Esquared Communications, LLC v. Don Yates, Jr.

CourtCourt of Appeals of Kentucky
DecidedSeptember 19, 2025
Docket2024-CA-0621
StatusPublished

This text of Esquared Communications, LLC v. Don Yates, Jr. (Esquared Communications, LLC v. Don Yates, Jr.) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Esquared Communications, LLC v. Don Yates, Jr., (Ky. Ct. App. 2025).

Opinion

RENDERED: SEPTEMBER 19, 2025; 10:00 A.M. TO BE PUBLISHED

Commonwealth of Kentucky Court of Appeals

NO. 2024-CA-0621-MR

ESQUARED COMMUNICATIONS, LLC; ESQUARED 2 COMMUNICATIONS, LLC; DALE COOPER; AND COOPER ENTERPRISES APPELLANTS

APPEAL FROM MERCER CIRCUIT COURT v. HONORABLE JEFFREY L. DOTSON, JUDGE ACTION NO. 20-CI-00089

DON YATES, JR.; YATES ENTERPRISES, INC.; AND SUMMIT VOIP, LLC APPELLEES

OPINION AFFIRMING IN PART, REVERSING IN PART, AND REMANDING

** ** ** ** **

BEFORE: THOMPSON, CHIEF JUDGE; KAREM AND TAYLOR, JUDGES. KAREM, JUDGE: Dale Cooper, and companies eSquared, and eSquared 2

(collectively “Cooper”) appeal from the circuit court’s order granting partial

summary judgment in favor of former business partner, Don Yates, and companies

Yates Enterprises (collectively “Yates”) and Summit VOIP. They also appeal the

denial of their summary judgment motion as to the cross-complaint. Specifically,

Cooper contends the court failed to acknowledge the existence of disputed material

facts and failed to follow established caselaw. This Court, having been fully

briefed on the matter and carefully considering the merits, hereby affirms the

Mercer Circuit Court’s Order in part, reverses in part, and remands with further

instructions.

FACTUAL AND PROCEDURAL BACKGROUND

a. Factual Background

ESquared is a telecommunications business formed by Cooper and

Yates in November of 2006 as a limited liability company. A one-page,

handwritten document, dated “1-23-07” entitled “Ownership Agreement” was

signed by both men. The document detailed the percentages of ownership, stock

value, and shares to which each was entitled: Cooper – 55% and Yates – 45%. It

further specified Cooper would be responsible for “telecom,” while Yates would

be responsible for “operations.” Both had responsibilities for contracts, hiring, and

financials. Cooper was to receive a salary of $8,000. Yates was to receive a salary

-2- of $3,000 and $5,000 deferred. The agreement did not specify the frequency of the

payments. One checking account was established for the company with both men

as the only signatories. Both parties agree, at no time were Cooper or Yates ever

officers, directors, or employees of eSquared or eSquared 2.

Cooper maintains that he and Yates executed a supplemental

Operating Agreement and an Amended Operating Agreement for eSquared, both

drafted by the law firm Wyatt, Tarrant, and Combs in July of 2007. Yates disputes

the existence of finalized documents. More importantly, no executed Operating

Agreement, or Amended Operating Agreement, was ever produced or entered into

evidence. While Cooper was able to produce incomplete drafts of documents

entitled Operating Agreement and Amendment to Operating Agreement, no

executed document was produced. Notably, each incomplete draft contained a

page wherein the dollar amount of initial capital contribution by each member

should have been listed, but instead was blank. While there is evidence of

discussions regarding the proposed content of these documents, no testimony was

elicited concerning the finalization of either.

In 2018, unbeknownst to Cooper, eSquared 2 was formed by Yates,

and eSquared was dissolved. However, eSquared 2 never opened its own separate

bank account but, instead, used the eSquared bank account.

-3- In the summer of 2019, Cooper experienced health issues prompting

him to get his affairs in order. In so doing, Cooper learned of the dissolution of

eSquared and the formation of eSquared 2 by Yates. In reviewing the accounts of

eSquared 2, he found what he believed to be questionable payments to Yates.

Cooper took over running eSquared 2 in 2019, and Yates formed the company

Summit VOIP thereafter. Subsequently, Cooper filed suit in 2020, making

numerous claims against Yates and his companies.

b. Procedural Background

Cooper initially filed suit in March of 2020, making numerous claims

against Yates and Yates Enterprises. Yates answered and countersued, asserting

claims against the eSquared companies and Cooper. The court entered the first of

several scheduling orders on June 30, 2020.

During the course of litigation, Cooper discovered Yates had formed

the company, Summit VOIP. By agreement of the parties, Cooper filed an

Amended Complaint on August 12, 2020, to assert claims against Summit VOIP,

to which the defendants answered and filed counterclaims on August 14, 2020. On

February 19, 2021, the court entered an Agreed Amended Scheduling Order.

-4- On October 11, 2021, Cooper filed the Second Amended Complaint.1

On October 18, 2021, Yates and Summit VOIP answered the new complaint and

filed Second Amended Counterclaims against Cooper. On January 12, 2022, the

court entered yet another Agreed Amended Scheduling Order. In April of 2022,

Cooper named accountant R. Wayne Stratton (“Stratton”) as the expert he intended

to call at trial. In addition, Cooper served Yates with an expert witness report

prepared by Stratton.

Finally, on August 25, 2022, the court entered an Agreed Second

Amended Scheduling Order wherein the deadline for all factual discovery was

identified as December 1, 2022, and the expert witness discovery deadline was set

for March 1, 2023. Stratton was deposed by Yates and his deposition testimony

was filed with the court on February 15, 2023. Exhibits were produced during the

deposition entitled “Distributions and Interest Due Cooper – ESQUARED” and

“Distributions and Interest Due Cooper from ESQUARED 2.” Totals allegedly

owed to Cooper were listed as $467,637 and $61,480, respectively.

Both parties filed for summary judgment. The trial court granted

partial summary judgment for both Yates and Cooper on May 29, 2024.

1 Cooper’s Second Amended Complaint added claims against a new party to the litigation, Stephen Weafer. Mr. Weafer, up to that point, had been a fact witness in the case. The claims against Mr. Weafer are not at issue in this appeal. -5- Specifically, the order dismissed the following claims of Cooper’s Second

Amended Complaint:

Count I – Breach of Fiduciary Duty (against Yates and Yates Enterprises)

Count III – Breach of Contract/Operating Agreement (against Yates and Yates Enterprises)

Count IV – Conversion (against Yates and Yates Enterprises)

Count VI – Accounting/Constructive Trust (against Yates and Yates Enterprises)

Count VII – Tortious Interference (against Yates, Yates Enterprises, and Summit VOIP)

The court further denied summary judgment for Cooper on all

counterclaims by Yates except the tortious interference claim with regard to the

Ownership Agreement under Count VI of the Second Amended Counterclaim.

This appeal followed by Cooper as to the court’s granting of summary judgment to

Yates and the court’s denial of summary judgment as to Cooper. 2

STANDARD OF REVIEW

Summary judgment “shall be rendered forthwith if the pleadings,

depositions, answers to interrogatories, stipulations, and admissions on file,

2 Cooper’s request for certification of the record did not include any recordings of proceedings or arguments in the trial court. Our analysis is thus limited to review of the written record and the parties’ briefs. -6- together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a matter of

law.” CR3 56.03.

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