Reuben Gentry v. Tracy's Residential Re-Entry Center, Inc.

• Court: Court of Appeals of Kentucky
• Decided: May 8, 2026
• Docket: 2025-CA-0611
• Status: Unpublished

Opinion

RENDERED: MAY 8, 2026; 10:00 A.M. NOT TO BE PUBLISHED

Commonwealth of Kentucky Court of Appeals NO. 2025-CA-0611-MR

REUBEN GENTRY APPELLANT

APPEAL FROM FAYETTE CIRCUIT COURT v. HONORABLE JULIE M. GOODMAN, JUDGE ACTION NO. 25-CI-00153

TRACY’S RESIDENTIAL RE-ENTRY CENTER, INC. APPELLEE

OPINION AFFIRMING

** ** ** ** **

BEFORE: CALDWELL, MCNEILL, AND MOYNAHAN, JUDGES.

MOYNAHAN, JUDGE: Appellant Reuben Gentry (“Gentry”) appeals the Fayette

Circuit Court’s Order dismissing his claims against Appellee, Tracy’s Residential

Re-entry Center, Inc. (“Tracy’s”). Finding that the legal doctrine of claim

preclusion1 applies, we affirm.

1 Claim preclusion is a doctrine that prohibits relitigating claims that were or could have been litigated between the same parties in a prior action. See Miller v. Admin. Off. of Cts., 361 S.W.3d 867, 871 (Ky. 2011). Although often used synonymously with res judicata, that doctrine is broader as it refers to both claim preclusion and issue preclusion – two distinct concepts. Id. BACKGROUND

In this case, Gentry filed a complaint alleging breach of contract

related to a failure to pay rent and for waste (i.e., damages to the real property)

allegedly caused by Tracy’s. Tracy’s filed a Motion to Dismiss arguing that

Gentry’s lawsuit was barred because a previously litigated lawsuit2 (the

“Shields/Lee action” or “the original lawsuit”) between Chiquita Shields and

Doyle Lee had settled the exact claims asserted here against Tracy’s. Ultimately,

the circuit court granted Tracy’s requested dismissal, relying on claim preclusion

reasoning, though not including a written order to that effect.

The Contract/Lease

Because Tracy’s failed to file a brief, we primarily rely on the facts as

relayed in Gentry’s brief supplemented by the record below. The claims in the

original lawsuit and the underlying action on appeal all center on a contract/lease

between Gentry, as landlord, and Shields and Lee, as individuals connected to

Tracy’s, who functioned in a tenant capacity. More specifically, on May 17, 2023,

Gentry contracted3 with Mr. Doyle Lee, or Tracy’s, to rent with an option to

purchase property located at 3636 Bold Bidder Drive, Units A and B, Lexington,

2 Shields, et al. v. Gentry, 23-CI-2807, Fayette Circuit Court, Div. IV. 3 That contract was attached as Appendix A. The first page (page 1 of 13) of the contract listed the landlord names as “REUBEN GENTRY OR TRACY GENTRY” and the tenant name(s) as “DOYLE LEE OR TRACY’S HOUSE[.]”

-2- KY 40517 (hereinafter, “the property”). Page seven of the contract contained a

signature section which was signed by Gentry, as landlord, and on the lines for

tenant signatures, the contract was signed by Shields and Lee, respectively. The

contract contained an “OPTION TO PURCHASE ADDENDUM” that included an

option for “Tenant” to purchase the property for the price of $325,000.00. Further,

to exercise that option the Tenant was required to pay a $10,000 deposit that would

be credited towards the total purchase price.

Under paragraph fourteen (14) of the Addendum, the contract

contained terms related to “EXCLUSIVITY OF OPTION[,]” providing that:

This Addendum is exclusive, non-transferrable and non- assignable. The powers contained in this Addendum shall exist exclusively for the Tenant and shall not be conveyed, transferred, or delegated to any such third (3rd) party. In the event of death of the Tenant, this Addendum shall be considered null and void with no rights for any heirs of the Tenant’s estate.

At the end of the addendum, there was another section for signatures. Again, this

was signed by Reuben Gentry as landlord, and two of the lines for tenant’s

signatures were signed by Chiquita Shields, who also specified on the line below

her signature that her name was “Tracy’s House RRC, Chiquita Shields,” and

Doyle Lee.

After the signatures at the end of the Addendum, there was a page

with several headers styled “Addendum” and “Lease Option Purchase” that

-3- covered remodeling or structural improvements, as well as mechanics liens. This

page was signed by Reuben Gentry as landlord. On two different locations with

blanks for ‘Tenant Name,’ this additional page was first signed by “Chiquita

Shields/Tracy’s House” and in the line directly underneath this entry is listed

“Chiquita Shields” again next to a space for “Tenant Name.” Further, Lee signed

the form in an area designated for “Tenant Name.”

The Dispute: First Lawsuit

Gentry contends that Tracy’s entered the contract/lease with the

intention to occupy the property and facilitate the rental of multiple units as a

sober-living halfway house for persons in recovery. Gentry further asserts that

Shields signed on behalf of Tracy’s, and not in her capacity as an individual. After

an initial disagreement, Lee and Shields filed a lawsuit on August 31, 2023 (further

amended on February 5, 2024), demanding the return of $12,200 ($10,000 in

earnest money and $2,200 in rent). In response, Gentry filed an Answer that

included counterclaims against Shields and Lee alleging unreasonable damage to

the property. Gentry also claims on appeal that rent has not been paid since the

filing of the first lawsuit and that possession was never returned to him.

The Mediation Agreement

On March 13, 2024, the three parties (Gentry, Shields, and Lee)

entered into a Mediation Agreement. The agreement set out terms in which the

-4- 3636 Bold Bidder Drive property would be purchased by Shields and Lee for

$315,000, with the cost of substantial and material repairs to the property deducted

from the purchase price paid to Gentry. Notably, while disputed rent payments

were not explicitly mentioned, paragraph (5) of the agreement provided a mutual

release for “all claims of any kind, known and unknown, which claims were raised

or could have been raised in the Civil Action and which arise out of issues raised in

the Civil Action.”4 Additionally, paragraph ten (10) of the Agreement provided,

“Upon execution of final settlement and mutual release documents and payment of

the Settlement Amount, counsel will enter an agreed order of dismissal, with

prejudice.” In an Order entered September 24, 2024, the Circuit Court granted the

Plaintiff’s motion to enforce the Agreement. In that Order, the Court found the

“Mediation Agreement attached as EXHIBIT A to Plaintiffs’ Motion to Enforce

Settlement Agreement [as] binding and enforceable between the parties.” Finally,

on April 18, 2025, by an Agreed Order in the Shields/Lee case, the court “resolved

all pending legal issues in this proceeding by final and appealable order dated April

8, 2025.” Counsel for both Gentry and Shields/Lee signed the order.

4 We observe that in Gentry’s initial answer to the first lawsuit which resulted in this Agreement, he made a claim for “Rent in Default from July 1, 2023, to May 31, 2026, for a total of 1065 days at $72.30 per day for a Total of $76,999.50.” Thus, the unpaid rent claim now raised again by Gentry in his second lawsuit was known by all parties prior to the March 2024 Mediation Agreement being finalized.

-5- Identity of the Parties

Gentry’s brief with our Court expressly concedes that Shields signed

the original purchase contract on behalf of Tracy’s. Gentry’s complaint in the

second action also implicitly recognizes that Shields (or, plausibly, Lee) signed the

Lease Option on behalf of Tracy’s. In paragraph four (4), the complaint asserts

that Tracy’s entered two contracts with Gentry dated May 17, 2023, for the

purposes of renting the property and having an Option to purchase the same

property. While he does not mention Shields or Lee by name, this paragraph

implies that Shields and/or Lee signed the Lease Option on behalf of Tracy’s.

Further Litigation

On November 9, 2024, Gentry filed a Motion to add Tracy’s as an

Indispensable Party on the theory that Tracy’s was a signatory on the contract, but

not a party to the Shields/Lee action against Gentry. The circuit court denied

Gentry’s Motion to add Tracy’s to the Shields/Lee action because it had been

settled but also noted that Gentry could file a separate action against Tracy’s.

Specifically, paragraph five (5) of that Order, entered December 23, 2024,5 stated

that, “Defendant may file separate litigation against third-parties referenced in

5 Gentry’s brief claimed the Order Denying was dated December 23, 2025, but a review of the record shows this is a typographical error, and the Order was actually entered on December 23, 2024.

-6- Defendant’s Motion to Add Indispensable Parties, and all rights available to all

parties are preserved.”

Tracy’s Motion to Dismiss the Second Lawsuit

After Gentry filed his Complaint against Tracy’s on January 15, 2025,

Tracy’s filed a Motion to Dismiss on February 17, 2025. Tracy’s main argument

for dismissal was that Gentry had previously settled – in the first suit against

Shields/Lee – the exact same claim he now asserted in the second suit. Tracy’s

specifically asserted that the claims in the second action were barred by claim

preclusion. After the mediation, the trial court in the original Shields/Lee action

found the resulting Mediation Agreement was enforceable in Orders entered

September 24, 2024, and December 23, 2024.

The Order Dismissing the 2nd Action Based on Claim Preclusion

Eventually, in the original Shields/Lee action, the Circuit Court

entered an Order on April 8, 2025, determining the factual amount of the offsets

from the Mediation Agreement and ordering a closing for the sale of the property.

The court then held a hearing on Tracy’s Motion to Dismiss the second action on

April 11, 2025. During the hearing, the Court ruled that the counterclaim for

unpaid rent was raised in the original Shields/Lee action that settled at mediation,

so it was not possible to raise in the second action against Tracy’s. Further, the

-7- Court ruled that since the Shields/Lee action was already settled, Tracy’s could not

be added to that suit, and thus any related claims for unpaid rent were waived.

The court did acknowledge on the record that “a mistake was made”

in its Order dated December 23, 2024, where it was noted that Gentry was allowed

to file a separate action against Tracy’s. The court apparently had not realized

the claim for rent arrears was made in Gentry’s initial Answer in the first suit.

Now, on appeal, Gentry asserts that the sole issue is whether the second lawsuit

against Tracy’s for unpaid rent was properly dismissed due to the settlement of the

original Shields/Lee action – despite Tracy’s not being a named party to the

original action.

STANDARD OF REVIEW

Where an appellee fails to file a brief, the Appellate Court may:

“(a) accept the appellant’s statement of the facts and issues as correct; (b) reverse the judgment if appellant’s brief reasonably appears to sustain such action; or (c) regard the appellee’s failure as a confession of error and reverse the judgment without considering the merits of the case.” Kentucky Rules of Appellate Procedure (“RAP”) 31(H)(3).

Commonwealth v. Blackford, 674 S.W.3d 465, 467 (Ky. App. 2023). We reach the

merits of this appeal through the exercise of RAP 31(H)(3)(a).

Motions to Dismiss

Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or

-8- third-party claim shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: . . . (f) failure to state a claim upon which relief can be granted . . . .

CR 12.02. The standard of review for a motion to dismiss provides:

“It is well settled in this jurisdiction when considering a motion to dismiss under [Kentucky Rules of Civil Procedure (CR) 12.02], that the pleadings should be liberally construed in a light most favorable to the plaintiff and all allegations taken in the complaint to be true.” “Since a motion to dismiss for failure to state a claim upon which relief may be granted is a pure question of law, a reviewing court owes no deference to a trial court’s determination; instead, an appellate court reviews the issue de novo.”

Littleton v. Plybon, 395 S.W.3d 505, 507 (Ky. App. 2012) (citations omitted).

“The court should not grant the motion [to dismiss] unless it appears the pleading

party would not be entitled to relief under any set of facts which could be proved in

support of his claim.” Netherwood v. Fifth Third Bank, Inc., 514 S.W.3d 558, 563

(Ky. App. 2017) (citation omitted).

ANALYSIS

Upon review of the hearing held in this action on April 11, 2025, we

are persuaded that the basis of the trial court’s Order of Dismissal was claim

preclusion, despite the Order’s lack of an express statement to that effect.

Consequently, we will not address the alternative dismissal arguments raised by

Tracy’s at the trial level, including the arguments based on contract interpretation

-9- and public policy related to violations issued by Fayette County Code Enforcement

authorities. Nor will we address collateral estoppel or issue preclusion arguments

made by Gentry, as those are inapplicable to the circuit court’s result. However,

since claim preclusion was argued by Tracy’s and considered by the trial court at

the April 11, 2025, hearing, we will reach the merits of that issue.

Res Judicata & Claim Preclusion

Res Judicata is a defense which bars:

repetitious suits involving the same cause of action. The doctrine of res judicata is formed by two subparts: 1) claim preclusion and 2) issue preclusion. Claim preclusion bars a party from re-litigating a previously adjudicated cause of action and entirely bars a new lawsuit on the same cause of action. . . . The key inquiry in deciding whether the lawsuits concern the same controversy is whether they both arise from the same transactional nucleus of facts. If the two suits concern the same controversy, then the previous suit is deemed to have adjudicated every matter which was or could have been brought in support of the cause of action.

Yeoman v. Commonwealth, Health Policy Bd., 983 S.W.2d 459, 464–65 (Ky.

1998) (citations omitted). Specifically, Tracy’s moved to dismiss the second

action based on claim preclusion. Three elements are necessary for claim

preclusion: (1) identity of parties, (2) identity of causes of action, and (3)

resolution of the action on the merits. Id. at 465.

We find persuasive the arguments Tracy’s raised to the trial court in

its Motion to Dismiss based on claim preclusion. First, the element requiring

-10- identity of the parties is analyzed using caselaw. Kentucky operates under the rule

that “only parties to the former action, and their privies” may plead claim

preclusion. Sedley v. City of West Buechel, 461 S.W.2d 556, 559 (Ky. 1970)

(citing Newman v. Newman, 451 S.W.2d 417 (Ky. 1970)). In other words, the

doctrine applies to named parties and those in privity with the parties of the

previous action. See Estate of Reeder v. Ashland Police Department, 588 S.W.3d

160, 164 (Ky. App. 2019). The notion that a person who was not a party to a suit

may still be bound by its judgment is not just an application of claim preclusion,

but:

is based upon privity between a party to the original suit and the person who should be bound by the judgment. This privity is in turn founded upon such an identity of interest that the party to the judgment represented the same legal right. The rule is essentially one of justice and fairness . . . . State Farm Mut. Auto. Ins. Co. v. Shelton, 368 S.W.2d 734, 737 (Ky. 1963).

Harris v. Jackson, 192 S.W.3d 297, 303 (Ky. 2006), as modified (May 24, 2006).

Further, “[w]hile the concept of privity defies a precise, inflexible

definition, a key consideration for its existence is the sharing of the same legal

right by the parties allegedly in privity.” BTC Leasing, Inc. v. Martin, 685 S.W.2d

191, 198 (Ky. App. 1984). “This is to ensure that the interests of the party against

whom res judicata has been asserted have been adequately represented by his

purported privy at the initial trial of the cause of action.” Id. Defined more

-11- recently by our court, “[p]rivity [within the meaning of res judicata] means a

successor in interest to the party, one who controlled the earlier action, or one

whose interests were adequately represented.” Cadle Company v. Gasbusters

Production I Limited Partnership, 509 S.W.3d 713, 719 (Ky. App. 2016) (internal

quotation marks omitted).6

Here, the record reflects that Shields served as a corporate officer

(president) for Tracy’s. Moreover, by Shield’s action in signing the contract as

“Tracy’s House RRC, Chiquita Shields,” she was at least representing herself to be

an agent of Tracy’s. Persuasive precedent in analogous situations has found privity

for the purposes of res judicata. See Wright v. Heller, 102 N.E.3d 1285, 1292

(Ohio Ct. App. 2018) (“[I]t is well-settled law that a principal-agent relationship

satisfies the privity requirement of res judicata where the claims alleged are within

the scope of the agency relationship. ABS Industries, Inc. v. Fifth Third Bank, 333

Fed. App’x 994, 999 (6th Cir. 2009)”); Fogelson v. Wallace, 406 P.3d 1012, 1021

(N.M. Ct. App. 2017) (“Although a parent-subsidiary relationship does not of itself

establish privity, the Restatement (Second) of Judgments recognizes that claim

preclusion is appropriate if members of an ownership group directly control a

corporate entity.” (citations omitted)). Thus, based on the totality of

6 In Cadle, our Court recognized that two “legally separate corporations” stood in privity with one another because they were both creditors in the same bankruptcy action, thereby satisfying the “identity of parties” element of claim preclusion. Id.

-12- circumstances, there is sufficient identity between Tracy’s and Shields/Lee with

respect to interests in the Lease Option contract that they are in privity for purposes

of res judicata.

On the second element, we conclude that the initial action and the

current lawsuit involve the same controversy (i.e., the litigation of Gentry’s claims

related to the Lease Option and the Property). We agree with Tracy’s arguments to

the circuit court that the “[r]esolution of the [Shields/Lee] Civil Action (by

settlement) implicated all actions brought and that could have been brought under

the [Shields/Lee] Civil Action, including the causes of action advanced by

Gentry.”

Finally, we are also persuaded that the Shields/Lee action was

resolved on the merits, thereby establishing the third claim preclusion element. As

noted above, the initial lawsuit was resolved by the Mediation Agreement and the

trial court’s Order,7 entered April 8, 2025, which made findings related to

“substantial and material” repairs contemplated by the Agreement after a bench

trial for that issue on February 25, 2025. A settlement agreement dismissing a case

with prejudice is sufficient to apply claim preclusion. See 3D Enterprises

Contracting Corp. v. Louisville and Jefferson Cnty. Metropolitan Sewer Dist., 174

7 The trial court held a bench trial on February 25, 2025, related to fact findings for the amount of offsets from the purchase price related to “substantial and material repairs” contemplated in paragraph three (3) of the Mediation Agreement, but issued its related Order on April 8, 2025.

-13- S.W.3d 440, 448 (Ky. 2005) (settling a case rather than trying it does not

subsequently abrogate the claim preclusion doctrine). Paragraph five (5) of the

Mediation Agreement mutually released all claims of any kind, known and

unknown, and paragraph ten (10) expressly found that the mutual dismissal would

be with prejudice. Thus, viewed as a whole, the record establishes that the

Shields/Lee action was dismissed with prejudice, thereby satisfying the

“adjudication on the merits” element of claim preclusion.

CONCLUSION

Having reviewed the record in this case, and finding no error, we

Affirm the trial court’s Order of Dismissal.

ALL CONCUR.

BRIEF FOR APPELLANT: NO BRIEF FOR APPELLEE.

Kevin Palley Lexington, Kentucky

-14-