Petzold v. Kessler Homes, Inc.

303 S.W.3d 467, 2010 Ky. LEXIS 18, 2010 WL 246058
CourtKentucky Supreme Court
DecidedJanuary 21, 2010
Docket2008-SC-000106-DG
StatusPublished
Cited by15 cases

This text of 303 S.W.3d 467 (Petzold v. Kessler Homes, Inc.) is published on Counsel Stack Legal Research, covering Kentucky Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Petzold v. Kessler Homes, Inc., 303 S.W.3d 467, 2010 Ky. LEXIS 18, 2010 WL 246058 (Ky. 2010).

Opinion

Opinion of the Court by

Justice VENTERS.

Appellants, Adolph and Marilyn Petzold, appeal from a decision of the Court of Appeals vacating a judgment of the Fay-ette Circuit Court against Appellee, Kes-sler Homes, Inc. (Kessler), on the grounds that the presiding Judge, Pamela Good-wine, was retroactively disqualified from presiding over the proceedings because the Petzolds are the parents of Judge Good-wine’s campaign treasurer in her 2003 campaign run for the circuit court bench. It is undisputed that Judge Goodwine was unaware of the association during the period she presided over the case. We granted discretionary review.

Because we conclude that the lower court erred in its determination that Judge Goodwine was retroactively disqualified, we reverse and remand the cause to the *469 Court of Appeals for consideration upon the merits of the issues left unaddressed by the court because of its disposition.

FACTUAL AND PROCEDURAL BACKGROUND

On August 30, 2000, the Petzolds and Kessler entered into a contract for the construction of a residence. Toward the end of the construction project, disputes arose between the parties concerning the quality of the work and Kessler’s billing practices. In light of the disagreements, the Petzolds refused to pay Kessler. The efforts of the parties to resolve their differences failed.

On October 14, 2002, Kessler filed suit against the Petzolds in Fayette Circuit Court seeking amounts it believed were owed by the Petzolds under the contract. The Petzolds filed a counterclaim asserting various causes of action relating to fraud, violations of the applicable building codes, and violations of Kentucky’s Consumer Protection Act. Protracted litigation followed. The parties waived their respective rights to a jury trial, and a four-day bench trial was held from August 29, 2005, to September 1, 2005, presided over by Judge Goodwine.

On February 3, 2006, Judge Goodwine entered an opinion, order, and judgment. The judgment dismissed Kessler’s claims against the Petzolds; awarded the Pet-zolds $21,668.00 upon their claim for building code violations; awarded the Petzolds $8,466.00 upon a finding that Kessler breached its duty of good faith and fair dealing, but dismissed the underlying fraud claim; dismissed the Petzolds claims for damages for other construction defects, for violation of the Consumer Protection Act, and for the loss of the use and enjoyment of their residence; and found that the Petzolds were entitled to recover their attorney fees and expenses, expert fees and expenses, and costs.

Both parties thereafter filed motions to alter, amend, or vacate. On May 2, 2006, the trial court entered an order denying Kessler’s motion to amend, sustaining the Petzolds’ motion to amend, and finalizing the award of $106,024.59 for attorney fees and expenses and $5,367.60 for expert fees. 1 Both parties appealed the trial court’s rulings to the Court of Appeals.

While the appeals were pending, Kessler learned that Judge Goodwine’s campaign treasurer during her 2003 run for the Fay-ette Circuit Court bench, Lisa Petzold Castle, was the Petzolds’ daughter. Concerned that this association undermined the fairness of the proceedings, on August 18, 2006, Kessler filed a CR 60.02 motion asking that Judge Goodwine’s orders of February 3 and May 2, 2006, be set aside. Kessler did not allege that Judge Good-wine had actual knowledge of the association, but requested that “[a]t minimum, [Kessler] requests the right to take discovery on the relationship between Your Hon- or and the Petzolds.” 2

Following a hearing, on September 7, 2006, Judge Goodwine denied the motion. In the order, Judge Goodwine stated that she did not know of the relationship during the pendency of the proceedings and thus could not have been influenced thereby; that under the circumstances at bar, even if she had known of the association she would not have been under an obligation to *470 recuse herself; but had the association come to light sooner, upon proper motion she would have recused herself. Judge Goodwine further concluded that the applicable Judicial Canons and ethical rules did not require her to retroactively recuse herself from the proceedings or to set aside her previous rulings in the case.

In her order Judge Goodwine provided the following narrative explaining her recollection and understanding of the facts underlying the situation:

1. Ms. Castle became this Court’s 3 personal certified public accountant in the fall of 2000 or early spring of 2001 by default. Prior to that time, Richard Bass, C.P.A., of Hisle & Company, was this Court’s personal certified public accountant and financial planner.
2. In the summer or fall of 2000, Mr. Bass left Hisle & Company and joined the firm where Ms. Castle worked. This Court is not certain what type of business or employment relationship existed between Mr. Bass and Ms. Castle, returns. The accountant turned out to be Lisa P. Castle. The Court did not know Ms. Castle prior to that meeting.
3. In late 2000 or early 2001, Mr. Bass left the practice of accountancy. As a courtesy to this Court as a client, he notified this Court of his intent to leave the practice to care for his ailing mother on a full-time basis.
4. Mr. Bass gave this Court the option of requesting my personal tax files or leaving them with the company. This Court chose to leave my files with the company to be handled by one of the other certified public accountants in the office.
5. In early 2001, when it came time to prepare my 2000 tax returns, this Court made an appointment with one of the accountants in the office to discuss the preparation of said returns. The accountant turned out to be Lisa P. Castle. The Court did not know Ms. Castle prior to that meeting.
6. The meeting was professional and cordial. At no time did this Court and Ms. Castle discuss anything other than business relating to the preparation of my tax returns.
7. The Court was satisfied with Ms. Castle’s services as well as the services of her associates and chose to have Ms. Castle continue to serve as her certified public accountant and financial planner.
8. In August of 2003 when this Court decided to seek the Office of Circuit Judge, I discussed a committee with my husband and closest advisors. We decided that my campaign treasurer should be a certified public accountant rather than a personal friend. I called Ms. Castle to see if she was interested in serving in that capacity. She agreed to serve. She signed the campaign checks and completed and signed the campaign finance reports. Her services were reported as an in-kind contribution.

Kessler does not dispute Judge Good-wine’s version of events, and makes no contention that she had actual knowledge that her campaign treasurer was the Pet-zolds’ daughter at the time she presided over the proceedings.

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Bluebook (online)
303 S.W.3d 467, 2010 Ky. LEXIS 18, 2010 WL 246058, Counsel Stack Legal Research, https://law.counselstack.com/opinion/petzold-v-kessler-homes-inc-ky-2010.