RENDERED: SEPTEMBER 23, 2022; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals NO. 2021-CA-0713-MR
MICHAEL D. SMITH APPELLANT
APPEAL FROM GARRARD CIRCUIT COURT v. HONORABLE HUNTER DAUGHERTY, JUDGE ACTION NO. 21-CI-00034
DEREK GORDON; RACHEL YAVELAK; THOMAS LYONS; JOE JARRELL; STEPHEN MILNER; WILLIAM HAYES; PATRICK NASH; GUTHRIE TRUE; WILLIS COFFEY; JULIE ROBERTS GILLUM; JEFF HOOVER; ANGGELIS & GORDON, PLLC; COFFEY & FORD, PSC; HAYES LAW GROUP; TRUE, GUARNIERI, AYER, LLP; THE COURIER JOURNAL; WKYT 27 NEWS; WDKY FOX NEWS; WLEX COMMUNICTIONS; WTVQ 36 NEWS; THE LEXINGTON HERALD LEADER; AND UNKOWN OTHERS1 APPELLEES
OPINION AFFIRMING
** ** ** ** **
1 Pursuant to the usual practice in our Court, the names of these party-appellees are taken verbatim from the appellant’s notice of appeal. Here, this means including names which are misspelled, as well as the common names for media enterprises rather than the appropriate corporate owners. We need not consider the legal effect of this latter error in order to affirm the circuit court’s dismissal of the appellant’s suits. BEFORE: GOODWINE, JONES, AND MAZE, JUDGES.
JONES, JUDGE: Michael D. Smith appeals from multiple orders dismissing his
complaint with prejudice which were entered by the Garrard Circuit Court on April
1, 2021, April 15, 2021, and June 3, 2021. The circuit court’s orders dismissed
Smith’s complaint for failure to state a claim pursuant to CR2 12.02(f). We affirm.
I. BACKGROUND
Over twelve years ago, Smith owned and operated oil and gas
companies operating in multiple states, including Kentucky. His business dealings
came to an ignominious end when he was accused of misrepresenting the viability
and productivity of oil and gas wells to his investors. “In 2010, a federal jury
convicted Smith of conspiracy to commit mail fraud, in violation of 18 U.S.C. [3] §
1349, and multiple substantive counts of mail fraud, in violation of 18 U.S.C. §
1341.” United States v. Smith, No. 21-5371, 2021 WL 7210170, at *1 (6th Cir.
Nov. 15, 2021) (unreported). The federal trial court then sentenced Smith to one
hundred twenty months of imprisonment and three years of supervised release. Id.
The Sixth Circuit thereafter affirmed the conviction and sentence. United States v.
Smith, 749 F.3d 465 (6th Cir. 2014).
2 Kentucky Rules of Civil Procedure. 3 United States Code.
-2- Since being released from prison in February 2020, Smith has been
uniquely focused on the idea that his indictment did not constitute a “true bill”
because it did not contain signatures from the grand jury foreperson and the
government’s prosecuting attorney. Smith, 2021 WL 7210170, at *1. In actuality,
however, the indictment was merely sealed, and a redacted version used, in order
to ensure the confidentiality of the grand jury. Id. In late 2020 through early 2021,
Smith filed multiple motions in federal district court requesting unredacted copies
of his indictment, followed by multiple coram nobis petitions asserting his actual
innocence. Id. The district court denied Smith’s motions and, in a written order,
stated, “[t]he Court has reviewed the document in question and CERTIFIES that
the indictment was properly brought with the signature of the foreperson of the
grand jury, resulting in the conviction of Smith on some, but not all, of the charges
listed therein.” Id. The Sixth Circuit affirmed this order in its unreported opinion.
Id. at *2.
After the federal courts denied his motions and petitions, Smith,
currently residing in Lancaster, Kentucky, turned his efforts at vindication toward
the Kentucky courts. On February 19, 2021, Smith filed the pro se complaint
relevant to the present appeal in Garrard Circuit Court. The defendant-appellees
may be broadly categorized into three groups: (1) attorneys who previously
represented Smith; (2) attorneys who represented Smith’s codefendants; and (3)
-3- media organizations which covered Smith’s federal criminal case. The complaint
is unfocused, but it generally alleges that the attorneys and media all conspired
with the government to imprison Smith despite his actual innocence, which Smith
asserts is proven by the lack of an indictment for his criminal charges. Smith’s
complaint essentially claims the attorneys committed legal malpractice, the media
organizations defamed him, and all of the parties engaged in a civil conspiracy
against him.
The defendant-appellees filed separate motions to dismiss the
complaint based on its failure to state a claim for which relief may be granted, and
the circuit court granted these motions with prejudice in a series of orders entered
in April and June 2021. Smith moved the circuit court to alter, amend, or vacate
the judgments, as well as to provide findings of fact and conclusions of law. The
circuit court denied the motions, ruling that its dismissals pursuant to CR 12 did
not consider matters outside the pleadings and that no findings or conclusions were
required in such cases by our Rules of Civil Procedure. This appeal followed.
II. ANALYSIS
Smith appeals from the circuit court’s dismissal for failure to state a
claim pursuant to CR 12.02(f). We review such appeals de novo. Hardin v.
Jefferson County Board of Education, 558 S.W.3d 1, 5 (Ky. App. 2018). “It is
proper to grant a CR 12.02(f) dismissal motion if . . . ‘it appears the pleading party
-4- would not be entitled to relief under any set of facts which could be proved in
support of his [or her] claim[.]’” Id. (quoting James v. Wilson, 95 S.W.3d 875, 883
(Ky. App. 2002)). For purposes of the dismissal motion, we must accept the
complaint’s factual allegations as true; however, we will strip the complaint of any
statements which are merely conclusory. Moss v. Robertson, 712 S.W.2d 351, 352
(Ky. App. 1986). “Stated another way, the court must ask if the facts alleged in the
complaint can be proved, would the plaintiff be entitled to relief?” James, 95
S.W.3d at 884.
For his sole issue on appeal, Smith asserts the circuit court
erroneously dismissed his complaint. His pro se brief covers similar ground as his
pro se complaint, asserting he is the victim of a conspiracy by the appellees which
resulted in his conviction and sentence in federal prison. He asserts there was no
indictment in his criminal case, presuming any redacted indictment without
signatures must be fraudulent. Furthermore, Smith apparently asked for a copy of
the unredacted indictment in a Freedom of Information / Privacy Acts (FOIPA)
request he sent to the Federal Bureau of Investigation (FBI). He then points to the
response letter from the FBI, which was “unable to identify records responsive to
[his] request,” as proof that he was convicted without a bona fide indictment.
The appellees assert the circuit court properly dismissed Smith’s
complaint for a number of different reasons, but all of them agree that Smith’s
-5- complaint is untimely. Smith’s conviction was over ten years ago. The attorney
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RENDERED: SEPTEMBER 23, 2022; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals NO. 2021-CA-0713-MR
MICHAEL D. SMITH APPELLANT
APPEAL FROM GARRARD CIRCUIT COURT v. HONORABLE HUNTER DAUGHERTY, JUDGE ACTION NO. 21-CI-00034
DEREK GORDON; RACHEL YAVELAK; THOMAS LYONS; JOE JARRELL; STEPHEN MILNER; WILLIAM HAYES; PATRICK NASH; GUTHRIE TRUE; WILLIS COFFEY; JULIE ROBERTS GILLUM; JEFF HOOVER; ANGGELIS & GORDON, PLLC; COFFEY & FORD, PSC; HAYES LAW GROUP; TRUE, GUARNIERI, AYER, LLP; THE COURIER JOURNAL; WKYT 27 NEWS; WDKY FOX NEWS; WLEX COMMUNICTIONS; WTVQ 36 NEWS; THE LEXINGTON HERALD LEADER; AND UNKOWN OTHERS1 APPELLEES
OPINION AFFIRMING
** ** ** ** **
1 Pursuant to the usual practice in our Court, the names of these party-appellees are taken verbatim from the appellant’s notice of appeal. Here, this means including names which are misspelled, as well as the common names for media enterprises rather than the appropriate corporate owners. We need not consider the legal effect of this latter error in order to affirm the circuit court’s dismissal of the appellant’s suits. BEFORE: GOODWINE, JONES, AND MAZE, JUDGES.
JONES, JUDGE: Michael D. Smith appeals from multiple orders dismissing his
complaint with prejudice which were entered by the Garrard Circuit Court on April
1, 2021, April 15, 2021, and June 3, 2021. The circuit court’s orders dismissed
Smith’s complaint for failure to state a claim pursuant to CR2 12.02(f). We affirm.
I. BACKGROUND
Over twelve years ago, Smith owned and operated oil and gas
companies operating in multiple states, including Kentucky. His business dealings
came to an ignominious end when he was accused of misrepresenting the viability
and productivity of oil and gas wells to his investors. “In 2010, a federal jury
convicted Smith of conspiracy to commit mail fraud, in violation of 18 U.S.C. [3] §
1349, and multiple substantive counts of mail fraud, in violation of 18 U.S.C. §
1341.” United States v. Smith, No. 21-5371, 2021 WL 7210170, at *1 (6th Cir.
Nov. 15, 2021) (unreported). The federal trial court then sentenced Smith to one
hundred twenty months of imprisonment and three years of supervised release. Id.
The Sixth Circuit thereafter affirmed the conviction and sentence. United States v.
Smith, 749 F.3d 465 (6th Cir. 2014).
2 Kentucky Rules of Civil Procedure. 3 United States Code.
-2- Since being released from prison in February 2020, Smith has been
uniquely focused on the idea that his indictment did not constitute a “true bill”
because it did not contain signatures from the grand jury foreperson and the
government’s prosecuting attorney. Smith, 2021 WL 7210170, at *1. In actuality,
however, the indictment was merely sealed, and a redacted version used, in order
to ensure the confidentiality of the grand jury. Id. In late 2020 through early 2021,
Smith filed multiple motions in federal district court requesting unredacted copies
of his indictment, followed by multiple coram nobis petitions asserting his actual
innocence. Id. The district court denied Smith’s motions and, in a written order,
stated, “[t]he Court has reviewed the document in question and CERTIFIES that
the indictment was properly brought with the signature of the foreperson of the
grand jury, resulting in the conviction of Smith on some, but not all, of the charges
listed therein.” Id. The Sixth Circuit affirmed this order in its unreported opinion.
Id. at *2.
After the federal courts denied his motions and petitions, Smith,
currently residing in Lancaster, Kentucky, turned his efforts at vindication toward
the Kentucky courts. On February 19, 2021, Smith filed the pro se complaint
relevant to the present appeal in Garrard Circuit Court. The defendant-appellees
may be broadly categorized into three groups: (1) attorneys who previously
represented Smith; (2) attorneys who represented Smith’s codefendants; and (3)
-3- media organizations which covered Smith’s federal criminal case. The complaint
is unfocused, but it generally alleges that the attorneys and media all conspired
with the government to imprison Smith despite his actual innocence, which Smith
asserts is proven by the lack of an indictment for his criminal charges. Smith’s
complaint essentially claims the attorneys committed legal malpractice, the media
organizations defamed him, and all of the parties engaged in a civil conspiracy
against him.
The defendant-appellees filed separate motions to dismiss the
complaint based on its failure to state a claim for which relief may be granted, and
the circuit court granted these motions with prejudice in a series of orders entered
in April and June 2021. Smith moved the circuit court to alter, amend, or vacate
the judgments, as well as to provide findings of fact and conclusions of law. The
circuit court denied the motions, ruling that its dismissals pursuant to CR 12 did
not consider matters outside the pleadings and that no findings or conclusions were
required in such cases by our Rules of Civil Procedure. This appeal followed.
II. ANALYSIS
Smith appeals from the circuit court’s dismissal for failure to state a
claim pursuant to CR 12.02(f). We review such appeals de novo. Hardin v.
Jefferson County Board of Education, 558 S.W.3d 1, 5 (Ky. App. 2018). “It is
proper to grant a CR 12.02(f) dismissal motion if . . . ‘it appears the pleading party
-4- would not be entitled to relief under any set of facts which could be proved in
support of his [or her] claim[.]’” Id. (quoting James v. Wilson, 95 S.W.3d 875, 883
(Ky. App. 2002)). For purposes of the dismissal motion, we must accept the
complaint’s factual allegations as true; however, we will strip the complaint of any
statements which are merely conclusory. Moss v. Robertson, 712 S.W.2d 351, 352
(Ky. App. 1986). “Stated another way, the court must ask if the facts alleged in the
complaint can be proved, would the plaintiff be entitled to relief?” James, 95
S.W.3d at 884.
For his sole issue on appeal, Smith asserts the circuit court
erroneously dismissed his complaint. His pro se brief covers similar ground as his
pro se complaint, asserting he is the victim of a conspiracy by the appellees which
resulted in his conviction and sentence in federal prison. He asserts there was no
indictment in his criminal case, presuming any redacted indictment without
signatures must be fraudulent. Furthermore, Smith apparently asked for a copy of
the unredacted indictment in a Freedom of Information / Privacy Acts (FOIPA)
request he sent to the Federal Bureau of Investigation (FBI). He then points to the
response letter from the FBI, which was “unable to identify records responsive to
[his] request,” as proof that he was convicted without a bona fide indictment.
The appellees assert the circuit court properly dismissed Smith’s
complaint for a number of different reasons, but all of them agree that Smith’s
-5- complaint is untimely. Smith’s conviction was over ten years ago. The attorney
appellees point to KRS4 413.245, which requires professional service malpractice
suits to be brought within one year of being discovered by the injured party. They
also cite KRS 413.140(1)(c), which contains a one-year statute of limitation for
conspiracy actions. Similarly, the media appellees point out that defamation
claims must be brought within one year pursuant to KRS 413.140(1)(d).
Smith contends his imprisonment constituted a disability tolling the
limitation statutes. However, the General Assembly repealed the statutory basis
for prison inmate disability, KRS 413.310, more than thirty years ago.5 We are
obliged to carry out the legislative intent of a constitutional enactment. See, e.g.,
University of the Cumberlands v. Pennybacker, 308 S.W.3d 668, 683-84 (Ky.
2010); Hale v. Combs, 30 S.W.3d 146, 151 (Ky. 2000). The expired statutes of
limitation on Smith’s claims provide sufficient grounds to affirm the circuit court’s
order dismissing Smith’s complaint.
Furthermore, the appellees cite numerous other grounds, many of
which are well taken, supporting the circuit court’s dismissal of the complaint.
The attorney appellees cite the Exoneration Rule announced in Lawrence v.
4 Kentucky Revised Statutes. 5 1990 Ky. Acts ch. 176, § 2 (eff. Jul. 13, 1990); see Hamilton v. Meridian Mut. Ins. Co., No. 2002-CA-001246-MR, 2003 WL 22064128, at *3 n.1 (Ky. App. Sep. 5, 2003); Duffy v. Kindred Healthcare, Inc., No. 2004-CA-001523-MR, 2005 WL 1057547, at *2 n.3 (Ky. App. May 6, 2005).
-6- Bingham, Greenebaum, Doll, L.L.P., 567 S.W.3d 133 (Ky. 2018). This Rule is
summarized as follows:
[T]o survive a motion to dismiss for failure to state a claim in a professional malpractice case against a criminal defense attorney, the convicted client must plead in his complaint that he has been exonerated of the underlying criminal conviction. He or she need not prove actual innocence, but they also may not rely solely upon a claim of actual innocence in the absence of an exonerating court decision through appeal or post- conviction order.
Id. at 141. No such exoneration has occurred in Smith’s case. In addition, the
attorney appellees who did not directly represent Smith cite Shoney’s, Inc. v.
Lewis, 875 S.W.2d 514 (Ky. 1994), which discusses how lawyers are bound by
professional ethics and the Supreme Court Rules to refrain from communicating
about the subject of representation with those represented by other lawyers. Id. at
515 (citing SCR6 3.130 (4.2)). Pushing aside the matter of not owing Smith a duty
which would give rise to a negligence claim, the attorney appellees who did not
represent Smith ran the risk of violating professional ethics rules if they had
attempted the sort of aid which Smith now claims they should have provided.
For their part, in addition to the statute-of-limitation defense, the
media appellees also assert Smith’s claims against them are inadequately pleaded.
Smith fails to allege any of the essential elements of defamation: “1. defamatory
6 Rules of the Supreme Court of Kentucky.
-7- language 2. about the plaintiff 3. which is published and 4. which causes injury to
reputation.” Stringer v. Wal-Mart Stores, Inc., 151 S.W.3d 781 (Ky. 2004)
(citation omitted), overruled on other grounds by Toler v. Süd-Chemie, Inc., 458
S.W.3d 276 (Ky. 2014). Smith identifies no specific incidents of defamation by
the media appellees. The media appellees further assert that Smith cannot show
their reporting of Smith’s trial contained fabrications, and the truth is a complete
defense to defamation claims. Estepp v. Johnson County Newspapers, Inc., 578
S.W.3d 740, 744 (Ky. App. 2019).
All of these defenses bear considerable merit, in addition to showing
the simple untimeliness of Smith’s claims. However, we would be remiss if we
did not mention that Smith’s complaint is problematic because it rests upon a claim
that there was no valid indictment in his federal criminal case – a claim which is
completely refuted by the record. Smith repeatedly asserts he was convicted upon
a fraudulent indictment because it lacked the signatures required. However, in
doing so, he confuses a sealed and redacted indictment for either an invalid
indictment or no indictment at all. We have reviewed the record, and a copy of
Smith’s redacted indictment is contained within. Additionally, the federal district
judge went so far as to send an order to Smith and the circuit court which denied
requests for the unredacted indictment, but the district judge personally certified
that the sealed indictment was properly brought with the appropriate signatures.
-8- Put bluntly, a null premise lies at the core of Smith’s complaint, and the circuit
court did not err in dismissing it.
III. CONCLUSION
For the foregoing reasons, we affirm the Garrard Circuit Court’s
orders of dismissal.
ALL CONCUR.
-9- BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE ESTATE OF STEVE MILNER: Michael Smith, pro se Lancaster, Kentucky Katherine T. Watts Patricia C. Le Meur Louisville, Kentucky
BRIEF FOR APPELLEES GUTHRIE TRUE AND THE LAW FIRM OF TRUE, GUARNIERI, AYER, LLP; WILLIAM HAYES AND THE LAW FIRM OF HAYES LAW GROUP; WILLIS COFFEY AND THE LAW FIRM OF COFFEY & FORD, PSC; JULIE ROBERTS GILLUM; AND JEFF HOOVER:
J. Hadden Dean Danville, Kentucky
BRIEF FOR APPELLEES DEREK GORDON; RACHEL YAVELAK; AND ANGGELIS & GORDON, PLLC:
Kyle M. Virgin David T. Cecil Daenayia Harris Lexington, Kentucky
-10- BRIEF FOR APPELLEES THE LEXINGTON HERALD LEADER; THE COURIER JOURNAL; WLEX COMMUNICATIONS, LLC; WKYT 27 NEWS; WTVQ 36 NEWS; AND WDKY FOX NEWS:
Jon L. Fleischaker Michael P. Abate William R. Adams Louisville, Kentucky
BRIEF FOR APPELLEES PATRICK NASH AND NASH MARSHALL, PLLC:
Matthew W. Breetz Bethany A. Breetz Louisville, Kentucky
Joshua F. Barnette Lexington, Kentucky
BRIEF FOR APPELLEE JOE A. JARRELL:
Joe A. Jarrell, pro se Paris, Kentucky
-11-