Kentucky Forward LLC v. Short et al
MEMORANDUM OPINION AND ORDER: Defendants' 67 Motion to Vacate Judgments and for New Trial, and Alternative Motion to Alter or Amend Judgments or Make Amended or Additional Findings, be, and the same hereby is, DENIED. Signed by Judge Joseph M. Hood on 1/17/2017. (STC)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
KENTUCKY FORWARD LLC,
) Action No. 5:15-CV-6-JMH
) MEMORANDUM OPINION AND ORDER
PAIGE SHUMATE SHORT, et al.,
This matter is before the Court on Defendants’ Motion to
Vacate Judgments and for New Trial, and Alternative Motion to Alter
or Amend Judgments or Make Amended or Additional Findings [DE 67].
Plaintiff responded and Defendants replied, and this matter is
ripe for review.
services rendered by Plaintiff to Defendants.
The principals at
directly with Defendant Short, a principal at Four Tigers, LLC, to
develop creative images, packaging, and a marketing plan for Four
Tigers’ two new blackberry chewing gum products.
facts are set forth with additional specificity in the Court’s
Order of July 8, 2016 [DE 56] and incorporated herein. In summary,
Defendants never paid Plaintiff for its services and this lawsuit
The case file shows the extent to which Defendants did not
fully cooperate or participate in this lawsuit and the many
opportunities Defendants had to raise the issues stated in their
Initially, Four Tigers and Short were represented by
counsel, who filed an Answer on behalf of both defendants and a
Counterclaim dismissed at DE 33].
Counsel for defendants also
filed a Response to Plaintiff’s Partial Motion for Summary Judgment
on the Counterclaim [DE 23 and 25] before withdrawing as counsel
Defendants until October 16, 2015 to obtain new counsel; however,
both defendants failed to do so.
In the Court’s order dated October 22, 2015 [DE 33], the Court
extended the time for defendants to obtain counsel until November
In that Order the Court warned Four Tigers that while
Short could represent herself pro se in this matter, Four Tigers
is a business association and could not proceed without counsel,
and if it did not obtain counsel the Court would direct the Clerk
to enter default judgment against it.
On November 9, 2015, Four
Tigers had failed to obtain counsel and default judgment was
entered against it.
Short continued in this matter pro se,
although she did not participate in this litigation again until
the filing of the instant motion.
The Court granted Plaintiff’s motions for discovery [DE 36,
entered November 13, 2015] and to compel answers to Interrogatories
and Requests for Production of Documents [DE 38, entered November
17, 2015](which were originally served in July 2015), and gave
Short until December 1, 2015, to comply.
As noted, Short ignored
these Orders and failed to respond to Plaintiff’s February 10,
2016 Motion for Default Judgment [DE 41] and May 12, 2016 Motion
for Entry of Default [DE 44].
As a result of these blatant and
repeated failures, the Court directed the Clerk to enter default
against Defendant Short and set a damages hearing for July 5, 2016,
to determine what damages, if any, were appropriate to be entered
against either or both defendants.
Prior to the damages hearing, the Court received a letter
from Defendant Short’s husband, Dan Short, which prompted the Court
to issue a subpoena for his appearance at the July 5, 2016 hearing.
Defendant Short did not appear at the damages hearing, nor did a
representative appear on her behalf or on behalf of Four Tigers.
Mr. Short appeared and spoke to the Court regarding Defendant
Short’s mental state.
Mr. Short told the Court Defendant Short is
suffering from a mental defect or incapacity from a gunshot to the
hand in 2009.1
Mr. Short is not an attorney or Defendant Short’s
legal representative, therefore he could not legally represent her
interests in Court.
Mr. Short is also not a party to this lawsuit
and had no standing to request the Court take any action.
Court held the damages hearing and ultimately entered a judgment
[DE 56 and 63].
Defendants now argue the Court made the following errors of
law in granting default judgment in favor of Plaintiff:
meruit claim in an amount far less than the sum the Court
Defendants had an implied license to use the packaging
There is no basis for holding Defendant Short liable for
Four Tigers’ debt;
There is no legal or factual basis for the imposition of
attorney’s fees and costs.
In the Court’s Order of July 8, 2016 [DE 56], the Court erroneously stated
this was a gunshot to the head. Upon review of the record, it is clear
Defendant Short suffered an accidental gunshot wound to her hand. This is a
critical distinction, as it is obvious that a gunshot to the hand is far less
likely (though the Court does not exclude the possibility) to cause a mental
functioning issue than a gunshot wound to the head.
Defendants further argue that their failures in this case did
not justify default judgment because they were not “willful,” and
that Defendant Short is not “culpable” in her failures on her own
behalf and as a principal of Four Tigers because of “excusable
[DE 67-1, pp. 9-16].
Standards of Review
a. Rule 60(b)(1) and (6)
Under Federal Rule of Civil Procedure 60(b), a district
court may relieve a party from a final judgment or order for:
(1) mistake, inadvertence, surprise, or excusable
neglect; (2) newly discovered evidence which by due
diligence could not have been discovered in time to move
for a new trial under Rule 59(b); (3) fraud (whether
misrepresentation, or other misconduct of an adverse
party; (4) the judgment is void; (5) the judgment has
been satisfied, released, or discharged, or a prior
judgment upon which it is based has been reversed or
otherwise vacated, or it is no longer equitable that the
judgment should have prospective application; or (6) any
other reason justifying relief from the operation of the
Fed. R. Civ. P. 60(b).
A Rule 60(b) motion may only be granted for one of the
Johnson v. Unknown Dellatifa, 357 F.3d 536,
543 (6th Cir. 2004); Feathers v. Chevron U.S.A., Inc., 141 F.3d
264, 268 (6th Cir. 1998).
Though courts have considerable
discretion in granting relief from judgment pursuant to Rule 60(b),
a court’s power is limited by public policy favoring the finality
of judgments, and relief under Rule 60(b)(6) is available only in
“unusual and extreme situations where principles of equity mandate
Blue Diamond Coal Co. v. Trs. of the UMWA Combined
Benefit Fund, 249 F.3d 519, 524 (6th Cir. 2001).
b. Rule 59(e)
Federal Rule of Civil Procedure 59(e) provides that a judgment
can be set aside or amended for one of four reasons: (1) to correct
a clear error of law; (2) to account for newly discovered evidence;
(3) to accommodate an intervening change in the controlling law;
or (4) to otherwise prevent manifest injustice.
See also, ACLU of
Ky. v. McCreary Cty., Ky., 607 F.3d 439, 450 (6th Cir. 2010); Gen
Corp, Inc., v. Am. Int’l. Underwriters, 178 F.3d 804, 834 (6th
Cir. 1999); Intera Corp. v. Henderson, 428 F.3d 605, 620 (6th Cir.
The grant or denial of a Rule 59(e) motion “is within the
informed discretion of the district court.”
GenCorp., Inc. v. Am.
Int’l Underwriters, 178 F.3d 804, 832 (6th Cir. 1999); see also
Leisure Caviar v. U.S. Fish and Wildlife Serv., 616 F.3d
considerable discretion in deciding whether to grant [a Rule 59(e)]
c. Rule 59(a)
“Federal Civil Rule 59(a)(1)(B) allows a party to move for a
new trial following a bench trial ‘for any reason for which a
rehearing has heretofore been granted in a suit in equity in
federal court.’” Under Rule 59(a)(2), “the decision to grant a new
trial lies within the sound discretion of the trial court.”
Orthofix, Inc. v. Hunter, 2015 WL 474319, at *2 (N.D. Ohio Feb. 4,
2015)(quoting EEOC v. JMS USA, LLC, 2014 WL 298625, at *4 (D. Neb.
d. Rule 52(b)
Federal Rule of Civil Procedure 52(b) often accompanies a
Rule 59 motion, allowing a court to “amend its findings—or make
additional findings—and  amend the judgment accordingly” upon
the motion of a party made within 28 days of the entry of the
The Court finds that Defendants’ arguments as to any
amendments they believe should be made to the factual findings of
the Court are wholly without merit, as discussed below.
At the outset, the Court notes Defendants admit Paige Short
accurately, lack thereof) in this lawsuit.
[DE 67-1, pg. 9 and DE
70, pg. 1].
Defendant Short’s 2009 gunshot wound to the hand is, in large
part, the basis for the motion before the Court.
explain that the gunshot injury resulted in numerous surgeries,
Mr. Short and Defendant Short’s mother, Kay Shumate,
provided affidavits stating that, in their opinion, Defendant
Short was “addicted” to prescription pain medication from March
2009 until February 2015.
[DE 67-3 and DE 67-4].
these affidavits, it appears Defendant Short’s most recent hand
surgery was in September 2014, which required physical therapy
through January 2015 (incidentally, the month this lawsuit was
Mr. Short and Ms. Shumate opine that based on their
observations of Defendant Short, “from at least August 2014 through
the present, Paige has not been mentally or physically healthy.”
[DE 67-3, ¶8 and DE 67-4, ¶8].
Neither Mr. Short nor Ms. Shumate
are physicians or mental health experts.
Accordingly, while they
may testify to their observations, they may not diagnose Defendant
Short with addiction, mental disorder, depression, or any other
condition which they believe she suffered.
This is opinion
testimony based on “scientific, technical, or other specialized
knowledge within the scope of Rule 702” by a lay witness and is
specifically disallowed in the evidentiary rules.
Fed. R. Evid.
Declaration of William J. Short, M.D., the brother-in-law of
Dr. Short is a family practitioner in Ashland,
Dr. Short declares he has “consulted” with Defendant
Short at some unspecified time, “observed” her, and is “personally
aware of” Defendant Short’s health circumstances, and has formed
the opinion that “she is suffering from a cognitive disorder which
has worsened from March 2009 to the present date.”
Dr. Short does not claim to have examined Defendant Short, her
In fact, Defendants have not submitted any medical records or
testimony from her treating physicians that support their claims
that Defendant Short has a mental defect that would have prevented
her from participating in this lawsuit.
It is the trial judge’s
responsibility to “ensure that any and all scientific testimony or
evidence admitted is not only relevant, but reliable.”
Merrell Dow Pharm., Inc., 509 U.S. 579, 589 (1993).
Generally a treating physician can provide
illness, the appropriate diagnosis, and the
cause of the illness even if the physician is
not among the world's foremost authorities on
the matters. However, a treating physician's
testimony is still subject to the requirements
in Daubert. Before permitting a physician to
testify, the district court must be persuaded
scientifically valid; and (2) he or she has
properly applied that reasoning or methodology
to the facts at issue to aid the trier of fact.
Thomas v. Novartis Pharm. Corp., 443 F. App'x 58, 61 (6th Cir.
Dr. Short does not purport to be Defendant Short’s treating
physician, but merely an extended family member who has “consulted”
Dr. Short’s “reasoning or methodology underlying” his
opinions as to Defendant Short’s “cognitive disorder” were to
“consult with” Defendant Short in a “professional capacity” and
“observe” Defendant Short (though he does not specify this was
in a “professional capacity” such as during an exam) and be
“personally aware of” Defendant Short.
Dr. Short admits there has
been no diagnosis of any “cognitive disorder” impairing Defendant
Short (other his “opinion that she is suffering from a cognitive
Dr. Short does not claim to have examined, diagnosed,
or treated Defendant Short for any ailment whatsoever.
that the “reasoning or methodology underlying” his opinion of
Defendant Short’s cognitive functioning is his general knowledge
of her as a brother-in-law, which has included, at unspecified
times, discussing her health.
It is possible that Dr. Short, being a (family practice)
doctor may have discussed Defendant Short’s health with her in a
manner that was more medically specific or clinical than Defendant
Short would have discussed with a family member who is not a
doctor. However, Dr. Short does not claim to have reviewed her
He does not state he conferred with her treating
He does not state she was his patient at any time.
Short’s vague statement that he “consulted with Paige Short in a
professional capacity concerning her health” is insufficient to
meet the requirements of Daubert to support his very specific
“opinion that she is suffering from a cognitive disorder which has
worsened from March 2009 to the present date.”
[Aff. Of William
Short, DE 67-5, pp. 2-3]. Thomas at 61. Thus, pursuant to Daubert
admissible expert testimony on the subject of Defendant Short’s
mental capacity or ability.
abilities as an issue in this matter.
According to the dubious
affidavits from Defendant Short’s spouse and mother, her mental
“dysfunction” has been ongoing “from at least August 2014 through
[See Aff. of Dan Short, DE 67-3, pg. 2].
above, her brother-in-law stated her “cognitive disorder” started
in March 2009.
This mental dysfunction or cognitive disorder has
been so severe, according to Defendants, as to prevent Defendant
Short from participating in this lawsuit on her own behalf or
retaining counsel for her LLC.
Inexplicably, however, Defendant
Short was sufficiently mentally functional to retain counsel in
May 2015 to defend this lawsuit on her personal behalf and on
behalf of Four Tigers.
At no time during this representation,
from May 2015 through September 2015, did her counsel raise the
issue that Defendant Short was not mentally or physically capable
of participating in the lawsuit.
Moreover, Defendant Short was
capable of retaining counsel in August 2016 to represent her
individually and Four Tigers in the filing of the instant motion.2
Defendants claim that Plaintiff inaccurately assumes “Ms. Short arranged for
the employment of counsel to file the pending motion.” [DE 70 p. 4]. Yet,
Defendants do not provide any alternative explanation for counsel’s appearance
The Court is wholly unconvinced that Defendants are entitled
to any relief.
Defendants have not presented any credible,
admissible evidence of “excusable neglect” or “any other reason
justifying relief from the operation of the judgment.” Fed. R. Civ.
Based on the record, it appears Defendant Short was mentally
competent during the activities which gave rise to this lawsuit,
post-gunshot wound to the hand, from around May 2012 through at
least August 2013; it appears she was also mentally competent and
assisted in the defense of this lawsuit and filing of a counterclaim
with her retained counsel from May 2015 through September 2015 (and
perhaps even earlier, as the record suggests Defendant Short may
have been purposefully avoiding service of process from January
through April 2015).
It further appears Defendant Short has been
mentally competent and assisting her second retained counsel from
mid-August 2016 through the present, as the Court has not received
Short’s interests at this time.
The above list represents only Defendant Short’s activities
in the record in this lawsuit. Plaintiff produced several exhibits
in response to the instant motion which very strongly suggest
Defendant Short has not been suffering from a mental incapacity or
in this case. Although Dan Short represented to the Court at the July 5, 2016
hearing that he intended to obtain “guardianship” over Defendant Short, it
appears this did not occur. The Court can only speculate as to why.
cognitive defect during the pendency of this lawsuit.
Defendant Short posted a photograph of herself on Facebook driving
a boat with young children onboard just two weeks prior to missing
the damages hearing.
This is despite the fact her
husband and mother provided sworn testimony to this Court that
Defendant Short is not mentally well enough to operate a car with
her grandchildren in the vehicle.
[DE 67-3 ¶8; DE 67-4 ¶8].
Plaintiff provided exhibits showing Defendant Short’s involvement
with Women Leading Kentucky and that in 2015 she was on the “short
list” along with a lawyer, banker, and mayor to fill a vacant state
In sum, the facts in the record do not support Defendants’
arguments that Defendant Short
suffered from a mental health
problem which prevented her—intermittently—from participating in
If Defendant Short has indeed been “dysfunctional”
and “even at her best has not functioned normally” from August 2014
through the present, has lost math skills and the ability at times
to “recognize people she’s known for years,” as her family claims
[DE 67-3 and 67-4], it seems to the Court highly improbable that
such a long-term, severe, and pervasive cognitive issue would be
brought to the Court’s attention only after judgment was entered
against Defendant Short.
This seems even more improbable in light
of the fact Defendant Short was represented by counsel for a number
of months with no mention of such a serious mental impairment.
Accordingly, the Court will deny each of Defendants’ requests for
relief, as explained below.
a. Excusable Neglect and Other Reasons Justifying
The parties agree that in determining whether a litigant’s
conduct suggests Rule 60(b) relief is appropriate, courts must
examine three factors:
(1) whether the party seeking relief is
culpable; (2) whether the party opposing relief will be prejudiced;
and (3) whether the party seeking relief has a meritorious claim
See Lacer v. Pickard, 2012 U.S. Dist. LEXIS 156588 *3
The Court has found the evidence of Defendant Short’s
cognitive problems is wholly not credible, in part inadmissible,
and directly in opposition to Defendant Short’s past actions in
The Court has not changed its conclusion that
Defendant Short’s inaction in this lawsuit is the result of “a
willful refusal to participate in this lawsuit and intentional
failure to comply with the Court’s orders.”
[DE 45, p. 3].
Defendant Short, individually and as the corporate representative
of Four Tigers, is culpable for the inaction which gave rise to
the default judgments against both defendants.
As to the second factor, the Court finds Plaintiff will be
greatly prejudiced if the Court grants Defendants’ Rule 60 motion;
Plaintiff has already had to expend time and money to litigate
Plaintiff had to move to compel answers to discovery and hire
experts to testify at the damages hearing.
This work—and the
simply because Defendants chose not to participate the first time.
The Court is unwilling to so punish Plaintiff merely because
Defendant Short has now recognized the gravity of her prior poor
Defendants had an opportunity to present any claims or defenses
Defendants did file an Answer with defenses and Defendant Short
also filed counterclaim (which the Court dismissed for lack of
Defendants could have pursued the defenses in the
Answer, but in choosing not to, ultimately the Answer was stricken
from the record for Defendants’ failure to comply with the Court’s
orders in this case.
There is nothing in Defendants’ instant
motion to suggest any new claims or defenses arose since entry of
Accordingly, the Court finds there was no “excusable neglect”
which justifies granting relief from the judgment pursuant to Rule
60(b)(1) in this case.
The Court further holds that Rule 60(b)(6)
relief is appropriate in “only in exceptional or extraordinary
circumstances which are not addressed by the first five numbered
clauses of the Rule[,]” and, as no such extraordinary circumstances
exist in this case, the Defendants’ motion for Rule 60(b)(6) relief
will be denied.
Olle v. Henry & Wright Corp., 910 F.2d 357, 365
(6th Cir. 1990)
b. There were no clear errors of law
Defendants argue the Court made several clear errors of law
which require amended or additional findings pursuant to Rule 52
or an altered or amended judgment pursuant to Rule 59(e), or a new
trial pursuant to Rule 59(a).
The Court holds Defendants have not
presented any facts, evidence, or rules of law to justify such
i. Quantum Meruit claim
Defendants argue the Court’s award of $168,000 in quantum
meruit damages was a clear error of law because the plaintiff
admits in its Complaint that there was a contract between the
parties and entered into evidence an invoice for its services for
only $51,250, far less than the value of the services it claimed
at the damages hearing.
Defendants state that the Court should
not have found there was no contract between the parties—thus
opening the door for a quantum meruit claim—when the plaintiff
existence of a contract, in Defendants’ view).
The Court notes,
however, that Plaintiff also pled quantum meruit in its Complaint,
and that it is not uncommon for a party to plead related counts in
the Complaint out of abundance of caution.
Plaintiff nor Defendants have produced a contract between the
The Court remains of the opinion that there was no
meeting of the minds with respect to formulating a contract in
this case, but that the circumstances justify an award pursuant to
Defendants attack the amount of the quantum meruit damages,
claiming that the invoice entered into evidence by Plaintiff is a
The invoice for $51,250 and accompanying cover letter
make it clear that Plaintiff was hoping to recoup some fees from
Defendants (“The real cost of [these services] would be ten times
what we are charging . . .” [DE 1, Ex. F]); in fact, the letter
can be reasonably viewed as an offer to settle or resolve the
matter without litigation, not as an admission of a damages cap.
Defendants claim the award for copyright infringement was a
clear legal error because they had an implied license to use the
artwork on the BerryCare Toothpaste Gum and BerryCare Quick Energy
The accused copyright infringer bears the burden of proving
that there was an implied license.
Bourne v. Walt Disney Co., 68
F.3d 621, 630-31 (2nd Cir. 1995); Cf. Melea Ltd. v. Quality Models
infringer bears the burden of proving that the patent owner granted
an implied license to the accused infringer.”).
Defendants offer a few facts in their motion purportedly
proving that an implied license existed and that Plaintiff did not
ask Defendants to cease using the copyrighted material. Defendants
could have come forth with evidence that there was an implied
license at any point during the pendency of this litigation;
however, Defendants specifically chose not to do so.
As the Court
noted above, there is no excuse for Defendants’ actions in this
Defendant now seek a “second bite at the apple” to present
evidence which was previously available to them.
not argued, and the Court sees no evidence of, any newly discovered
evidence since the imposition of the judgment which would justify
reconsideration or amendment of the judgment.
For this reason,
Court will not consider any evidence that might be presented in
the instant motion on the issue of an implied license.
Defendants wished to present evidence on the defense of an implied
license, they should have done so prior to the judgment.
no evidence in the record to support Defendants’ claim an implied
license existed; thus, the Court will not alter or amend its
judgment or make additional findings.
iii. Joint and several liability
The Court previously addressed its justification for imposing
joint and several liability against Four Tigers and Paige Short on
the quantum meruit claim:
Defendant Short is a member of Four Tigers,
Plaintiffs allege Defendant Short
requested work on her behalf and on the behalf
of Four Tigers, LLC.
evidence at the hearing that in addition to
the work on the chewing gum products,
Defendant Short requested Plaintiffs create
materials for the Shumate Family Foundation.
The Court concludes both Defendants benefitted
from the services Plaintiff provided.
. . .
The uncontroverted evidence in the record
reflects that Defendant Short requested, on
behalf of herself and Four Tigers, LLC,
various marketing and advertising services to
be performed by Plaintiff, that those services
were actually rendered and both Defendants
benefitted, and Plaintiff reasonably expected
to be paid for those services, but neither
Defendant paid Plaintiff for the services.
[DE 56, p.3, n. 1 and p. 4].
provided on this subject at the July 5, 2016 damages hearing, which
supports a finding of joint and several liability.
If Defendants had appeared at the hearing, they could have
appeared at the hearing.
The Court agrees with Plaintiff’s
Response to Defendants’ motion on this point:
[DE 67-1, p.
First, the marketing plan developed by
Plaintiff in May, 2012 was directed to “Paige
Shumate Short, The Real Blackberry Person.”
(Trial Ex. 21). Four Tigers is not mentioned
whatsoever. Second, the marketing budget
memorandum sent by Plaintiff was directed to
Paige Short, not Four Tigers. (Trial Ex. 26).
That memo included work for both the Real
Blackberry People and Four Tigers. Again, the
common denominator in each marketing plan is
Ms. Short in her individual capacity.
Third, Plaintiff did marketing work for the
Real Blackberry People. (Trial Ex. 16 and 17).
Fourth, Plaintiff did graphic design work for
the Shumate Family Foundation (Trial Ex. 15).
If Plaintiff was working solely for Four
Tigers, why would Plaintiff do work for Ms.
Short’s personal family foundation? The answer
is simple: Plaintiff was working for Ms.
Short. It was Ms. Short who made all the
decisions and it was Ms. Short who determined
the scope of work. As such, Ms. Short is
personally liable and cannot escape liability
by pointing her finger at Four Tigers.
[DE 69, p. 18-19].
Attorney’s fees and costs
should not have prevailed on the copyright claim, Plaintiff should
not be awarded costs and fees pursuant the copyright statute, 17
U.S.C. § 505.
The Court has already addressed the appropriateness
infringement claim in Section ii, above.
For the reasons stated above, the Court finds there is no
justification for vacating, altering, amending, or adding to the
findings of the judgment, or for a new trial in this case pursuant
to Rules 60(b)(1) or (6), 59(a) or (e), or 52(b).
The Court holds
there was no excusable neglect or any other reason justifying postjudgment relief, and there were no clear errors of law requiring
Accordingly, IT IS ORDERED that Defendants’ Motion to Vacate
Judgments and for New Trial, and Alternative Motion to Alter or
Amend Judgments or Make Amended or Additional Findings, be, and
the same hereby is, DENIED.
This the 17th day of January, 2017.
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