Port Midway, LLC v. Snakeman Properties, LLC

Opinion

RENDERED: AUGUST 21, 2026; 10:00 A.M.

NOT TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2024-CA-1375-MR

PORT MIDWAY, LLC; SUSAN MASTERMAN; AND WAYNE MASTERMAN APPELLANTS

APPEAL FROM FAYETTE CIRCUIT COURT v. HONORABLE KIMBERLY N. BUNNELL, JUDGE ACTION NO. 19-CI-04160

SNAKEMAN PROPERTIES, LLC; NORMAN W. UMPHENOUR; ROBERT CARTER; AND ROXANNE M. UMPHENOUR APPELLEES

OPINION

AFFIRMING

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BEFORE: ACREE, EASTON, AND L. JONES, JUDGES. ACREE, JUDGE: Appellants Wayne and Susan Masterman appeal the agreed order dismissing this litigation. We affirm.

Despite its seeming complexity, this case is quite simple. The Mastermans were the sole members of Port Midway, LLC. The Umphenours were the sole members of Snakeman Properties, LLC. Snakeman was Port Midway’s landlord. Port Midway operated a restaurant on the leased premises under the LLC’s registered assumed name, Goose and Gander. Port Midway sued Snakeman for breach of the lease contract. Before litigation ended, the Mastermans sold their interest in Port Midway to Robert Carter. Thereafter, Port Midway and Snakeman reached an agreement to settle the litigation. They moved jointly for an agreed order of dismissal. The trial court granted the order. The Mastermans, in their own names, appealed the agreed order.

The central issue here is whether the trial court erred when it enforced the contract conveying the Mastermans’ interest in Port Midway to Carter. We conclude it did not err because we reach the same conclusion on de novo review.

BACKGROUND

On November 22, 2019, Port Midway sued Snakeman. None of the allegations in the claims, crossclaims, or counterclaims arising over the next several years of litigation matter on appeal.

What does matter is that, while the litigation remained pending, the Mastermans and Carter executed a contract, effective June 1, 2022, conveying the Mastermans’ interests in Port Midway to Carter. On March 13, 2024, the trial

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court determined the contract “satisfies all the required elements for a valid and enforceable contract” and is “sufficiently definite and [] not ambiguous.” Based on that finding, the trial court concluded: “Since June 1, 2022, the Mastermans have lacked the authority to exercise control over, or direction of, Port Midway LLC, and thus have lacked standing to assert, maintain, control, or direct any legal claims on behalf of Port Midway LLC.”

Thereafter, Carter directed Port Midway’s business and this litigation.

Aware of the Mastermans’ and Carter’s transaction, Snakeman moved to dismiss the litigation, citing KRS1 275.335(1)(a). That statute says: “a suit on behalf of the limited liability company may be brought in the name of the company only by . . . [o]ne (1) or more members of the company, who are authorized to sue by the vote of more than one half (1/2) of the number of members eligible to vote thereon[.]” KRS 275.335(1)(a). Snakeman alleged the Mastermans no longer owned Port Midway and thus lacked statutory authority to direct its litigation.

Of course, Carter now had the authority, based on the same statute, to continue prosecuting the litigation. But he did not want to. He supported Snakeman’s motion to dismiss, providing his affidavit in support.

Carter’s affidavit averred his purchase of Port Midway and objected that the Mastermans “continu[e] to sue in the name of Port Midway, LLC but no

1 Kentucky Revised Statutes.

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longer own the entity. I have not agreed to permit them to do this or assigned any rights belonging to Port Midway to the Mastermans to continue this lawsuit.” (Record (R.) 983). He continued: “I would like to settle this lawsuit with the landlord, and I have reached terms with the landlord to resolve the lawsuit and any other disputes between Port Midway, LLC and Snakeman Properties, LLC.” He further asserted:

I have not retained Richard Getty [the attorney the Mastermans hired when they owned Port Midway] to represent Port Midway, LLC in any capacity since I became the sole member and manager. I do not authorize Richard Getty to represent Port Midway, LLC in the lawsuit. He has never asked me for permission to continue representing the entity that I now own.

(R. 984).

Over the Mastermans’ objection and based on its enforcement of the contract, the trial court entered an order giving the parties a deadline within which “to negotiate and tender an agreed order of dismissal relative to claims involving Snakeman Properties, LLC, and Port Midway LLC[.]” Those parties complied and, on October 11, 2024, the trial court entered an order dismissing all claims by and between Port Midway and Snakeman.

The Mastermans appeal the March 13, 2024 interlocutory order made final by the October 11, 2024 order addressing all claims. They argue the trial court erred by finding they lack standing to pursue any claims. They base that

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challenge on another argument that the trial court erred when it enforced the contract selling their interest in Port Midway, LLC, to Carter.

STANDARD OF REVIEW

Standing is an issue of law and, therefore, our standard of review is de novo. Smith v. Smith, 235 S.W.3d 1 (Ky. App. 2006). “[I]nterpretation of a contract . . . is a question of law for the courts and is subject to de novo review.” Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381, 385 (Ky. App. 2002). “The interpretation of statutes is a matter of law which we review de novo.” Blackaby v. Barnes, 614 S.W.3d 897, 901 (Ky. 2021).

ANALYSIS

We start with the trial court’s interpretation of the “Purchase Agreement.” The Mastermans argue the agreement is ambiguous and should be interpreted after taking extrinsic evidence as conveying nothing more than the restaurant, Goose and Gander. We disagree.

“A contract is ambiguous if a reasonable person would find it susceptible to different or inconsistent interpretations.” Cantrell, 94 S.W.3d at 385. “The fact that one party may have intended different results, however, is insufficient to construe a contract at variance with its plain and unambiguous terms.” Id. “Absent an ambiguity in the contract, the parties’ intentions must be

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discerned from the four corners of the instrument without resort to extrinsic evidence.” Id.

We conclude this agreement speaks for itself and states in its entirety as follows:

PURCHASE AGREEMENT BETWEEN ROBERT CARTER, WAYNE & SUSAN MASTERMAN FOR THE GOOSE & GANDER / PORT MIDWAY LLC.

1. Robert Carter with [sic] pay Wayne & Susan Masterman $2500.00 per month for 60 months totaling $150000.00[.]

2. Payments are due by the 15th of every month starting July 15th, 2022 until balance is paid in full[.]

3. If Payment become [sic] 60 days delinquent, Wayne & Susan Masterman will have the right to take back the restaurant.

4. The purchase price will include all inventory, all equipment & furnishings (except for 3 of Susan’s Paintings)[.]

4a. Excluding cash in Bank Accounts[.]

5. Wayne & Susan Masterman will give Robert Carter reasonable time to transfer all licenses, utilities & Insurance[.]

6. Robert Carter will maintain a Life Insurance Policy to cover the balance of the purchase price[.]

7. Wayne & Susan Masterman will immediately pay Robert Carter $1000.00 a week until the purchase is done[.]

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8. Robert Carter will not be responsible for any legal action that is going on between the Landlord & Wayne & Susan Masterman.

9. Robert Carter will use the lease that Wayne & Susan Masterman Have [sic] with the Landlord until Robert Carter can workout a new lease with the Landlords[.]

10. Wayne & Susan Masterman will pay Robert Carter for the use of Gift Certificate purchased before the closing day and used up to 90 days after[.]

11. Robert Carter will take over the monthly payments of the new POS System Toast after the closing.

12. Wayne & Susan Masterman are responsible for all bills up until closing date & dues all receivables[.]

13. Closing date is to be June 1st 2022 if possible[.]

[signed] Wayne Masterman [signed] Robert Carter [signed] Susan Masterman

We determine whether a contract is ambiguous as a whole, beginning with its title. In this case, the title defines the subject matter of the transaction, i.e., what it is for. It clearly states the contract is “For The Goose & Gander / Port Midway LLC.” The record shows without contradiction that these are merely different names for the same legal entity, the former being its assumed name and the latter being its real name. KRS 365.015(1)(b)7. and (2)(a), (b).

Within the body of the contract, the parties set forth their respective considerations. In exchange for Carter’s enforceable promise to make specific scheduled payments of cash, he was to receive certain tangible and intangible

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property. No one disputes the property set out in the body of the contract was owned by Port Midway. If the parties intended the contract to be only a conveyance of property owned by Port Midway, they would have complied with the law governing a limited liability company’s transfer of its property, KRS 275.245. “[P]roperty of the limited liability company . . . may be transferred by an instrument of transfer executed by any member so authorized in the name of the limited liability company. . . . A member, solely by reason of being a member, shall not have authority to transfer property of the limited liability company.” KRS 275.245(1) and (2)(b) (emphasis added). This property was not sold “in the name of the limited liability company” but in the name of Wayne Masterman and Susan Masterman.

What did Wayne Masterman and Susan Masterman own? Together they owned 100% of Port Midway, LLC d/b/a Goose and Gander. That was all the record shows they owned. By this agreement, they sold what they owned.

One of the Mastermans’ arguments is that “The Court Fails To Consider Extrinsic Evidence Of A Lack Of Contract Formation Or Intent.” (Appellant’s Brief at 5.) We need go no further than this caption before rejecting this argument. It is well understood that courts may resort to extrinsic evidence to resolve an ambiguity in a contract but not to create an ambiguity where none

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exists. Frear v. P.T.A. Industries, Inc., 103 S.W.3d 99, 106 (Ky. 2003). It is easy enough to put that rule into practice.

A court’s step one is to read the contract itself, within its four corners as we say, to determine if it is ambiguous. If it is ambiguous, we move on to step two and “gather, if possible, the intention of the parties . . . by evaluating extrinsic evidence as to the parties’ intentions.” Id. at 106. However, if by reading the contract as a whole we find it unambiguous, we are prohibited from moving on to step two.

We find the contract unambiguous and will not consider extrinsic evidence.

The Mastermans also contend there was no contract at all because there was never any “meeting of the minds” or mutual assent. “[T]he question of whether a meeting of the minds created a binding contract is one of law, subject to de novo review.” PSC Industries, Inc. v. Toyota Boshoku America, Inc., 649 S.W.3d 288, 290 (Ky. App. 2022).

“As long as the parties demonstrate their mutual assent to the essential terms of an agreement, a written contract is deemed to exist.” General Steel Corp. v. Collins, 196 S.W.3d 18, 21 (Ky. App. 2006). A party’s execution of an unambiguous written contract is a manifestation of mutual assent. His assent will be found based on his signature alone even if he did not read it and he will be

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bound by that assent absent fraud. Mouanda v. Jani-King International, 653 S.W.3d 65, 80 (Ky. 2022). No fraud is alleged. “[T]hat one party may have intended different results . . . is insufficient to construe a contract at variance with its plain and unambiguous terms.” Cantrell, supra, at 385.

In hindsight, the Mastermans think the bargain they made was a bad one. However, we will not set aside a contract “solely on the basis that it constitutes a bad bargain.” Shraberg v. Shraberg, 939 S.W.2d 330, 334 (Ky. 1997).

We affirm the trial court’s order of March 13, 2024, finding the purchase agreement between the Mastermans and Carter an unambiguous enforceable contract. We proceed to the question of standing.

“Standing requires that a party have ‘a judicially recognizable interest in the subject matter of the suit.’” Commonwealth v. Yamaha Motor Mfg. Corp., 237 S.W.3d 203, 205 (Ky. 2007) (quoting HealthAmerica Corp. v. Humana Health Plan, Inc., 697 S.W.2d 946, 947 (Ky. 1985) (citation omitted)). By the purchase agreement, Carter acquired Port Midway, LLC, and all its tangible and intangible property, including Port Midway’s cause of action against its landlord. By the same agreement, the Mastermans divested themselves of that property. After June 1, 2022, they had no judicially recognizable interest in pursuing whatever relief Port Midway might receive for Snakeman’s alleged breach of the lease.

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To the contrary, by statute, as Snakeman argued below, “a suit on behalf of the limited liability company may be brought in the name of the company only by . . . members of the company . . . .” KRS 275.335(1)(a). The Mastermans are no longer members of the company. That was the basis for the trial court’s holding that they lack standing in the breach-of-lease complaint by Port Midway against Snakeman. Our de novo review of that ruling requires that we affirm the trial court’s ruling in its October 28, 2024 order that the Mastermans lack standing to participate in that litigation.

The Mastermans also argue that Carter breached the purchase contract they argue does not exist. They ask this Court to rescind the contract on that ground. We have no jurisdiction to do so. KY. CONST. § 111(2) (with exceptions not relevant here, “Court of Appeals shall have appellate jurisdiction only”).

Despite the Mastermans’ representation otherwise, we do not believe this argument is preserved. If they brought an action under this circuit court number, No. 19-CI-04160 (Fayette Circuit Court), they would have had to acknowledge the purchase agreement is an enforceable contract. If they want to pursue such relief, it must be by an original action in a Kentucky circuit court of proper venue.

Based on the foregoing, the trial court’s October 28, 2024 order and its interlocutory orders made final thereby are affirmed.

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ALL CONCUR.

BRIEFS FOR APPELLANTS: BRIEF FOR APPELLEES SNAKEMAN PROPERTIES, LLC;

Richard A. Getty NORMAN UMPHENOUR; AND David T. Faughn ROXANNE UMPHENOUR: Lexington, Kentucky Thomas C. Gleason

Jason Renzelmann

Louisville, Kentucky

BRIEF FOR APPELLEE ROBERT CARTER:

Zachary M. VanVactor

Louisville, Kentucky