Limbright et al v. Hofmeister et al

Filing 246

OPINION AND ORDER: Plaintiffs' 227 response regarding calculation of amounts due under the Kentucky Judgment, treated as a motion to clarify, and Plaintiffs' additional 233 motion to alter or amend judgment are GRANTED. Signed by Judge Karl S. Forester on March 14, 2012. (AWD) cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON

CIVIL ACTION NO. 5:09-cv-107-KSF
JAMES H. LIMBRIGHT, et al.

vs.

PLAINTIFFS

OPINION AND ORDER

GEORGE HOFMEISTER, et al.

DEFENDANTS

This matter is before the Court on Plaintiff’s Response regarding calculation of the amount
due under the Kentucky Judgment, which the Court is treating as a motion to clarify its November
14, 2011 judgment, and Plaintiffs’ additional motion to alter or amend judgment. For the reasons
discussed below, the motions will be granted.
I.

BACKGROUND
The underlying facts of this case were set forth in earlier decisions and will not be repeated

here. Limbright v. Hofmeister, 688 F. Supp.2d 679 (E.D. Ky. 2010); Limbright v. Hofmeister, 2011
WL 5523713 (E.D. Ky. Nov. 14, 2011); Limbright v. Hofmeister, 2012 WL 664461 (E.D. Ky. Feb.
28, 2012). On November 14, 2011, this Court entered judgment against the Defendants “in the
sum equal to the balance due and owing to the Plaintiffs on their Kentucky Judgment, plus all
accrued interest at the legal rate.” [DE 223]. Plaintiffs’ counsel reported that on November 15, they
were meeting with their clients when Henry Limbright mentioned for the first time that he recalled
this Court considering a request for attorney fees after the March 29, 2002 Judgment, but he could
not remember the outcome. [DE 227, p. 6, n. 2]. Later that day, Plaintiffs’ counsel obtained from
the Clerk of this Court a copy of the May 24, 2002 judgment, which awarded $141,422.31 in
interest, attorney fees and costs. Plaintiffs claim the Defendants’ counsel were advised that
evening of the additional amount and Plaintiffs’ expectation of payment. Id. With interest, the total
had increased by then to approximately $190,000. On November 16, 2011, Defendants wired

$1,209,418.20 to Plaintiffs’ counsel, based upon Plaintiffs’ previous calculations for the March 29,
2002 Judgment and accrued interest, but excluding the subsequent award. [DE 228, p. 2; DE152,
p. 9].
Plaintiffs’ counsel are now asking the Court to clarify that the additional amount for unpaid
interest, fees, and costs was part of the Kentucky Judgment and should be included in any
calculations regarding the amount due. Defendants responded basically that it is too late now for
Plaintiffs to seek amendment of their complaint and compensation for the additional amount when
it was not included in any pleadings before now.
II.

ANALYSIS
Defendants argue that, throughout the many years of litigation in this and related cases,

Plaintiffs have relied only upon the March 29, 2002 judgment for $1,200,000. [DE 228, pp. 2-3].
They protest vigorously that the May 24, 2002 judgment was never mentioned. Accordingly,
Defendants argue Plaintiffs should be limited to the March 29, 2002 judgment that was registered
in Michigan and referenced in their various complaints. Defendants contend that Plaintiffs’
calculation of the amount due in an August 10, 2011 pleading in federal court in Michigan is a
“judicial admission” that cannot be recanted. Defendants also rely on laches and equitable
estoppel to preclude recovery of more than the March 29,2002 Judgment plus interest.
Plaintiffs do not dispute that the May 24, 2002 judgment was not specifically mentioned
during the litigation against the Defendants. Plaintiffs’ present counsel acknowledge they were
not previously aware of it. Plaintiffs note, however, that all references to the March 29, 2002
Judgment in the Complaint are specifically to the “principal amount” of the judgment. [Complaint,
DE 1, ¶¶ 9, 15]. The Complaint also clearly seeks “interest, costs, together with reasonable
attorneys fees.” Id. at ¶ 15. Plaintiffs argue further that the interest, cost and attorneys fees were
unquestionably granted by this Court, the Hofmeisters were aware of it, and the Hofmeisters will
not be prejudiced by being required to pay an amount that they previously admitted owing.

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Plaintiffs also argue that courts have equitable power to disregard defects in pleadings when they
do not affect the substantial rights of the parties.
Defendants’ assertion of a judicial admission is not well taken. MacDonald v. GMC, 110
F.3D 337, 340 (6th Cir. 1997), on which they rely says:
Because of their binding consequences, judicial admissions generally arise only
from deliberate voluntary waivers that expressly concede ... an alleged fact....
[C]onsiderations of fairness and the policy of encouraging judicial admissions
require that trial judges be given broad discretion to relieve parties from the
consequences of judicial admissions in appropriate cases.
Id., quoting United States v. Belcufine, 527 F.2d 941, 944(1st. Cir. 1975). The statement of
counsel in the Michigan pleading was in response to Defendants’ calculations, which did not
compound interest properly and excluded several months of interest. The focus was on correcting
those errors, rather than deliberately conceding an alleged fact. It is the opinion of this Court that
counsels’ remarks were not “deliberate voluntary waivers” of an award to which Plaintiffs were
entitled. See also Commercial Money Center, Inc. v. Illinois Union Ins. Co., 508 F.3d 327, 336 (6th
Cir. 2007) (Judicial admissions of fact must be deliberate and clear, while legal conclusions are
rarely considered to be binding judicial admissions.”).
The Court is also not persuaded that there was any defect in the pleadings. The March 29,
2002 Opinion and Order granting judgment states on page 14:
In addition, the Guaranties require the Hofmeisters “to pay the reasonable costs and
out-of-pocket expenses of [the Limbrights] including, without limitation, reasonable
attorneys’ fees, in connection with the collection of the amounts owing under [these
Guaranties].”
On page 24, the Opinion and Order states in its Conclusion:
Pursuant to the obligations expressly assumed by the Hofmeisters in their
Guaranties, the Court will award the Limbrights the principal amounts of the
Promissory Notes, plus interest accrued, reasonable costs and out-of-pocket
expenses, and reasonable attorney fees incurred through collection on the
Hofmeisters’ Guaranties.
[DE 229-2]. The March 29, 2002 Judgment, entered pursuant to that Opinion and Order, states
in part:
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(1)

judgment is entered in favor of James H. Limbright in the principal amount of
$900,000, plus interest calculated pursuant to the amended Promissory Note, costs
and reasonable attorney fees as against defendants George and Kay Hofmeister,
jointly and severally;

(2)

judgment is entered in favor of Henry Limbright in the principal amount of $300,000,
plus interest calculated pursuant to the amended Promissory Note, costs and
reasonable attorney fees as against defendants George and Kay Hofmeister, jointly
and severally;

(3)

the Court SHALL RETAIN jurisdiction of this matter for the sole purpose of
entertaining plaintiffs’ petition for fees and costs;

[DE 227-2, emphasis added].

The Hofmeisters subsequently stipulated to “the amount of

reasonable attorney fees, interest and costs to be awarded in this case” and agreed that “[t]his
court shall retain jurisdiction of this matter for the sole purpose of entertaining Plaintiffs’ Petition
for Subsequent or Additional Attorney Fees, Costs and Interest.” [DE 229-3, p. 2]. The subsequent
complaints demanding the principal amount of the judgment plus interest, costs and attorney fees
were sufficient to put Defendants on notice attorney fees, costs and interest had not been
abandoned. No amendment of the pleadings is necessary.
Defendants’ theory of equitable estoppel is without merit. As Defendants admit, an element
of that theory is a representation or concealment of material facts that “are unknown to the other
party.” [DE 228, p. 7]. All facts associated with the award of interest, costs and attorney fees were
known to the Hofmeisters. Equitable estoppel does not apply under the facts.
Defendants’ reliance on election of remedies and waiver is also misplaced. Defendants’
cited authority on election of remedies defines it as “two modes of redress, which are contradictory
and inconsistent with each other.” [DE 228, p. 8]. There is nothing “contradictory and inconsistent”
about Plaintiffs’ Complaint and its motion for summary judgment which demand the principal
amount of a judgment along with interest, costs and fees.
Defendants’ theory of waiver is also flawed. There is no evidence that Plaintiffs intentionally
relinquished a known right. The only conduct “inconsistent with the assertion of that right” was the
mistake of overlooking a prior award of interest and fees when calculating the amount due. After
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suffering nine years of delays while chasing Hofmeister assets and trying to collect their judgment,
it is not surprising that Plaintiffs overlooked something.
Defendants also invoke the doctrine of laches, “an unreasonable delay in asserting a right.”
[DE 228, p. 5]. That assumes Plaintiffs did not assert their right to interest, costs and fees earlier
in the case. As discussed above, these rights were asserted in the various complaints and in the
motion for summary judgment. Moreover, the Court has discretion whether to apply the doctrine,
as Defendants admit. Id. Even if the right had been neglected, this Court finds that no injustice
to Defendants will result from its enforcement. The greater injustice would be to allow Defendants
to escape an obligation that they voluntarily assumed when they signed guaranties of payment to
the Limbrights.
Finally, the inclusion of the March 29, 2002 Judgment in Plaintiffs’ Exhibit List does not
weigh in favor of a different result. A jury would not be determining interest, costs or attorney fees.
That is a legal question to be decided by the Court.
III.

CONCLUSION
IT IS ORDERED that Plaintiffs’ response regarding calculation of amounts due under the

Kentucky Judgment [DE 227], treated as a motion to clarify, and Plaintiffs’ additional motion to alter
or amend judgment [DE 233] are GRANTED.
This March 14, 2012.

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