that Marcum be adjudged guilty of the majority of the charges in both files and that he receive a one-year suspension from the practice of law in Kentucky to run consecutively and separately from sanctions he has received in previous disciplinary matters. Since neither Marcum nor the KBA filed a notice of appeal pursuant to SCR 3.360(4) we now enter a final order pursuant to SCR 3.370(10) adopting the Trial Commissioner’s recommendation.

FINDINGS OF FACT

The Trial Commissioner made the following Findings of Fact which, pursuant to SCR 3.370(10), we adopt as our own.

File No. l&m-ELLA PAULEY

Ella Pauley hired Marcum on April 14, 1999, to represent her in a personal injury claim arising from a car wreck. In September 2000, Marcum filed suit against tortfeasor Barry McClanahan in Fayette Circuit Court. However, the address Mar-cum believed McClanahan lived at was incorrect, and McClanahan was not given notice of the lawsuit nor ever found. Mar-cum apparently made no other effort to contact McClanahan and on October 30, 2002, the Fayette Circuit Court sent Mar-cum a CR 77.02 Notice to dismiss the claim for lack of prosecution. Subsequently, on March 14, 2003, the Fayette Circuit Court dismissed the case for lack of prosecution.

On May 14, 2004, Marcum found a new address for a Barry McClanahan and asked the Fayette Circuit Clerk to issue another summons to the McClanahan at that address. On June 18, 2004, Marcum filed a motion to redocket Ms. Pauley’s case stating that McClanahan had been found. Marcum’s representation that McClanahan had been found, however, was not true. The motion was granted by the Fayette Circuit Court on July 14, 2004.

On July 16, 2004, the McClanahan who was served with notice of the lawsuit called Marcum’s office and talked to someone other than Marcum. This person claimed he was not the McClanahan involved in the accident with Ms. Pauley. Marcum did not follow up after learning this information. In August 2004, Marcum asked the Fayette County Sheriff to locate McClana-han and was eventually told in September 2004 that McClanahan had moved to an unknown address. Marcum apparently made no other efforts to locate McClana-han and the case was subsequently dismissed again since McClanahan was not served.

During all of this, the record indicates that Marcum never notified Ms. Pauley of the notice to dismiss for lack of prosecution, the dismissal, or the reinstatement of her case. Further, Marcum did very little to represent Ms. Pauley and gave most of the work on the case to other staff members. Marcum does admit that he failed to respond to KBA letters and requests for information during its investigation into this matter.

Based on these actions, the Inquiry Commission charged Marcum on December 15, 2005, with five counts of misconduct. Count one alleged a violation of SCR 3.180-1.1 for failure to properly represent Ms. Pauley. Count two alleged a violation of SCR 3.130-1.3 for failure to act with reasonable diligence and promptness in representing Ms. Pauley. Count three alleged a violation of SCR 3.310-1.4(a) for failure to keep Ms. Pauley reasonably informed about the status of her case and failure to comply with her requests for information. Count four alleged a violation of SCR 3.130-3.2 for Marcum’s failure to take reasonable efforts to expedite litigation in Ms. Pauley’s interest. Count five alleged a violation of SCR 3.130 — 8.1(b) for failure to respond to the KBA’s requests for information in connection with this disciplinary matter.

File No. 11629-ELMER AND EVALEENA MULLINS

Sometime in late May or early June, 2003, Elmer and Evaleena Mullins hired Marcum to collect $1,930.00 they paid to builder John Burchett. Marcum called Burchett while the Mullinses were meeting with him and demanded that he return the money. Burchett complied and gave Mar-cum the money within a few days. Mar-cum in return gave the Mullinses a check in the amount of $1,680.00, retaining $300.00 for his services. The Mullinses however returned the check and decided that they wanted to sue Burchett for $4,000.00 to recoup attorney fees and other costs. Marcum agreed to represent them and said he would file suit, charging them a one-third contingency fee. However, Marcum provided no written agreement about costs and attorney fees. No evidence has ever been presented to indicate that Marcum filed suit against Burchett. Mrs. Mullins tried to contact Marcum multiple times in the following months but was not successful. In May or June 2005, Mrs. Mullins asked Marcum to return the $1,630.00 to her. She never heard from him and she never received the money. Evidence indicates that Marcum’s escrow account has less than the $1,630.00 the Mullinses requested.

In June, 2004, the Office of Bar Counsel requested information from Marcum relating to the Mullins’ case. Marcum did not respond. In December 2004, the KBA sent another letter asking for an explanation of the matter and a copy of the escrow record. Marcum did not respond.

On September 9, 2005, the KBA sent Marcum a reminder letter of his failure to respond. This letter also advised him that a review of his escrow account at the Inez Deposit Bank, which the Inquiry Commission had subpoenaed, did not reflect that the money Burchett gave him had been refunded to him. The letter also informed Marcum that his escrow account had a negative balance. Bar Counsel asked Marcum to provide verification that he was keeping money from third parties in his possession in a separate bank account where the bank would notify the KBA if an overdraft occurred. Marcum failed to respond to the letter or any of the KBA’s requests for information.

The record discloses that Marcum co-mingled his personal funds with money belonging to third-parties. At the Trial Commissioner hearing, Marcum admitted that “sometimes we have a lot of money in the escrow account that belongs to me.” Further, evidence presented at the hearing demonstrated that, from his escrow fund, Marcum advanced to individuals who were not entitled to escrow funds at least $1,000.00, loaned himself money of at least $1,500.00, wrote checks to his son for at least $500.00, wrote checks for cash, wrote a check to West Group for $5,342.00, and wrote a check for $4,000.00 to Premier Motors for a van for the business.

Based on these actions, the Inquiry Commission filed charges against Marcum on December 27, 2007, alleging six counts of professional misconduct. Count one alleged a violation of SCR 3.130-1.3 for Mar-cum’s failure to act with reasonable diligence and promptness in representing the Mullinses. Count two alleged a violation of SCR 3.310-1.4(a) for failure to keep the Mullinses reasonably informed about the status of their case and his failure to promptly comply with their reasonable requests for information. Count three alleged a violation of SCR 3.130-1.15(a) for failure to maintain separate accounts for third-party or client property where the bank would notify the KBA in case of an overdraft. Count four alleged a violation of SCR 3.130-1.15(b) for either failing to deliver funds belonging to Burchett or to the Mullinses or hold said funds in a trust until the resolution of the matter. Count five alleged a violation of SCR 3.130-8.1(b) for failure to respond to letters sent by the KBA requesting information on this disciplinary matter. Count six alleged a violation of SCR 3.130-8.1(c) for professional misconduct by taking $1,630.00 that belonged to the Mullinses to file a lawsuit against Burchett, and then failing to file the lawsuit or return the money.

CONCLUSIONS OF LAW

The Trial Commissioner held a hearing on June 4, 2009. Following the hearing, the Trial Commissioner made the following Conclusions of Law in a report filed on December 17, 2009, on KBA Files 12492 and 11629 which we adopt as our own.

File No. 12492-ELLA PAULEY

Marcum violated SCR 3.130-1.1 and SCR 3.130-3.2 by failing to provide competent representation to Ms. Pauley. Marcum gathered sufficient information to obtain an offer on Ms. Pauley’s case and undertook to file a lawsuit against the tortfeasor, but then failed to effectuate proper service and follow up on the lawsuit. After learning that MeClanahan’s service address had expired, Marcum then waited another three and one-half years to try to locate him. Marcum also failed to follow up with the person who received service of the lawsuit, but claimed not to be McClanahan. The case was ultimately dismissed for lack of prosecution. Ms. Pauley was never notified of any of these matters.

Marcum also violated SCR 3.130-1.3 by failing to obtain service of process on McClanahan for three and one-half years, and violated SCR 3.130-1.4(a) by failing to keep Ms. Pauley informed about the status of the matter and promptly complying with reasonable requests for information. Ms. Pauley tried to communicate with Marcum, but there is no compelling evidence that Marcum advised her of the dismissal or the reinstatement either in person or by phone.

And finally, Marcum violated SCR 3.130 — 8.1(b) by failing to respond to three letters from Deputy Counsel at the KBA seeking information about the case.

File No. 11629-ELMER AND EVALEENA MULLINS

Marcum violated SCR 3.130-1.3 by failing to act with reasonable diligence and by failing to take proper safeguards with his clients’ funds. Funds belonging to the Mullinses were co-mingled, spent, and their use was unauthorized. See KBA v. Hall, 173 S.W.3d 621, 625 (Ky.2005). Marcum also failed to act with reasonable diligence with respect to informing the Mul-linses of his fees for representation.

Marcum violated SCR 3.130-1.15(a) by providing improper advances from his bank account. Marcum or his paralegal wrote personal checks to himself without documentation or explanation, he or his paralegal wrote checks to family members (son), without documentation or explanation, and he paid office expenses, all out of his escrow account. Moreover, Marcum did not know if his bank had agreed to notify the KBA of an overdraft.

Marcum violated SCR 3.130 — 1.15(b) by not notifying clients of receipt of funds in which they may have an interest and to promptly deliver such funds to his clients. Marcum notified the Mullinses upon receiving the check from Burchett and attempted to give it to the Mullinses. However, the Mullinses returned the check to Marcum, and requested a lawsuit be filed against Burchett. However, when the Mullinses were unsatisfied with the progress of the lawsuit, and requested the money be returned, Marcum did not comply.

Marcum violated SCR 3.130 — 8.1(b) by failing to respond to a lawful demand for information from a disciplinary authority on this matter.

Marcum violated SCR 3.140-8.3(c) by engaging in professional misconduct related to dishonesty by expending the Mullins-es’ funds as his own.

However, the Trial Commissioner found that Marcum did not violate SCR 3.130-1.4(a) because the record does not contain sufficient proof that the Mullinses were not provided information on the case as requested or that they made requests for information.

CONCLUSION

Based on the above violations, the Trial Commissioner determined that the appropriate punishment was a one year suspension from the practice of law. This conclusion was based in part on the prior disciplinary history of Marcum. Marcum has been reprimanded twice, admonished three times, and suspended once for 181 days. In October 2000, Marcum was publicly reprimanded for violating SCR 3.130-1.4(a) (failure to keep clients informed). See KBA v. Marcum, 28 S.W.3d 861 (Ky.2000). In July, 2005, Marcum received a private admonition for violating SCR 3.130-1.3 (reasonable diligence and promptness in representing a client) and SCR 3.130-8.1 (responding to demands from the disciplinary authority). In 2009, Marcum violated SCR 3.130-1.15(a) (requiring a lawyer to hold client funds separately from his own) and SCR 3.130-8.3(c) (professional misconduct), see KBA v. Marcum, 292 S.W.3d 317 (Ky.2009), and was suspended for 181 days.

Based on the seriousness of the current charges against Marcum, his past disciplinary history, Marcum’s failure to respond to disciplinary authorities, and the fact that Marcum did not clean up the handling of his escrow account, the Trial Commissioner recommends the sanction of a one (1) year suspension from the practice of law, to run consecutively and separately from sanctions in other matters in accordance with SCR 3.360(l)(d). We agree and adopt the recommendations of the Trial Commissioner, pursuant to SCR 3.370(1).

ACCORDINGLY, IT IS HEREBY ORDERED that:

1) Respondent, Leo Marcum, is suspended from the practice of law in this Commonwealth for a period of one (1) year;

2) This sanction shall run consecutively and separately from sanctions in other matters before this Court;

3) If he has not already done so, Respondent shall pay restitution to Elmer and Evaleena Mullins of $1,630.00, representing the balance of funds recovered from John Burchett after the deduction of Respondent’s $300 fee;

4) Respondent shall notify all necessary courts and clients of his suspension in accordance with SCR 3.390. Those notifications shall be made by letter placed in the United States mail within ten days from the date of this Opinion and Order. Mar-cum shall also simultaneously provide a copy of all such letters to the Executive Director of the Kentucky Bar Association. Also, to the extent possible, Marcum shall cancel and cease any advertising activities in which he is engaged;

5) Respondent is directed to pay all costs associated with this disciplinary proceeding, pursuant to SCR 3.450, certified to be in the sum of $2,343.65, for which execution may issue from this Court upon finality of this Opinion and Order.

All sitting. All concur.

ENTERED: April 22, 2010.

/s/ John D. Minton, Jr. Chief Justice


source: Caselaw Access Project

author: /s/ John D. Minton, Jr. SCHRODER, J.,

license: Public Domain

text:
    Jeffrey M. WALSON (Judge, 25th Judicial Circuit of Kentucky), Appellant, v. The ETHICS COMMITTEE OF the KENTUCKY JUDICIARY, Appellee.
    No. 2009-SC-000623-OA.
    Supreme Court of Kentucky.
    April 22, 2010.
   OPINION AND ORDER

I. INTRODUCTION AND FACTUAL SUMMARY.

The Ethics Committee of the Kentucky Judiciary was asked to determine if the Kentucky Code of Judicial Conduct (Code), set forth at Rules of the Supreme Court (SCR) 4.300, prohibits a Kentucky justice or judge from serving as a member of the board of directors or on an advisory board of a financial institution. Revising some of its past opinions, the Committee issued Formal Judicial Ethics Opinion (JE) 118 stating that no justice or judge may serve as either an advisor or member of the board of directors of a financial institution, unless that justice or judge “has invested personal funds in a banking company....”

This Court has reviewed JE-118 under SCR 4.310(4) at the request of Jeffrey Walson, a family court judge in the 25th Judicial Circuit of Kentucky. Judge Wal-son serves on the advisory board of a bank. We conclude that in JE-118, the Committee correctly determined that no member of the state judiciary may serve as an advisor or director for a financial institution. But we further conclude that the Committee erred in JE-118 by making an exception for members of the judiciary who have a personal financial stake in the financial institution they serve.

II. ANALYSIS.

This case presents two questions. First, may a justice or judge, serving at any level of the Kentucky Court of Justice, be a member of the board of directors or of an advisory board of a financial institution? We agree with JE-118 that the answer is no. Having reached that conclusion, we must then decide whether JE-118 correctly made an exception, which allows a justice or judge to serve on a board of a financial institution in which the justice or judge has a personal financial stake. We agree with Judge Walson that the exception is improper.

A. The. General Prohibition Applies to All Members of the Judiciary.

Canon 2 of the Code plainly says that a judicial officer “may properly lend the prestige of the judge’s office to advance the public interest in the administration of justice!,]” but a judge “shall not lend the prestige of judicial office to advance the private interests of the judge or others.... ” Closely related is Canon 4 D(3), which permits a judicial officer to serve as an officer, director, etc., of a business entity, unless that business entity, among other things, is “likely to be engaged in proceedings that would ordinarily come before the judge, or ... [is] likely to be engaged frequently in adversary proceedings in the court of which the judge is a member .... ” Canon 4 D(3) (a) (ii)-(iii).

Banks and other financial institutions are frequent litigants at all levels of the courts of this Commonwealth. And the Canons make no distinction related to the court on which the judicial officer serves. So it would appear beyond dispute that district, circuit (including family court), and appellate judicial officers are all prohibited from serving as officers, directors, etc., for financial institutions.

Of course, we do not believe that any of our conscientious judicial officers across the Commonwealth intentionally lends the prestige of office to the financial institutions on whose boards they serve. But we agree with the Committee’s general conclusion that judicial officers are prohibited by the Canons from serving as directors or advisors of financial institutions because those judicial officers’ service does unquestionably lend the prestige of the judicial offices to those financial institutions.

So we decline to disturb JE-118’s conclusion that the Canons contain a general prohibition against judicial officers serving as advisors, directors, and the like on behalf of financial institutions. Judge Wal-son seems to accept the existence of that general prohibition; but he argues that family court judges — and, as we understand his point, only family court judges— should be exempt from that general prohibition. We disagree.

As Judge Walson notes in his motion for review, financial institutions themselves are not likely to be frequent litigators in family court. But we consider a special exception for family court judges improper for two reasons. First, although not themselves parties, financial institutions will frequently have some interest in the outcome of family court proceedings by virtue of being the repositories of the funds or the holders of debt of the family court litigants. Second, and more importantly, adopting Judge Walson’s position would require us to engage in an impermissible and arbitrary division of the offices of circuit judge and family court judge.

Section 109 of our Kentucky Constitution states, in relevant part, that “[t]he judicial power of the Commonwealth shall be vested exclusively in one Court of Justice which shall be divided into ... a trial court of general jurisdiction known as the Circuit Court....” And a circuit court division designated as a family court “shall retain the general jurisdiction of the Circuit Court and shall have additional jurisdiction as may be provided by the General Assembly.” Ky. Const. § 112(6). So, in simple terms, family court judges are circuit judges. And as we recently noted, “[cjonstitutionally speaking, Kentucky has but one circuit court and all circuit judges are members of that court and enjoy equal capacity to act throughout the state.” Baze v. Commonwealth, 276 S.W.3d 761, 767 (Ky.2008). There is no constitutional basis, therefore, to treat family court judges differently from other circuit court judges. Judge Walson’s argument asks us to divide the indivisible.

The constitutional provisions referenced in this opinion plainly lead to a conclusion that there is also no basis under the Code for us to adopt an arbitrary distinction between circuit judges exercising general jurisdiction and circuit judges exercising family court jurisdiction. Canon 4 D(3)(a)(iii) prohibits a judicial officer from serving as an officer, director, etc., for any business entity “likely to be engaged frequently in adversary proceedings in the court of which the judge is a member.... ” Family court judges are members of the circuit court, and it is indisputable that financial institutions are frequent litigants in circuit court. So the contention that family court judges — and only family court judges — may serve the interests of financial institutions is contrary to both Kentucky’s Constitution and the Code of Judicial Conduct.

The Committee concluded that it was “unable to ascertain any purpose to an Advisory Board other than to lend the judge’s name to enhance the prestige of the institution to enable it to draw more business.” (Internal quotation marks omitted.) Judge Walson takes issue with this conclusion, arguing that it “stems from either a lack of understanding, consideration, or imagination.” We agree that the Committee appears to have used unfortunately broad language in this section of its opinion. It is certainly possible that a judicial officer’s education, training, or previous practice or employment experience could make the judicial officer well qualified to serve as an advisor or director for a financial institution. But Judge Wal-son has not cited to anything specific, apart from his own personal experience, to support his presumption that judicial officers are invariably chosen to serve financial institutions for reasons that have nothing to do with the high offices they hold. Although we do not embrace the broad language used by the Committee, we must reluctantly agree with its conclusion that, at least sometimes, judicial officers are placed on bank boards primarily because they are judicial officers who are popularly elected in the community from which the financial institution draws its customer base.

Although our focus must primarily be upon Kentucky law, we have also examined authority in other state judicial systems for guidance. Unfortunately, there are few reported decisions on this subject. But our conclusion that service as a judicial officer generally precludes simultaneous service as a director or similar officer of a financial institution is in accord with decisions from both the Oklahoma Judicial Ethics Advisory Panel and the Supreme Court of Louisiana.

Finally, we are compelled to note that adoption of Judge Walson’s arguments would permit judicial officers to serve the interests of typically for-profit financial institutions while, by contrast, judicial officers are prohibited by JE-117 from serving as a member of the board of trustees of a public university. It is unnecessary in this opinion to expound on the reasons underlying JE-117, and we intend no criticism of that decision. Instead, we merely point out that adoption of Judge Walson’s arguments would lead to a seemingly incongruous juxtaposition between what a judicial officer (or at least a family court judge) could permissibly do on behalf of a presumably for-profit financial institution with what a judicial officer may not do on behalf of a non-profit public university. That juxtaposition seems illogical and arbitrary and, potentially, could undermine the public’s confidence and trust in the judiciary.

B. No Exception for Having a Personal Financial Stake.

Although we reject his conclusion regarding a special exception for family court judges, we do agree with Judge Wal-son’s argument that the Committee erred in JE-118 by holding that a judicial officer is permitted to serve a financial institution merely because the judicial officer holds stock, or has a similar financial interest, in the financial institution being served. To the contrary, Canon 2 D explicitly forbids such a conclusion because it unquestionably prohibits judicial officers from “lending] the prestige of judicial office to advance the private interests of the judge or others.... ” Additionally, the Ethics Committee’s conclusion seems to run afoul of Canon 4 D(4), which requires a judicial officer to “manage the judge’s investments and other financial interests to minimize the number of cases in which the judge is disqualified.”

Obviously, any director or advisor to a financial institution must seek to further the interests of that financial institution. Babineaux, 341 So.2d at 400. (“The petitioners’ contention that a directorship is a neutral position is untenable. It overlooks the fact that a director owes a fiduciary duty to the corporation. In practical terms, this means a duty to efficiently manage its affairs and promote its business.”). We fail to see how merely owning at least one share of stock in a financial institution overrides the Code so as to function as a virtual free pass for a judicial officer to advance the private pecuniary interests of that financial institution. In other words, there is no distinction in the Canons between being an owner or no-nowner of stock in the financial institution; and the Committee erred by grafting such an unwarranted exception onto the Code.

III. CONCLUSION.

We emphasize that we east no aspersions on Judge Walson or any similarly situated judicial officer who is currently serving as a director or advisor for a financial institution. To the contrary, we trust that Judge Walson and all the judicial officers of this Commonwealth strive scrupulously to follow the requirements of the Code. But our construction of the Code and the Kentucky Constitution leads us to the inescapable conclusion that judicial officers, regardless of their benign intentions, are prohibited from accepting these types of positions with financial institutions. We agree with the Supreme Court of Louisiana that such a prohibition:

serves to reduce the possibility that a judge would, or would seem to, use the prestige of his judicial office to attract business for the financial institution, to eliminate the potential conflict between a director’s fiduciary duty to the corporation and his judicial duties, and to lessen the possibility of conflict of interest for the judge revolving around litigation before the court.

In re Babineaux, 346 So.2d 676, 679-80 (La.1977).

We agree with the Committee that no judicial officer, family court or otherwise, may serve as an advisor, director, or the like for financial institutions. We reject the Committee’s conclusion that a judicial officer may serve as a director or advisor of a financial institution if the judicial officer has a financial stake in that financial institution.

All sitting. MINTON, C.J.; ABRAMSON, CUNNINGHAM, NOBLE, SCOTT, and VENTERS, JJ., concur.

SCHRODER, J., dissents by separate opinion.

ENTERED: April 22, 2010.

/s/ John D. Minton, Jr.

SCHRODER, J.,

DISSENTING.

Because I believe that the language of the Code of Judicial Conduct should be applied to the individual judge and the individual business at issue, I respectfully dissent. I take a broader view of the language of Canon 4 D(3), and read it to be permissive in nature.

This case involves the application of the Code of Judicial Conduct (SCR 4.300). The question asked was whether a Kentucky Judge or Justice, consistent with the Code of Judicial Conduct, could serve as a director on the board of directors or on the advisory board of a financial institution. Governing this situation is SCR 4.300, Canon 4, which states: “A judge shall so conduct the judge’s extra-judicial activities as to minimize the risk of conflict with judicial obligations.” Canon 4 D addresses “Financial Activities” and provides, in pertinent part:

(1) A judge shall not engage in financial and business dealings that:
(a) may reasonably be perceived to exploit the judge’s judicial position, or
(b) involve the judge in frequent transactions or continuing business relationships with those lawyers or other persons likely to come before the court on which the judge serves.
(2) A judge may, subject to the requirements of this Code, hold and manage investments of the judge and members of the judge’s family, including real estate, and engage in other remunerative activity.
(3) A judge may serve as an officer, director, manager, general partner, advisor or employee of any business entity subject to the following limitations and the other requirements of this Code:
(a) A judge shall not be involved with any business entity
(i) generally held in disrepute in the community, or
(ii) likely to be engaged in proceedings that would ordinarily come before the judge, or
(iii) likely to be engaged frequently in adversary proceedings in the court of which the judge is a member or in any court subject to the appellate jurisdiction of the court of which the judge is a member.
(b) A judge involved with any business entity may assist such a business entity in planning fund-raising and may participate in the management and investment of the entity’s funds, but shall not personally participate in the solicitation of funds, the raising of capital or the selling of stock in such a manner as to use or permit the use of the prestige of judicial office for promotion of the business entity.

The question before us was previously presented to the Ethics Committee under the former code and answered in JE-67 and JE-78. In JE-67, the Ethics Committee was asked whether a judge may ethically “serve as a member of an advisory board of a local financial institution.” The Ethics Committee recognized that “[t]he Kentucky Judicial Code of Ethics does not absolutely prohibit judges from serving on the boards of banks.” The Ethics Committee acknowledged that Kentucky has taken a more lenient approach than the ABA Code of Judicial Conduct, and “has not chosen to strictly prohibit judges from being involved in certain businesses such as banks.... ”

Nevertheless, the Committee decided that other provisions of the Code prohibited service on this advisory board. Canon 5 F (now Canon 4 G) prohibited judges from giving legal advice, and Canon 5 B(2) and Canon 5 C(l) (now Canon 2 D and Canon 4 D) forbade the judge from allowing the prestige of his or her office to be used to draw more business. The Committee was, therefore, “unable to determine any purpose the judge could serve on an advisory board other than lending his name to enhance the prestige of the institution to enable it to draw more business.” Hence, the Committee advised that “a judge may not serve as a member of [an] Advisory Board of a local financial institution.”

A variation of the question came back to the Ethics Committee when they were asked, “May a district judge serve as director of a local bank?” Responding with JE-78, the Ethics Committee answered a “Qualified yes.” Pointing out that the district judge must be careful not to lend the prestige of his office to advance the interest of the bank, the Ethics Committee advised that a district judge could serve as a bank director because a local bank is not often in district court. The Committee noted that in the event the bank was in district court, the judge would have to disqualify himself. Apparently, the fact that this was not merely an “advisory” board was distinguishing, and the bank had other reasons (other than using the prestige of his office) to want to have the judge on its board of directors.

JE-118 was issued by the Ethics Committee as a result of the Supreme Court’s request that the Ethics Committee review all existing Judicial Ethics Opinions. The purpose of JE-118 was to address “a possible contradiction between” JE-67 and JE-78. Accordingly, the Ethics Committee stated the question as “May a Kentucky Judge or Justice, consistent with the Code of Judicial Conduct, serve as a director on the board of directors or on the advisory board of a financial institution?” The Ethics Committee answered a “Qualified No.”

The Committee recognized that the express language of Canon 4 D(3) seemingly permits such participation in a business, but that the Commentary cautions that such service may be prohibited by other provisions of the Code. In this regard, the Committee looked to Canon 2 D, which provides that “[a] judge shall not lend the prestige of judicial office to advance the private interests of the judge or others,” and to Canon 4 D(3)(iii) which provides that a judge shall not be involved with any business entity “likely to be engaged frequently in adversary proceedings in the court of which the judge is a member or in any court subject to the appellate jurisdiction of the court of which the judge is a member.”

The Committee identified banks per se as a business to avoid because “banks are engaged in litigation much more frequently than other businesses.” With regard to Canon 2 D, the Committee withdrew the distinction in circuit and district judges it made in JE-78. The Committee was unable to ascertain any purpose to any judge, irrespective of level of judicial service, serving on an advisory board or board of directors, other than to lend the judge’s name to enhance the prestige of the institution to enable it to draw more business. The Committee decided to eliminate even the mere risk. Recognizing, however, “the right of a judge to have and maintain investments”, the Committee carved out an exception that a judge may serve on the board of directors of a banking company in which the judge owns stock.

Movant is currently a circuit judge in the family court division, and he serves on the advisory board of a local bank. Standing is not an issue, nor is any actual conflict alleged between his office as judge and his position with the bank. Movant contends that JE-118 is far too narrow an interpretation of Canon 4 D of the Code of Judicial Conduct, and that such interpretation arbitrarily and unnecessarily restricts the non-judicial activities of judges and justices.

My interpretation of the language of Canon 4 D(3) is that it is permissive in nature and does not except out banks or other financial institutions. The clear wording of Canon 4 D(3) provides: “A judge may serve as an officer, director, manager, general partner, advisor or employee of any business entity subject to the following limitations and the other requirements of this Code.... ” (Emphasis added.) The language is permissive, with no distinctions related to the court in which the judge serves, in the type of business, the position held (director or an advisor), nor requirement that the judge own stock in said business to be either a director or advisor. Only after this permissive language does the Canon qualify this permissive language to exclude businesses that are:

(i) generally held in disrepute in the community, or
(ii) likely to be engaged in proceedings that would ordinarily come before the judge, or
(iii) likely to be engaged frequently in adversary proceedings in the court of which the judge is a member or in any court subject to the appellate jurisdiction of the court of which the judge is a member.

Canon 4 D(3)(a).

Here again, the exclusionary language of Canon 4 D(3) does not single out any business per se, nor distinguish between being a director or an advisor. There is no distinction between being an owner or nonowner of stock in the business. Fui’-ther, when an individual is named without the title of “Judge,” I would like to presume the purpose of having the judge serve on an advisory board or board of directors has something to do with his or her knowledge of the subject matter, although it could be shown otherwise and contrary to Canon 2 D. The language of the Canons must be applied to the individual business in the community and to the individual judge.

I agree with Movant that this particular business (a bank or financial institution) is not likely to come before this particular judge (a family court judge). Occasional conflicts, if any, can be dealt with through the judge’s disqualification or recusal. To the extent that JE-118 opines otherwise, it conflicts with the clear wording of Canon 4 D. I would vacate JE-118 to that extent.

      . Because the issue is not properly before us, we express no binding opinion at this time as to whether a judicial officer may serve as an advisor or director to a business entity other than a financial institution.

      . Thus, the Committee properly withdrew its formal opinion in JE-78, which had held that district court judges were permitted to serve as directors of banks.

      . See, e.g., Steven Lubet, Regulation of Judges’ Business and Financial Activities, 37 Emory L.J. 1, 28 (1988) ("It should be apparent, however, that certain institutions are more litigation sensitive’ than others. Banks, insurance companies, and utilities may often be affected by the outcome of litigation even where the particular entity is not a party to the particular proceeding. ... Similarly, financial institutions may have an interest in lawsuits concerning general banking law, securities, pension regulation, trusts, and a host of other subjects. Thus, a judge who sits on the board of directors of an insurance company will be faced with many more actual and potential conflicts of interest than will a judge who operates a hardware store. The conflicts are no less troubling because they are inchoate or general rather than being tied to specific litigation. The same holds true for virtually all of the heavily regulated industries, but banks, insurance companies, and utilities are among those that are the most closely involved with state government and state law.") (emphasis added and footnote omitted).

      . In re Judicial Ethics Opinion 2004-4, 103 P.3d 84 (Okla.Jud.Eth.2004) (answering in the affirmative the question of whether "appointment to the Bench and assuming office necessitate or require the judge to resign as a Director of a Federal Credit Union[.]”).

      . Babineaux v. Judiciary Commission, 341 So.2d 396, 403 (La.1976) (finding constitutional a canon of judicial ethics prohibiting judicial officers from serving on the board of directors of financial institutions).

      . JE-117 was rendered in April 2009 and is available to the public at http://courts.kv.gov/ NR/rdonlyres/50756AFl-2DA5-4B29-98C2-24471FSC0A98l0IJE117.pdf.

      In May 2009, a majority of this Court declined to review JE-117 in case no. 2009-SC-000242-OA, In re Honorable Jeff S. Taylor. The public may view the stepsheet, which summarily reflects our decision to decline review of JE-117 by entering the appropriate case information at http://apps.courts.ky.gov/ supreme/sc-dockets.shtm.

      . See SCR 4.300, Kentucky Code of Judicial Conduct, pmbl., which provides, in part, "[wjhen 'may' is used, it denotes permissible discretion or, depending on the context, it refers to action that is not covered by specific proscriptions.”


author: /$/ John D. Minton, Jr. CHIEF JUSTICE

text:
    Gregory A. GABBARD, Movant, v. KENTUCKY BAR ASSOCIATION, Respondent.
    No. 2007-SC-000459-KB.
    Supreme Court of Kentucky.
    April 22, 2010.
   OPINION AND ORDER

Upon motion of the Kentucky Bar Association (KBA), this Court entered an order on January 21, 2010 directing Gregory A. Gabbard to show cause why the conditional reinstatement allowed by this Court in August 2009 should not be revoked due to several violations of the terms of his reinstatement. Gabbard, whose KBA member number is 23955 and whose bar roster address is 3165 Rosina Avenue, Covington, Kentucky 41015, was admitted to practice in the Commonwealth of Kentucky on November 1, 1983. In 2005, this Court suspended Gabbard for a period of one year. Kentucky Bar Ass’n v. Gabbard, 172 S.W.3d 395 (Ky.2005). As noted, Gabbard gained conditional readmission in August 2009. Gabbard v. Kentucky Bar Ass’n, 291 S.W.3d 221 (Ky.2009). Although he filed a response to the show cause order, Gabbard has failed to show cause why his reinstatement should not be revoked for non-compliance with the established conditions. Accordingly, we grant the KBA’s motion and revoke Gabbard’s conditional reinstatement.

In August 2009, this Court granted Gab-bard’s application for reinstatement to the practice of law, conditioned upon his participation in the KYLAP program, his continued compliance with the KYLAP monitoring and supervision agreement, and payment of costs to the KBA in the amount of $1,415.29. Under the KYLAP agreement, Gabbard is subject to random drug and alcohol screens and must be tested at least once every two months. Gab-bard’s compliance report shows that he regularly fails to make required calls into the testing system and, consequently, fails to take the required tests. While he had called into the system 67 times, he had missed approximately 80 calls into the system. In June 2009, Gabbard was selected for a random drug test and passed. Although he did not call in and was not selected for a random test in July 2009, he submitted for a test, and the results were positive for opiates, codeine, and morphine. Since his order of reinstatement, Gabbard has failed to appear for six required random drug tests. In his response to the show cause order, Gabbard explains that his positive drug test was the result of prescription cough medicine containing codeine. He attached records verifying that a diagnosis of pneumonia precipitated a prescription for this medication. However, Gabbard does not dispute the KBA’s allegations concerning his failure to call in or submit to random drug tests.

Additionally, the KYLAP agreement requires Gabbard to attend meetings of Alcoholics Anonymous or another approved recovery program at least twice per week. Although Gabbard agreed to keep a log of his attendance, he did not provide it upon request of his KYLAP Director. In his response, Gabbard contends that he attends AA meetings regularly and, in fact, exceeds the frequency required by his KY-LAP agreement. And although Gabbard does attach his log record to his response, he admits that his log is woefully inadequate.

Gabbard’s KYLAP agreement also requires him to contact his monitor at least bi-monthly, and every week if the monitor so requests. A quarterly report, dated August 3, 2009, revealed that Gabbard had not contacted his monitor by telephone for three months and that the two had only had one face-to-face contact during that period. A subsequent quarterly report indicated that his monitor “had not heard from Greg in 3 months,” and that his progress in the recovery program was “unknown.” Gabbard admits his failure to report to his KYLAP monitor.

Gabbard also admits that he has yet to pay costs to the KBA as required by the order of conditional reinstatement. He further admits that he owes additional costs in the amount of $1,688.77, certified to the Court by the KBA Character and Fitness Committee, for payment of an investigator. However, Gabbard asserts that he has been unable to pay these costs due to dismal financial circumstances.

Based on the foregoing, the KBA recommends that Gabbard’s conditional reinstatement be revoked. In his response, Gabbard set out in detail several unfortunate circumstances, including his own ill health as well as that of his wife, costly surgeries, and loss of employment and loss of health insurance, which contributed to his non-compliance with the conditions of his reinstatement. He, therefore, requests that the Court extend the Show Cause Order for a period of three months to allow him to demonstrate compliance with the Court’s orders.

While we acknowledge Gabbard’s personal difficulties and commend his history of public service and pro bono work as well as his efforts to support children and grandchildren in need, his non-compliance with the conditions of his reinstatement is simply too substantial to excuse.

Accordingly, it is hereby ORDERED that:

1. Gregory A. Gabbard’s reinstatement to the practice of law on August 27, 2009 is revoked and he is suspended from the practice of law in this Commonwealth until reinstated as provided by SCR 3.510.

2. In accord with SCR 3.390, if he has not already done so, Gabbard is directed to notify in writing all clients and all courts in which he has matters pending of his inability to practice law, within ten days from the date of entry of this Opinion and Order. Gabbard is further directed to furnish copies of said letters of notice to the Director of the Kentucky Bar Association. Further, Gabbard shall without delay, to the extent reasonably possible, cancel and cease any advertising activities in which he is engaged.

3. Gabbard is ordered to pay costs to the KBA in the amount of $1,415.29 in accord with this Court’s August 27, 2009 order.

4. Gabbard is ordered to pay costs of $1,688.75 to the Character and Fitness Committee in accord with this Court’s order of November 10, 2009.

All sitting. All concur.

ENTERED: April 22, 2010

/$/ John D. Minton, Jr. CHIEF JUSTICE


author: /s/ John D. Minton, Jr. Chief Justice

text:
    KENTUCKY BAR ASSOCIATION, Movant, v. Jane K. KISSLING, Respondent.
    No. 2009-SC-000628-KB.
    Supreme Court of Kentucky.
    April 22, 2010.
   OPINION AND ORDER

On October 1, 2009, the Kentucky Bar Association (KBA) moved this Court to enter an order directing Jane K. Kissling, whose KBA member number is 81087 and whose bar roster address is P.O. Box 8314, Lexington, Kentucky, 40533, to show cause why she should not be subject to reciprocal discipline after being permanently disbarred by the Supreme Court of New Jersey on September 24, 2008. The KBA also requested that if such cause be lacking, this Court enter an order in accordance with SCR 3.435(4) permanently disbarring Kissling from the practice of law in this Commonwealth. On November 25, 2009, this Court granted the KBA’s request, ordered Kissling to show cause why she should not be subject to reciprocal discipline, and noted that the identical discipline would be imposed on Kissling if she failed to respond within twenty days of receipt of the show cause order. Having received no response from Kissling, this Court now grants the KBA’s motion and recommended disciplinary sanction.

Kissling was admitted to practice law in this Commonwealth on March 1, 1972, and was admitted to practice law in New Jersey in 1989. In 1994, Kissling was indicted by a New Jersey grand jury for knowingly misappropriating $52,100.97 from one of her clients, Ms. Violet Sachs. Following the indictment, which charged Kissling with a third-degree felony, Kissling disappeared and was a fugitive for the next four years. Kissling was ultimately apprehended in 1998 and entered into a one-year pretrial intervention program. Subsequently, in 1999, an ethics complaint was filed against Kissling based on her misappropriation of Ms. Sachs’ property. After Kissling filed an answer to this complaint in 2002 requesting a stay, the Supreme Court of New Jersey stayed the ethics proceedings against Kissling until July 17, 2006, when the Court granted the Office of Attorney Ethics’ motion to lift the stay.

On June 25, 2008, the New Jersey Disciplinary Board entered its decision finding Kissling guilty of violating the New Jersey Rules of Professional Conduct (RPC) 1.15(a), which prohibits an attorney from knowingly misappropriating a client’s trust funds, and 8.4(c), which prohibits an attorney from engaging in conduct involving fraud, dishonesty, deceit or misrepresentation. The Board unanimously recommended that Kissling be permanently disbarred from the practice of law for her misconduct. On September 24, 2008, the Supreme Court of New Jersey adopted the Board’s recommendation and entered an order permanently disbarring Kissling.

If an attorney licensed to practice law in this Commonwealth receives discipline in another jurisdiction, SCR 3.435(4) requires this Court to

impose the identical discipline unless Respondent proves by substantial evidence:
(a) a lack of jurisdiction or fraud in the out-of-state disciplinary proceeding, or
(b) that misconduct established warrants substantially different discipline in this State.

As noted previously, Kissling, by not responding to the show cause order, has failed to demonstrate why this Court should not impose the identical discipline she received in New Jersey. Furthermore, SCR 3.435(5) requires this Court to recognize that a final adjudication of misconduct in another jurisdiction establishes conclusively the same misconduct for purposes of a disciplinary proceeding in Kentucky.

Here, the rules Kissling violated in New Jersey are identical to the corresponding Rules of Professional Conduct in Kentucky: RPC 1.15(a) is the equivalent of SCR 3.130-1.15(a), and RPC 8.4(c) is the equivalent of the recently amended SCR 3.130-8.4(c). Thus, because Kissling has been disciplined by the Supreme Court of New Jersey and because she has failed to show adequate cause why she should not be subject to reciprocal discipline pursuant to SCR 3.425(4), this Court grants the KBA’s motion and adopts their recommended discipline of permanent disbarment. It is hereby ORDERED that:

1. Jane K. Kissling is permanently disbarred from the practice of law in the Commonwealth of Kentucky.
2. Pursuant to SCR 3.450, Jane K. Kissling is directed to pay all costs, if any, associated with these disciplinary proceedings against her and for which execution may issue from this Court upon finality of this Opinion and Order.
3. Pursuant to SCR 3.390, Jane K. Kissling shall, within ten (10) days from the entry of this opinion and order, notify all clients, in writing, of her inability to represent them; notify, in writing, all courts in which she has matters pending of her disbarment from the practice of law; and furnish copies of all letters of notice to the Executive Director of the Kentucky Bar Association. Furthermore, to the extent possible, Kissling shall immediately cancel and cease any advertising activities in which she is engaged.

All sitting. All concur.

ENTERED: April 22, 2010.

/s/ John D. Minton, Jr. Chief Justice

      . Kissling has been temporarily suspended from the practice of law in New Jersey since the date of this indictment, September 19, 1994.


text:
    KENTUCKY BAR ASSOCIATION, Movant, v. Jamal A. KOURY, Respondent.
    No. 2010-SC-000023-KB.
    Supreme Court of Kentucky.
    April 22, 2010.
   OPINION AND ORDER

The Kentucky Bar Association (KBA) Board of Governors moves this Court to adjudicate Jamal A. Koury, whose KBA member number is 91224, guilty of violating SCR 3.130-3.4(c), SCR 3.130-5.5(a), and SCR 3.130 — 8.1(b), and to order that he be suspended from the practice of law for a period of 181 days. Koury was admitted to practice law in the Commonwealth of Kentucky on May 1, 2006, and his bar roster address is 7809 Warwick Avenue, Louisville, Kentucky 40222. Based upon the findings and conclusions of the Board of Governors, we adjudicate Koury guilty of the charged offenses and impose the recommended sanction.

This disciplinary proceeding was commenced after Koury continued to practice law despite receipt of notification that his license had been suspended for failure to pay bar dues. Although he personally signed the return receipt for the order of suspension, dated February 14, 2007, he proceeded to handle over a dozen cases and filed a brief in the Court of Appeals. Six months after his suspension, Deputy Bar Counsel sent Koury a letter informing him that the Office of Bar Counsel had received information that he may be engaging in the unauthorized practice of law. Koury replied, acknowledging receipt of the suspension notice and expressed a willingness to cooperate in resolving the matter. Nevertheless, Koury continued to practice law for the next six months, at which time the KBA sent Koury a “cease and desist” letter.

In April 2008, an Inquiry Commission Complaint was filed and sent to Koury via certified mail, but a return receipt was never received. About six weeks later, Koury was served by the Jefferson County Sheriff, but he did not respond to the complaint. A letter reminding Koury that his response was overdue was returned to the KBA as unclaimed. The sheriffs subsequent attempts to serve Koury were unsuccessful and the sheriffs certificate, signed August 1, 2008, indicated that Koury had moved to Florida, but no address was provided. Pursuant to SCR 3.175, the KBA Executive Director was served. The Director’s attempt to serve Koury was likewise unsuccessful and Koury never filed a response to the complaint.

Ultimately, the Inquiry Commission charged Koury with violating SCR 3.130-3.4(c) (failure to comply with a court order); SCR 3.130-5.5(a) (engaging in the unauthorized practice of law), and SCR 3.130-8.1(b) (failure to respond to a demand for information from a disciplinary authority). Service of the charges was unsuccessful and Koury has not filed an answer to the charges or otherwise contested the facts as represented by the KBA. As a result, Koury’s case came before the Board of Governors as a default case pursuant to SCR 3.210. With one abstention, the Board of Governors unanimously found Koury guilty of the charges.

We adopt the recommended findings of fact and conclusions of law, upon which we approve of the recommended sanction of a 181-day suspension.

Therefore, it is hereby ORDERED that;

1.Jamal A. Koury is adjudicated guilty of violating SCR 3.130-3.4(c), SCR 3.130-5.5(a), and SCR 3.130-8.1(b).

2. Koury is suspended from the practice of law in the Commonwealth of Kentucky for a period of 181 days. Should Koury, thereafter, seek to have his license restored, he must be approved by the Character and Fitness Committee. Further, the Character and Fitness Committee will have an opportunity, should it be appropriate, to impose any requirements regarding the Kentucky Lawyer’s Assistance Program (KYLAP) prior to restoration.

3. In accordance with SCR 3.390, Koury is ordered to send letters to all courts in which he has matters pending and to all clients for whom he is actively involved in litigation within ten days of this Order notifying them of his inability to continue to represent them and advising them of the necessity of retaining new counsel. Koury shall also provide a copy of such letters to the Director of the KBA. Furthermore, to the extent possible, Koury shall immediately cancel and cease any advertising activities in which he is engaged.

4. Pursuant to SCR 3.450, Koury is ordered to pay all costs associated with these disciplinary proceedings, said sum being $243.40, and for which execution may issue from this Court upon finality of this Opinion and Order.

All sitting. All concur.

ENTERED: April 22, 2010.

/s/ John D. Minton, Jr. Chief Justice


text:
    Carl TURNER, Movant, v. KENTUCKY BAR ASSOCIATION, Respondent.
    No. 2010-SC-000060-KB.
    Supreme Court of Kentucky.
    April 22, 2010.
   OPINION AND ORDER

Carl Turner moves this Court to enter an order imposing a two-year suspension from the practice of law in the Commonwealth of Kentucky. In response, the Kentucky Bar Association (KBA) agrees with the requested sanction. Turner, whose KBA member number is 83686 and whose bar roster address is 811 Central Avenue, Newport, Kentucky 41071, was admitted to practice law in this Commonwealth on October 12, 1990. Based upon Turner’s conduct in the matter that prompted these proceedings, we agree that a two-year suspension is appropriate.

In 2002, John Nelson retained Turner to pursue a civil action against Blazing Wings, Inc. Turner filed a complaint in the matter. Four months later the trial court entered an order requiring Turner’s client to fully answer the defendant’s discovery and to supplement his responses to previous discovery. Turner neither complied with the order nor did he apprise his client of it. Defendant’s motion to dismiss, based upon failure to abide by the discovery order, was granted and the case was dismissed with prejudice. Not only did Turner fail to apprise his client of these events, he continued to represent to his client that the case was still active. In fact, more than a year after the case had been dismissed, Turner brought four witnesses into his office allegedly to prepare for their depositions.

Turner admits to the foregoing actions and he concedes that these actions warrant a two-year suspension. He first admits that his failure to comply with the trial court’s discovery order violated SCR 3.130-1.3, which requires a lawyer to “act with reasonable diligence and promptness in representing a client,” as well as SCR 3.130-3.4(c), which prohibits a lawyer from “knowingly or intentionally disobey[ing] an obligation under the rules of a tribunal.” Turner further admits that his failure to respond to his client’s inquiries and his failure to apprise his client of the true status of his case violated SCR 3.130-1.4, which mandates that a lawyer promptly respond to requests for information, keep his client informed, and sufficiently explain matters to allow his client to make informed decisions. Turner also recognizes that his actions violated SCR 3.130-3.2, requiring a lawyer to make reasonable efforts to expedite litigation. And, finally, Turner concedes that his misrepresentations that the case was ongoing, including pretending to prepare for depositions after the case had been dismissed, violated SCR 3.130-8.4(c), which deems it professional misconduct to “engage in conduct involving dishonesty, fraud, deceit or misrepresentation.”

This Court has approved of a two-year suspension as an appropriate sanction for similar misconduct. In Beal v. Kentucky Bar Association, 220 S.W.3d 690 (Ky.2007), a two-year suspension was imposed where the attorney’s inaction resulted in dismissal of his client’s case for failure to prosecute. Like, the instant case, the attorney failed to inform his client of the dismissal and continued to represent that the case was active long after it had been dismissed.

In Kentucky Bar Association v. Terrell, 891 S.W.2d 403 (Ky.1995), a two-year suspension was imposed for the attorney’s inaction with respect to a civil case that ultimately resulted in a dismissal for failure to prosecute. The attorney also made a false statement to the Court of Appeals in an attempt to justify her inaction. As Turner has engaged in similar misconduct, we approve of the negotiated sanction of suspension from the practice of law for a period of two years.

Accordingly, it is hereby ORDERED that:

1. Carl Turner is suspended from the practice of law in the Commonwealth of Kentucky for a period of two years.

2. In accordance with SCR 3.390, Turner is directed to notify in writing all clients and all courts in which he has matters pending of his inability to practice law, within ten days from the date of entry of this Opinion and Order. Beal is further directed to furnish copies of said letters of notice to the Director of the Kentucky Bar Association. Further, Turner shall without delay, to the extent reasonably possible, cancel and cease any advertising activities in which he is engaged.

3. In accordance with SCR 3.450, Turner is directed to pay all costs associated with these disciplinary proceedings against him, said sum being $31.93, and for which execution may issue from this Court upon finality of this Opinion and Order.

All sitting. All concur.

ENTERED: April 22, 2010.

/s/ John D. Minton, Jr. Chief Justice

      . All rules referenced are to be the Kentucky Supreme Court Rules of Professional Conduct in effect prior to the July 15, 2009 amendments.


author: /s/ John D. Minton, Jr.

text:
    John Grant COOK, Movant, v. KENTUCKY BAR ASSOCIATION, Respondent.
    No. 2010-SC-000170-KB.
    Supreme Court of Kentucky.
    April 22, 2010.
   OPINION AND ORDER

John Grant Cook moves this Court to enter an order imposing a sixty-one (61) day suspension from the practice of law in the Commonwealth of Kentucky. In response, the Kentucky Bar Association (KBA) agrees with the requested sanction. Cook, whose KBA member number is 90412 and whose bar roster address is 1707B Millgate Road, Louisville, Kentucky 40228, was admitted to practice law in this Commonwealth on October 15, 2004. We approve of the negotiated sanction of suspension from the practice of law for sixty-one (61) days, while also noting that Cook was suspended from the practice of law under an April 2009 order of this Court, from which he has not been reinstated.

The sanction at issue resulted from Cook’s failure to take any action with respect to an uncontested divorce proceeding despite his acceptance of a $500.00 retainer to do so. Cook failed to return the client’s phone calls and moved his office without notifying her. Unable to reach Cook, the client had to retain another attorney to institute the divorce proceedings. Fortunately, any harm caused by the delay was minimal given the nature of the action, i.e., a civil case wherein no statute of limitations was implicated. Nevertheless, as Cook acknowledges, his inaction, his failure to return his client’s calls or notify her of his move, and his failure to return an unearned fee violated SCR 3.130-1.3, SCR 3.130-1.4, and SCR 3.130-1.16, respectively-

The foregoing events occurred in 2006. In 2007, Cook was suspended for failure to pay bar dues. In 2009, Cook was suspended for two years, with thirty days to be served, and the remainder to be conditionally probated provided that he sign a supervision agreement, participate in the Kentucky Lawyer’s Assistance Program (KYLAP), and be evaluated and treated for depression. Prior to expiration of the thirty days, the Office of Bar Counsel objected to Cook’s automatic reinstatement. Consequently, Cook is still suspended under the 2009 order of suspension.

Under these circumstances, we agree with the negotiated sanction, which in addition to a sixty-one (61) day suspension, mandates Cook’s continued compliance with KYLAP and the supervision agreement that emerged from the 2009 proceedings.

Accordingly, it is hereby ORDERED that:

1. John Grant Cook is suspended from the practice of law in the Commonwealth of Kentucky for a period of sixty-one (61) days from the date of this Opinion and Order.

2. In accord with SCR 3.390, if he has not already done so, Cook is directed to notify in writing all clients and all courts in which he has matters pending of his inability to practice law, within ten days from the date of entry of this Opinion and Order. Cook is further directed to furnish copies of said letters of notice to the Director of the Kentucky Bar Association. Further, Cook shall without delay, to the extent reasonably possible, cancel and cease any advertising activities in which he is engaged.

3. Cook shall continue to comply with the Supervision Agreement that he entered into with KYLAP on or about January 18, 2010.

4. In accordance with SCR 3.450, Cook is directed to pay all costs associated with these disciplinary proceedings against him, said sum being $25.20, and for which execution may issue from this Court upon finality of this Opinion and Order.

All sitting. All concur.

ENTERED: April 22, 2010.

/s/ John D. Minton, Jr.

      . All rules referenced are to the Kentucky Supreme Court Rules of Professional Conduct in effect prior to the July 15, 2009 amendments.


author: THOMPSON, Judge.

text:
    COMMONWEALTH of Kentucky, ENERGY AND ENVIRONMENT CABINET, Formerly Environmental and Public Protection Cabinet, Appellant, v. Vernon SPURLOCK, d/b/a Vernon Spurlock; and War Eagle Coal Company, Appellees.
    Nos. 2008-CA-001184-MR, 2008-CA-001275-MR.
    Court of Appeals of Kentucky.
    Jan. 22, 2010.
    As Modified on Denial of Rehearing March 26, 2010.

      Maria T. Geisler, Stephen C. Boyd, Frankfort, KY, for appellant.
    Donald Duff, Frankfort, KY", for appel-lee.
    Before CAPERTON, THOMPSON, and WINE, Judges.
   OPINION

THOMPSON, Judge.

The Commonwealth of Kentucky, Energy and Environment Cabinet (formerly Environmental and Public Protection Cabinet), appeals from two orders of the Clay Circuit Court declaring the Cabinet’s final orders entered against Vernon Spurlock d/b/a Vernon Spurlock void based on its interpretation of the Kentucky Supreme Court’s decision in Commonwealth of Kentucky, Natural Resources and Environmental Protection Cabinet v. Kentec Coal Co., Inc., 177 S.W.3d 718 (Ky.2005). We conclude that the trial court was incorrect in its application of the law and reverse and remand.

Pursuant to KRS 350 et seq., the Cabinet inspected Spurlock’s property located in Clay County and determined that he violated the provisions of KRS Chapter 350 et seq., and its related regulations. As a result, the Cabinet issued two noncompliance orders and two cessation orders. After Spurlock was notified of the orders and failed to respond, the Cabinet issued proposed assessment orders assessing civil penalties of $100,104 and $52,200.

The notices of assessment were pre-printed forms and advised Spurlock to choose one of three options:

• I choose not to contest the amount of the proposed assessment and I understand that an appropriate final Order in conformity with 405 KAR 7:092, Section 3(4) will be entered.
• I request an assessment conference to contest the proposed assessment. I am requesting the assessment conference on behalf of

Name of Business Entity (please print)

• I waive my right to an assessment conference. Attached is a petition for an administrative hearing and a cashier’s check, certified check, or money order in the amount of the proposed assessment for payment into the escrow account as required under 405 KAR 7:092, Section 6.

Spurlock was further instructed:

If you fail to respond within thirty (30) days of receipt of this notice, the Secretary of the Environmental and Public Protection Cabinet will enter an appropriate final order in conformity with 405 KAR 7:092, Section 3(4).

Neither notice advised Spurlock of his right to seek a waiver of the prepayment of the proposed penalties. After Spurlock failed to respond, the Cabinet issued two final orders on June 30, 2005, finding that Spurlock failed to request an administrative hearing as advised in the notices of assessment and, therefore, waived- all rights to administrative hearings. As a consequence, the violations cited in the noncompliance orders were deemed admitted and the civil penalties imposed. Spur-lock was further ordered to perform all remedial measures required in the noncompliance and cessation orders.

On July 25, 2005, Spurlock filed two petitions for “Review and Appeal”, each seeking to have the Cabinet’s orders set aside on the basis that in Kentec, the Kentucky Supreme Court declared the prepayment provision in KRS 350.0301(5) and 405 KAR 7:092, Section 6 unconstitutional. Subsequently, he filed motions for summary judgment and, in support, filed affidavits stating that he could not file a petition for an administrative hearing because he had insufficient resources to pay the amount of the penalties imposed. The Cabinet responded and moved to strike Spurlock’s affidavit because it was not included in the administrative record. KRS 350.032(2). Finally, it argued that Spur-lock failed to request an assessment conference or a formal hearing prior to filing his petitions in the circuit court and, therefore, waived any right to challenge the Cabinet’s orders.

The circuit court concluded that in Ken-tec, the Kentucky Supreme Court nullified the prepayment provisions in KRS 350.0301(5) and 405 KAR 7:092, Section 6 and, therefore, Spurlock was not required to request hearings before the Cabinet. Ultimately, the circuit court held that the orders were void and set aside the orders.

The circuit court utilized a de novo standard of review because there was no administrative hearing to provide a basis for factual findings and the facts underlying the Cabinet’s orders. Our initial inquiry is whether the circuit court utilized the proper standard of review.

The purpose of judicial review of an appeal from an administrative agency is to ensure that the agency did not act arbitrarily. Baesler v. Lexington-Fayette Urban County Government, 237 S.W.3d 209 (Ky.App.2007). If the Court concludes that the agency applied the correct rule of law to the facts supported by substantial evidence, the final order of the agency must be affirmed. Bowling v. Natural Resources and, Environmental Protection Cabinet, 891 S.W.2d 406 (Ky.App.1994).

We conclude that the trial court correctly framed the standard of review as de novo: The issues presented require only that we resolve whether the Cabinet properly applied the law. Although we conclude that the circuit court’s application of Kentec was misguided, on other grounds, we remand the case to the Cabinet with directions that Spurlock be permitted to file a request for a formal hearing.

Although the circuit court relied exclusively on the Kentec decision, a thorough understanding of the effect of that decision requires an analysis of the Supreme Court’s prior decision in Franklin v. Natural Resources and Environmental Protection Cabinet, 799 S.W.2d 1 (Ky.1990), and the statutory and regulatory changes made in response to that decision.

Franklin involved four cases in which the Cabinet issued notices of noncompliance and orders for remedial measures. Two of the mining companies filed applications for a formal hearing that were unaccompanied by the required payment of the assessed penalties. The remaining two companies did not file applications for formal hearing, as neither party had sufficient funds to pay the assessed penalty levied by the preliminary hearing officer.

Our Supreme Court was requested to subject 405 KAR 7:092 to constitutional scrutiny. At the time of the Court’s decision, the procedures available provided for an informal hearing at which no records were kept and the only recourses available, if fines and penalties were imposed by the hearing officer, were to prepay the assessment and request a formal hearing within thirty days.

The Court concluded that the regulation requiring prepayment of the assessed penalty prior to the grant of a formal hearing was void. Crucial to the Court’s analysis was that the enabling statutes did not authorize the Cabinet to impose a prepayment of penalties as a condition precedent to a formal hearing. Id. at 3. Interpreting existing statutory law, the Court pointed out that:

KRS 350.028(2) provides that the Cabinet has the power to conduct hearings under Chapter 224, which, in turn, provides in KRS 224.081 and KRS 224.083 that, whenever the Cabinet has reason to believe that a violation has occurred, it shall serve a written notice upon the violator and hold a hearing thereon. The statutes state that the hearing shall be one at which the party may be represented by counsel, may make oral or written arguments, offer testimony, cross-examine, issue subpoenas, etc. Of additional note is that KRS 224.083 provides that a record shall be kept of such hearing and made available. Under the regulation herein, the preliminary hearing does not follow the statute and the only way in which a formal hearing may be obtained is by the prepayment of the penalties and fines, which procedure is not mentioned or authorized by the statute.

Id.

The court explained that the statutes and regulations pertaining to surface mining were adopted pursuant to the Federal Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. § 1201 el seq., which provides the miner with a formal hearing, a full record, and attendant due process rights and, further, an appeal to an administrative law judge and appeal to the federal court system. Because similar proceedings were not provided by the Kentucky regulations, the Court held that Kentucky’s regulations were more stringent than federal law and regulations and, consequently, the prepayment provision of 405 KAR 7:092 unenforceable. Id. at 3.

Kentec followed legislative changes to Chapter 350 and those to the Cabinet’s regulations in response to Franklin. The same statutes and regulations were in effect when the Cabinet issued the orders against Spurlock.

In Kentec, challenges were made to the newly revised versions of KRS 350.0301(5) and 405 KAR 7:092. The post-Franklin statute authorizes the Cabinet to promulgate regulations for the placement of proposed civil penalty assessments into an escrow account prior to a formal hearing in the amount of the assessment. However, it also states that the regulations shall “provide for a waiver of the placement of the proposed civil penalties into escrow for those individuals who demonstrate with substantial evidence an inability to pay the proposed civil penalties into escrow.” KRS 350.0301(5).

Pursuant to the amended version of the statute, the Cabinet promulgated 405 KAR 7:092, Section 3 of which sets forth the requirements for a proposed penalty assessment and the options available following the issuance of a “Notice of Proposed Assessment.” Section 4 provides for an informal assessment conference and does not require prepayment of the assessed penalty; however, identical to the preliminary hearing procedure pre-Franklin, no record is created from which an appeal may be taken. Section 6 outlines the procedure that must be followed to obtain a formal hearing to challenge the proposed assessment and requires prepayment of the assessment or, if an assessment conference has been held, prepayment of the penalty recommended by the conference officer. However, and presumably in direct response to Franklin, Section 15 allows individuals to prove their inability to prepay the proposed assessment and to obtain a waiver from the prepayment requirement.

KENTEC, a corporation, filed a request for an informal assessment conference but failed to attend the hearing. As a result, the conference officer recommended to the Secretary that the assessment be upheld and advised KENTEC that it could request a formal hearing accompanied by full payment of the assessment.

KENTEC filed a “Petition for Hearing” in which it alleged that it did not have sufficient funds to prepay the proposed assessment. The Cabinet dismissed the petition because the prepayment was not attached and, therefore, affirmed the penalty. Central to the Cabinet’s conclusion was that KRS 350.0301(5) permitted only individuals, not corporations, to obtain a waiver of the penalty prepayment.

As in Franklin, the Supreme Court considered the constitutionality of the prepayment provisions in the Cabinet’s regulations. Because of the statutory amendments, including the prepayment requirement in KRS 350.0301(5), the Court also considered the exclusion of corporations from the waiver provision. Ultimately, the Court held that the statute, and 405 KAR 7:092, Section 6, were unconstitutional to the extent that corporations could not request a waiver of the prepayment requirement. The Court concluded that the distinction between an individual and a corporation violated the equal protection clause of the United States and Kentucky Constitutions and the denial of access to a formal hearing based on the inability to pay was unreasonable and arbitrary in violation of Section 2 of the Kentucky Constitution. Id. at 727. Reaffirming its position in Franklin, the Court explained that a due process hearing cannot be denied based on the inability to pay.

KENTEC, which plead “its inability to make the prepayment,” is deprived of a right to a due process hearing, while the hearing is secured to a corporation that can afford it, and even an indigent individual who has the means of securing a waiver. Like the Court of Appeals before us, we too have been unable “to discern any rational basis or legitimate state interest to explain — much less to justify — the arbitrary singling out of a corporation for such disparate treatment.”

Id. at 725 (footnote omitted).

The Court held that KRS 350.0301(5) and 405 KAR 7:092, Section 6, were unconstitutional as applied to KENTEC because corporations were excluded from the waiver provisions, while individuals were granted the right to seek relief from prepayment. In reliance on Kentec, Spurlock successfully persuaded the circuit court that the Cabinet’s orders were void. For the reasons stated below, we disagree that Kentec resolved the disposition of the case.

The fallacy in the circuit court’s reasoning is attributable to its failure to recognize the factual distinctions between Ken-tec and the present case. As pointed out by the Cabinet, Spurlock is an individual to whom the statutes and regulations explicitly grant the right to seek a waiver from the prepayment provision. The assessments of civil penalties against Spurlock were not premised on his inability to prepay the assessment penalties, rather the Cabinet’s orders were based upon Spur-lock’s failure to respond to its orders.

In view of the factual distinctions, the Cabinet urges this Court to apply the Supreme Court’s decision in Natural Resources and Environmental Protection Cabinet v. Cricket Coal Co., Inc., 780 S.W.2d 609 (1989), and this Court’s decision in Griffie v. Natural Resources and Environmental Protection Cabinet, 817 S.W.2d 897 (Ky.App.1991). We are unconvinced that either case establishes precedent for the situation presented.

In Cricket Coal Company, Inc., despite receiving notification, the coal operator failed to attend a preliminary hearing. The Cabinet issued a final judgment finding that the coal operator committed the violations and imposed a fine. The Supreme Court held the failure to attend the preliminary hearing fatal to the coal company’s subsequent appeals. It pointed out that 405 KAR 7:092, in effect at the time of the violations, provided that the failure to attend the preliminary hearing without good cause waived all rights to contest the fact of the violation or the proposed penalty. Additionally, the Court relied on KRS 350.032 which provided that “[n]o objection to the order may be considered by the court unless it was urged before the Cabinet or there were reasonable grounds for failure to do so.”

The Court held that the coal operator could not simply disregard the proceeding before the Cabinet and seek judicial review of the Cabinet’s order. The Court emphasized that the Cabinet’s regulations “clearly provide for entry of a default order .... The failure to appear at the preliminary hearing and the failure to request a formal hearing are deemed to be an admission of the violations charged and an acceptance of the proposed penalty.” Id. at 611.

After Franklin, this Court rendered its decision in Griffie v. Natural Resources and Environmental Protection Cabinet, 817 S.W.2d 897 (Ky.App.1991), wherein it addressed the impact of Franklin on the Supreme Court’s holding in Cricket that attendance at the preliminary hearing was a prerequisite to contest the fact of the violation or the proposed penalty. This Court rejected the appellants’ broad interpretation of Franklin and held that Franklin only invalidated the Cabinet’s regulatory scheme to the extent that it required prepayment of fines as a px'ereq-uisite to a formal hearing. It reasoned:

Griffie and Daniel would have us believe that all cases where the cabinet failed, for whatever reason, to hold a formal hearing, were somehow rendered void by virtue of Franklin. Appellants are reading too much into Franklin, which invalidated only so much of the cabinet’s regulatory scheme as required prepayment of fines as a prerequisite to the granting of a formal hearing. Significantly, the Supreme Court did not see fit to overrule or even discuss Cricket, nor did it consider or discuss the regulations concerning attendance at informal hearings. Thus, we must conclude that the Supreme Court intended to maintain the viability of its holding in Cricket.

Id. at 898.

Neither the legislature nor the Supreme Court has modified or removed the default provisions from the Cabinet’s proceedings. KRS 350.032 continues to require that all issues be presented to the Cabinet and the Cabinet’s regulations continue to contain default provisions. See 405 KAR 7:092. As in Franklin, in Kentec, the Supreme Court did not address its decision in Ciicket and left unaltered the requirement that all hearing requirements be satisfied prior to filing for judicial relief. Our dilemma in Spurlock’s case is that the Cabinet misinformed him regarding his rights.

The Supreme Court held in Franklin that the Cabinet’s prepayment provisions imposed prior to the granting of a formal hearing were unauthorized by statute and unconstitutional. Despite the legislative and administrative changes and in complete disregard of the dictate of our Supreme Court, the form notice provided by the Cabinet advised Spurlock that he was not entitled to an administrative hearing absent prepayment of the proposed penalty. Thus, there was no difference in the options available to Spurlock than those given under the pre-Franklin statutes and regulations. Through its order, the Cabinet imposed upon Spurlock the identical provisions held unconstitutional in Franklin and Kentec.

“Administrative agencies are bound by the procedural dictates of the statutes and are not empowered to adopt regulations in conflict with plain statutory provisions.” Natural Resources & Environmental Protection Cabinet v. Pinnacle Coal Corp., 729 S.W.2d 438, 439 (Ky.1987). It is logical that an agency is likewise without authority to issue an order in direct contradiction of our statutes and judicial decisions. This is particularly true where, as here, the agency misinformed a citizen regarding a constitutional right to which he: is entitled.

Based on the foregoing, the opinion and orders of the Clay Circuit Court are reversed and the case remanded to the Cabinet with directions that Spurlock be granted the opportunity to request a formal hearing.

ALL CONCUR.

      . In 2006, the Cabinet amended its Notice of Proposed Assessment to state that the prepayment of the proposed assessment is no longer required.

      . The Attorney General was notified pursuant to KRS 418.075 but declined to intervene.


author: STUMBO, Judge.

text:
    Rory Kent HILL, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    No. 2008-CA-001752-MR.
    Court of Appeals of Kentucky.
    Feb. 12, 2010.
    Ordered Published March 26, 2010.

      Rory Kent Hill, Central City, KY, pro se.
    Jack Conway, Attorney General of Kentucky, Jeffrey A. Cross, Assistant Attorney General, Frankfort, KY, for Appellee.
    Before COMBS, Chief Judge; CLAYTON and STUMBO, Judges.
   OPINION

STUMBO, Judge.

Rory Hill, pro se, appeals from an order of the Hardin Circuit Court directing that currency forfeited to the Commonwealth not be returned to him. Mr. Hill argues that the currency was not connected to any criminal activity for which he was convicted and should be returned to him. The Commonwealth argues that they made a prima facie case for the forfeiture and that the trial court correctly ruled the money was not to be returned. We affirm the order.

Appellant was convicted of first-degree assault, two counts of second-degree wanton endangerment, first-degree trafficking in a controlled substance while in possession of a firearm (second offense), possession of a handgun by a convicted felon, and being a second-degree persistent felony offender. He was sentenced to a total of thirty-years’ imprisonment. This conviction was affirmed by the Kentucky Supreme Court.

At the time Appellant was arrested, police officers found cocaine and $2,175 on his person. Pursuant to Kentucky Revised Statute (KRS) 218A.410(l)(j), the money was forfeited to the Commonwealth. KRS 218A.410(l)(j) states anything of value, including money, is subject to forfeiture when it is traceable to a drug exchange. Further,

[i]t shall be a rebuttable presumption that all moneys, coin, and currency found in close proximity to controlled substances, to drug manufacturing or distributing paraphernalia, or to records of the importation, manufacture, or distribution of controlled substances, are presumed to be forfeitable under this paragraph. The burden of proof shall be upon claimants of personal property to rebut this presumption by clear and convincing evidence. The burden of proof shall be upon the law enforcement agency to prove by clear and convincing evidence that real property is forfeitable under this paragraph.

KRS 218A.410(l)Cj).

On examination of the foregoing statute, it is apparent that any property subject to forfeiture under (j) must be traceable to the exchange or intended violation. This requirement exists without regard to the presumption which appears later in the statute....
Recognizing the difficulty of proof with respect to showing a connection between currency and drug transactions, the General Assembly created a presumption whereby currency found in close proximity to controlled substances was presumed to be forfeitable subject to the right of the owner to rebut the presumption. While the presumption would, at first blush, appear to dispense with the requirement of traceability, we believe the two must be construed harmoniously so as to give effect to the intention of the General Assembly.
The Commonwealth may meet its initial burden by producing slight evidence of traceability. Production of such evidence plus proof of close proximity, the weight of which is enhanced by virtue of the presumption, is sufficient to sustain the forfeiture in the absence of clear and convincing evidence to the contrary. In practical application, the Commonwealth must first produce some evidence that the currency or some portion of it had been used or was intended to be used in a drug transaction. Additional proof by the Commonwealth that the currency sought to be forfeited was found in close proximity is sufficient to make a prima facie case. Thereafter, the burden is on the claimant to convince the trier of fact that the currency was not being used in the drug trade.

Osborne v. Commonwealth, 839 S.W.2d 281, 284 (Ky.1992).

Appellant does not deny that the money and drugs were in close proximity to each other. He does argue that the Commonwealth did not provide the evidence necessary to trace the money to a drug transaction. Appellant claims that the money in his possession was not related to any drug transaction. He argues now, and testified to such during trial, that he won the money gambling on a casino boat. Appellant also argues that no one during the trial testified that he bought or sold drugs to obtain the money.

The Commonwealth argues that there was sufficient evidence to trace the money to the drugs. We agree. During trial, Appellant’s recorded confession was introduced into evidence. When asked if he smoked crack, Appellant replied “No, I don’t smoke no damn crack. Damn. I make money at this shit ...” Also, Appellant was found with one large bag of cocaine in one pants pocket and several small baggies in the other pocket. The trial court described the smaller bags as being “packaged.” Appellant also admitted to “giving” cocaine to a person involved in the underlying crime.

Given this evidence, we find the Commonwealth had “slight evidence of traceability.” Osborne at 284. The burden of proof then shifted to Appellant, forcing him to rebut the presumption, by clear and convincing evidence, that the money was not involved in drug related activity.

We review the trial court’s decision using the abuse of discretion standard. Johnson v. Commonwealth, 277 S.W.3d 635, 641 (Ky.App.2009). We find that the trial court did not abuse its discretion. The only evidence Appellant presented that the money was not involved in a drug transaction was his selfserving testimony that he won it gambling. He claimed he had a casino receipt on him at the time of his arrest, but he did not produce it at trial or the forfeiture hearing. We agree with the trial court’s findings that this did not amount to clear and convincing evidence sufficient to rebut the presumption contained in KRS 218A.410(l)(j).

Appellant also argues that the forfeiture of the money is an excessive fine that violates the 8th Amendment of the United States Constitution and section 17 of the Kentucky Constitution.

In determining whether a fine is unconstitutionally excessive, the trial court must determine that “the property is sufficiently tainted by the criminal act to be subject to forfeiture.” It must also “determine that the particular forfeiture is not grossly disproportionate to the particular offense.” “The touchstone of the constitutional inquiry under the Excessive Fines Clause is the principle of proportionality.” “Among the factors relevant to this determination [of proportionality] are the gravity of the offense, the potential penalties, the actual sentence, sentences imposed for similar crimes in this and other jurisdictions, and the effect of the forfeiture on innocent third parties.” (Citations omitted).

Smith v. Commonwealth, 205 S.W.3d 217, 223 (Ky.App.2006); see also Commonwealth v. Fint, 940 S.W.2d 896 (Ky.1997).

The trial court found that the forfeiture was not excessive and we agree. Appellant was sentenced to thirty-years’ imprisonment and the charges he was convicted of were all felonies. When compared to other cases involving the forfeiture of property, this forfeiture cannot be deemed excessive. In Osborne, a motor vehicle was ordered forfeited because it contained one marijuana plant and a set of scales. In Fint, a motor vehicle worth over $1,800 was ordered forfeited. In Smith, a vehicle worth $6,500 was ordered forfeited even though the drugs involved were only worth half that amount.

As for cases in other jurisdictions: in United States v. One 1990 Ford Ranger Truck, 876 F.Supp. 1283 (N.D.Ga.1995), a truck transporting a small amount of psilo-cybin mushrooms was ordered forfeited; in Worthington Police v. One 1988 Chevrolet Berreta, 516 N.W.2d 581 (Minn.Ct.App.1994), a vehicle valued between $2,500 and $4,500 which was used to transport a stolen color TV worth $300 from the scene of the crime to another person was ordered forfeited; and in State ex rel. McGehee v. 1989 Ford F-150, 888 P.2d 1036 (Okla.Ct.App.1994), a truck used to transport fifteen grams of marijuana was ordered forfeited.

Additionally, there was no evidence presented to the trial court that innocent third parties would be harmed by the forfeiture. We would also note that Appellant could have been fined between $1,000 and $10,000 due to his being convicted of a felony. KRS 534.030(1). Based on this, we find the forfeiture was not excessive.

We therefore affirm the order of the trial court denying the return of the money to Appellant.

ALL CONCUR.

      . Even though these cases involve the forfeiture of vehicles, they are still illustrative of the issue.


author: VANMETER, Judge.

text:
    Jerrel DOSTER, Appellant, v. KENTUCKY PAROLE BOARD, Justice and Public Safety Cabinet, Appellee.
    No. 2009-CA-000168-MR.
    Court of Appeals of Kentucky.
    April 2, 2010.
    Jerrel Doster, Fredonia, KY, pro se appellant.
    J. Todd Henning, Justice & Public Safety Cabinet, Frankfort, KY, for appellee.

      Before LAMBERT and VANMETER, Judges; HARRIS, Senior Judge.

      . Senior Judge William R. Harris sitting as Special Judge by assignment of the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes (KRS) 21.580.

   OPINION

VANMETER, Judge.

Jerrel Doster appeals pro se from an order of the Franklin Circuit Court, entered December 18, 2008, sua sponte dismissing his petition for a writ of mandamus. For the following reasons, we vacate the trial court’s order and remand to that court for further proceedings.

Doster is currently serving a 15-year prison sentence for trafficking in a controlled substance in the first degree (two counts), theft by deception over $300, forgery in the second degree, unlawful possession of a methamphetamine precursor, possession of a handgun by a convicted felon, and possession of a controlled substance in the first degree. When Doster became eligible for parole after serving three years, the Kentucky Parole Board reviewed his file pursuant to KRS 439.340(2) and deferred his case for thirty months.

Subsequent to the Board’s deferment of his case, Doster sought reconsideration of the denial of parole, asserting that the Board had relied on his resident record card which contained a clerical error. Apparently Doster’s card stated erroneously that he was serving a 55-year sentence, rather than a 15-year sentence. The record indicates the card was corrected to reflect the accurate term of imprisonment by the time the Board denied Doster’s request for reconsideration.

Following the Board’s denial of his request for reconsideration, Doster petitioned the trial court for a writ of mandamus to compel the Board to reconsider or review his case, stating that he had “more than clarified to [the Board] that their decision was based on a clerical error[.]” The court sua sponte dismissed the petition pursuant to CR 12.02(f), on the basis that it failed to state a claim for which relief could be granted. Specifically, the court noted: “Decisions of the Kentucky Parole Board are not reviewable absent extraordinary legal circumstances, which do not exist in this situation.” This appeal followed.

On appeal, Doster contends that the court abused its discretion in sua sponte dismissing his petition. He asserts that the Board’s decision was based on incorrect information and as a result, his procedural due process right to a fair parole hearing under the Fourteenth Amendment of the United States Constitution and Section Two of the Kentucky Constitution was violated. He further asserts that the court’s sua sponte dismissal of the petition failed to comport with minimal due process requirements, including the provision of notice and a hearing. With regard to Doster’s latter contention, we agree.

Generally speaking, Kentucky law strongly discourages sua sponte dismissals under CR 12.02. See Storer Commc’ns of Jefferson County, Inc. v. Oldham, County Bd. of Educ., 850 S.W.2d 340 (Ky.App.1993); Gall v. Scroggy, 725 S.W.2d 867 (Ky.App.1987). Cf. Fourroux v. City of Shepherdsville, 148 S.W.3d 303 (Ky.App.2004) (holding that a trial court’s sua sponte grant of summary judgment, on the basis that the appellants lacked standing, was proper where the issue of standing had been extensively briefed and argued by the parties).

In Gall v. Scroggy, 725 S.W.2d 867, 869 (Ky.App.1987), a panel of this court held that the trial court improperly sua sponte dismissed a complaint filed by prison inmates for failure to state a claim, pursuant to CR 12.02(f), when no answers had been filed, no motion for dismissal had been made, and neither notice nor a hearing had been provided to the parties. In particular, the court noted that CR 12.02

clearly contemplates that these defenses will be raised in the form of a motion by a party defendant, not by the court. There is no authority in Kentucky that we are aware of which would allow a circuit coui't to dismiss a complaint sua sponte for failure to state a claim with or without notice or an opportunity to be heard.
We think it better that a trial court refrain from dismissing a complaint for failure to state a claim unless it is brought to its attention by way of pleading or motion to dismiss as set forth in CR 12.02. If, however, a trial court is so inclined to dismiss sua sponte, we believe it must afford the plaintiff certain minimal procedures as established by the Court in Tingler [v. Marshall, 716 F.2d 1109 (6th Cir.1983) ] as follows:
(1) allow service of the complaint upon the defendant; (2) notify all parties of its intent to dismiss the complaint; (3) give the plaintiff a chance to either amend his complaint or respond to the reasons stated by the district court in its notice of intended sua sponte dismissal; (4) give the defendant a chance to respond or file an answer or motions; and (5) if the claim is dismissed, state its reasons for the dismissal. Id. pp. 1111— 1112.

Gall, 725 S.W.2d at 869.

The holding in Gall, with respect to minimal due process requirements, was reaffirmed in Storer. In Storer, the court noted: “In Gall v. Scroggy, supra, we discussed the policy reasons which dictate against a court dismissing a complaint without a motion or notice of such intent. Most significant to us was the loss, or the appearance thereof, of the court’s detachment and its assumption of an adversarial role.” Storer, 850 S.W.2d at 341. The court emphasized that it “clearly attempted to discourage sua sponte dismissals under CR 12.02 in Gall, and provided a list of ‘minimal procedures’ ‘in order to ensure due process....’” Id. (quoting Gall, 725 S.W.2d at 869). Although answers had been filed in Storer, whereas none had been filed in Gall, the court nevertheless found this distinction immaterial and held that the trial court’s sua sponte grant of judgment for the appellees on the merits, without a motion for dismissal by any party, or briefs or arguments on the issues, violated the plaintiffs due process rights. Id. at 341-42.

More recently, a trial court’s sua sponte grant of summary judgment, on the basis that the appellants lacked standing, was held to be proper where the issue of standing had been extensively briefed and argued by all parties. See Fourroux, 148 S.W.3d at 305. In Fourroux, the court distinguished the situation therein from that of Storer Communications, on the basis that the parties in Fomroux had an opportunity to present their arguments to the trial court. See id.

In the present case, the trial court sua sponte dismissed Doster’s complaint, without a motion for dismissal or summary judgment by any party, and without providing notice of its intent to dismiss and affording the parties an opportunity to respond. Irrespective of the merits of Dost-er’s due process claim relating to his resident record card, as to which we express no opinion, we find that the court improperly sua sponte dismissed his complaint without following the minimal due process procedures set forth in Gall.

The order of the Franklin Circuit Court is vacated and this case is remanded to that court for further proceedings.

ALL CONCUR.

      . Kentucky Rules of Civil Procedure.

      . Arguably, this issue might be subject to harmless error analysis under CR 61.01. However, no case has been cited in which the harmless error doctrine has been applied to circumstances such as those presently before us.