Professional Documents
Culture Documents
2015-1470
IN THE SUPREME
COURT OF OHIO
Case No.:
Relator,
v.
HONORABLE ROBERT P.
RUEHLMAN,
Hamilton County
Court of Common Pleas
1000 Main Street
Cincinnati, OB 45202,
Respondent.
RELATOR ANGELA FORD, ESQ.'S COMPLAINT FOR WRITS OF PROHIBITION
AND MANDAMUS AND ALTERNATIVE WRIT
COMPLAINT
NOW COMES
through her undersigned counsel, and for her Petition for Writ of Prohibition and Mandamus,
states as follows:
INTRODUCTION
Judge Robert P. Ruehlman ("Judge Ruehlman" or "Relator") has exercised jurisdiction
over a Complaint filed against Ms. Ford by Stanley M. Chesley ("Chesley") in the Hamilton
County Court of Common Pleas when the Complaint does not present a justiciable
controversy.
case or
Judge
Ruehlman has also exceeded any authority he might have by (1) restraining judgment creditors
from domesticating a valid and enforceable foreign judgment, and (2) ordering Ohio citizens not
to comply with the valid and enforceable orders of a sister state court-simply
Ohio citizens.
Judge Ruehlman' s actions in this matter are not supported by any Ohio law or
authority, and this Court must act to prohibit him from further damaging Ms. Ford and her
clients.
The Ohio Constitution sets forth the jurisdictional limitations for courts of common pleas.
Specifically, the Ohio Constitution, Article IV, Section 4(8), provides the common pleas courts
with "such original jurisdiction over all justiciable matters ... as may be provided by law." Ohio
Const., Article IV, Section 4(8).
actual controversies between parties legitimately affected by specific facts and render judgments
which can be carried into effect." State ex rel. Barclays Bank PLC v. Hamilton County Court of
For an actual controversy to exist, the parties must be adverse to each other. This Court
has noted that "[tjhis means not merely a party in sharp and acrimonious disagreement with the
plaintiff, but a party from whose adverse conduct or adverse property interest the plaintiff
properly claims the protection of the law." Id. This Court further explained "the presence of a
disagreement,
to create an actual
controversy if the parties to the action do not have adverse legal interests." Jd.
In the underlying case, Chesley has sued Ms. Ford, the lawyer for his judgment creditors.
(A true and accurate copy of Chesley'S Complaint is attached hereto as Exhibit A). Ms. Ford
represented her clients and obtained a $42 million judgment against Chesley.
Chesley and his co-counsel
litigation is well known and is best summarized in the Kentucky Supreme Court's Order of
Disbarment against Chesley.
See Kentucky Bar Ass 'n v. Chesley, 393 S.W.3d 584 (Ky. 2013).
(A true and accurate copy of this Opinion is attached as Exhibit 8). Whether Chesley owes his
former clients millions of dollars because of his actions is not in dispute and not the subject of
this Writ.
Chesley'S Complaint,
Chesley'S Complaint asks that Ms. Ford be required to produce certain information pertaining to
Chesley'S judgment
can be domesticated.
There is no such
a judgment creditor-s-and thus Chesley could have no claim against her individually.
Second,
Chesley's Complaint does not identify any cause of action against Ms. Ford. It is completely
void of any tort, breach of contract, or statutory claim against either Ms. Ford or the judgment
creditors.
Indeed, Chesley's sole purpose in filing this action can only be to delay collection,
permitting him to continue to receive income from his former practice of law, of which he has
already collected nearly $20 million, with more expected, and dissipate his assets so that his
judgment creditors cannot collect.
protect the judgment creditors when Chesley's restraining order fails. Chesley's Complaint does
not present a justiciable case or controversy that Judge Ruehlman can adjudicate.
Ruehlman does not have the subject matter jurisdiction
Thus, Judge
dismissed.
Not only does Judge Ruehlman lack subject matter jurisdiction over the case because it is
not justiciable,
but he has also exceeded any authority he might have through several of his
In fact, he has issued an order prohibiting Ms. Ford, the judgment creditors, and every
orders.
Ohio lawyer from following Ohio law, specifically R.C. 2329 et seq., to domesticate a valid and
enforceable judgment issued by the Kentucky court. And, Judge Ruehlman ordered this restraint
without any security from Chesley-in
Enjoined "Ford, the unknown Respondents and any other person acting
on behalf of the unknown Respondents . . . from taking any action to
collect the Chesley Judgment in the State of Ohio from any Ohio
resident, Ohio citizen or Ohio domiciled entity, other than Chesley."
Restrained "Ford, the unknown Respondents and any other person acting
on behalf of Ms. Ford and the unknown Respondents ... from issuing
Ordered Thomas Rehme, the Trustee for WSBC, "to not effectuate the
transfer order in any capacity seeking, among other things, to transfer the
interests of Mr. Chesley in the WSBC shares, which interest technically
does not exist as Mr. Chesley has only contingent remainder interest in
the trust."
Ordered
WSBC's
discovery
Kentucky
And there is no support under Ohio law that would allow a judge to
permits domestication and provides the procedure to do so. Finally, no law allows an Ohio court
to interfere with a lawfully issued Kentucky judgment-and
the Constitution expressly prohibits it. Yet Judge Ruehlman has done exactly those things.
And Judge Ruehlman's
actions, and the delay that he has condoned and contributed to,
has very real effects on the judgment creditors' ability to collect on the judgment entered against
Chesley. Discovery in Kentucky has shown that Chesley has not been truthful about his assets in
his responses to post-judgment discovery.
income from a case in Colorado that was recently remanded by the Tenth Circuit Court of
Appeals.
proposed judgment with interest is more than $1 billion, with attorneys' fees to be determined at
a later time. Chesley also failed to mention fees from the Fannie Mae Securities Litigation case,
in which the requested attorneys' fees and expenses total almost $52 million. Chesley'S failure
to disclose these impending income streams, and his obvious intent to enjoin domestication,
show that his purpose is to avoid paying the judgment owed to Ms. Ford's clients. And if they
are not permitted to pursue recovery and enforcement soon, collection success may be severely
diminished.
For these reasons, and those set forth more fully below, Judge Ruehlman is patently and
unambiguously
without jurisdiction
jurisdiction.
.JURISDICTION
1.
This Court has jurisdiction over original actions in prohibition and mandamus to
prevent the unlawful exercise of jurisdiction by Respondent Judge Robert P. Ruehlman, a judge
in the Hamilton County Court of Common Pleas, an inferior court, under Section 2(B)(1 )(b) and
(d) of Article IV of the Ohio Constitution.
2.
This Complaint for Writ of Prohibition seeks an order from this Court preventing
Judge Ruehlman from continuing to hear this matter because he lacks subject matter jurisdiction.
The Complaint presents no case or controversy and therefore is not justiciable.
Additionally,
Ms. Ford seeks an order prohibiting Judge Ruehlman from continuing to exceed his jurisdiction
in this matter, as he has done by: (I) issuing a restraining order prohibiting Ms. Ford or any other
lawyer from domesticating, on behalf of her clients, a valid and enforceable judgment issued by
a Kentucky court as provided in R.C. 2329 et seq.; (2) issuing an order prohibiting Ms. Ford
from pursuing collection,
in
Kentucky, the state that rendered the judgment; (3) ordering individuals not to comply with valid
and enforceable orders of a Kentucky court; and (4) ruling that actions by Ms. Ford in Kentucky
seeking discovery from the judgment debtor in the Kentucky case, through procedures set forth
under Kentucky law, violated the restraining order. Ms. Ford also seeks such other orders as are
necessary to correct the above actions already unlawful1y taken by Judge Ruehlman.
3.
This Complaint for Writ of Mandamus seeks an order from this Court directing
Judge Ruehlman to dismiss the Complaint, or at a minimum, lift the injunction and require Judge
Ruehlman to recuse himself from the underlying
case.
Judge Ruehlman
has permitted a
Complaint that states absolutely no cause of action to continue against an attorney for the real
parties in interest-even
after learning that Chesley had no intent to pursue any type of judgment
controversy as required under the Ohio Constitution and is nothing more than an attempt to halt
enforcement of a valid and enforceable Kentucky judgment with no legal basis to do so.
PARTIES
4.
resides in Kentucky.
of Kentucky.
She also
She is the attorney for the plaintiffs in the case Mildred Abbott et al. v.
Stanley M. Chesley, et al., Case No. 05-CI-00436 (the "Abbott Action"), which remains pending
before the Boone County Circuit Court in Kentucky.
years to recover settlement funds improperly taken by Chesley and his co-counsel in underlying
litigation over use of the diet drug combination known as "fen-phon."
counsel represented those plaintiffs, as well as others, in the fen-phcn litigation and kept millions
of dollars of settlement funds in excess of what was provided in their fee agreements.
5.
has been presiding over Case No. A1500067, Stanley M. Chesley v. Angela M. Ford, Esq. and
the Unknown Respondents, et al.
Ms. Ford, on behalf of her clients, filed the Abbott Action in December 2004. In
2007, Ms. Ford obtained judgment against Chesley'S co-counsel in the amount of $42 million.
These co-counsel were held jointly and severally liable for the damages.
copy of the 2007 judgment
On March 2 L 2013, the Kentucky Supreme Court disbarred Chesley after finding
him guilty of serious ethical violations, including his role in having "knowingly participated in a
scheme to skim millions of dollars in excess attorney's fees from unknowing clients."
393 S.W.3d at 599.
Chesley,
8.
In 2014, following the Kentucky Supreme Court's decision to disbar Chesley, Ms.
Ford, on behalf of her clients, moved for summary judgment against Chesley in the Abbott
Action--seeking
to hold him jointly and severally liable for the $42 million judgment obtained
in 2007.
9.
On August 1,2014, the Kentucky Court granted the Kentucky plaintiffs' motion
and entered an order holding Chesley jointly and severally liable for the $42 million dollar
judgment.
10.
motion to clarify the judgment, and a motion to vacate the judgment pursuant to Ky. R. Civ. P.
60.02.
Exhibit D.
11.
In both the motion to clarify the judgment and the motion to vacate, Chesley
argued that the judgment against him was void because it did not identify the plaintiffs entitled to
recover under the judgment
fully briefed and the Kentucky court heard oral argument on these issues. The court denied both
motions, and the judgment against Chesley became final pursuant to Ky. R. Civ. P. 54.02. A true
and accurate copy of the final judgment, dated October 22 2014, is attached hereto as Exhibit E.
12.
judgment motions.
13.
of the
14.
discovery against Chesley to determine the extent and location of his assets.
THE OHIO CASE
16.
Common Pleas, case no. A 1500067, against Ms. Ford and his former clients, describing them
only as the plaintiffs
Respondents."
17.
Action,
whom
he identified
as the "Unknown
Complaint does not state a single cause of action against Ms. Ford.
Instead, it purports to seek the disclosure of certain information and enforcement of Ohio law in
domesticating or collecting on the judgment against Chesley-even
domesticated the judgment.
Ohio lawyer.
18.
Indeed,
the Complaint
demands
or
otherwise enforce the judgment, she must identify the names and addresses of all of Chesley's
judgment creditors-his
former clients, the amount of the judgment still owed to each one, and
that because this information was not contained in the judgment, the judgment was void. The
Kentucky court rejected this argument.
10
20.
And Ohio law does not require disclosure of all of this information before the
Judgment is domesticated.
Instead, R.C. 2329.022 provides that any foreign judgment can be domesticated
R.C. 2329.023 provide that, at the time the foreign Judgment is filed, the judgment
creditor or attorney must file an affidavit that lists the names and last known addresses of the
judgment creditors and judgment debtor.
23.
Importantly, this requirement ripens only upon the filing of the foreign judgment,
But for 30 days after the judgment is filed, a judgment creditor cannot execute or
stated on the face of the judgment will be known when the judgment
is filed.
the amount
There is no
judgment, and if he collects more, the judgment debtor has remedies available to him to protect
against such actions.
judgment, and have not collected a single dollar from Chesley, this cannot constitute grounds to
prohibit the Abbott Action plaintiffs from domesticating
beginning collection in Ohio.
11
28.
enforcement.
to obtain a stay of
But to obtain this, a judgment debtor must show either that "an appeal is pending
or will be taken from a foreign judgment that is filed pursuant to section 2329.022 of the Revised
Code, or that a stay of execution of the foreign judgment has been granted," and the judgment
debtor must provide
Importantly,
enforcement of a judgment ... would be stayed, the court shall, upon requiring the same security
for satisfaction of the judgment
of a foreign
Ignoring this Ohio law and the Kentucky court's prior rulings, Chesley filed a
judgment creditors' lawyer. This Complaint is completely void of any tort, breach of contract, or
statutory claim against either Ms. Ford or the judgment creditors.
hold the judgment against Chesley.
She acts only at the direction of her clients. In fact, Ms. Ford had not even attempted to
domesticate the judgment against Chesley at the time Chesley filed the Complaint, nor could she
ever. Ms. Ford is not an Ohio lawyer.
Exhibit F.
12
32.
For a period of 14 days, Judge Ruehlman enjoined "Ms. Ford, any co-counsel
acting with her and any other Ohio lawyer representing any of the Unknown Respondents" from:
A.
"(i) taking any action in the State of Ohio to enforce the Chesley judgment
or (ii) serving any Chesley asset related discovery on any Ohio resident,
citizen or domiciliary, except Chesley;"
B.
"making any filing in any Ohio court that would be or could be part of an
effort to domesticate or register the Chesley judgment in Ohio;"
C.
"taking any action to collect the Chesley Judgment in the State of Ohio
fr0111any Ohio resident, Ohio citizen or Ohio domiciled entity, other than
Chesley;"
D.
E.
33.
Judge Ruehlman restrained Ms. Ford from domesticating a judgment when she is
But, not only did he restrain Ms. Ford, he restrained any Ohio lawyer, who
number in the thousands, and who were never given notice or the opportunity to be heard on this
injunction.
35.
second restraining order and set the matter for hearing on March 4, 2015 (the "Restraining
Order"). A true and accurate copy of the Restraining Order is attached hereto as Exhibit O.
13
37.
In the Restraining Order, Judge Ruehlman extended the elements of the TRO until
Despite the fact that Chesley did not move the Kentucky court to stay execution
of the judgment against him, or post the requisite supersedeas bond, for all practical purposes he
obtained just that from the Ohio court-a
And Judge
40.
TO FEDERAL
COURT
On February 5, 2015, Ms. Ford removed the matter to federal court on the basis of
diversity jurisdiction. Chesley, an Ohio resident, chose to style his Complaint in such a way that
Ms. Ford, who was a citizen of Kentucky, was the only named defendant. As the citizenship of
unnamed parties is disregarded, diversity jurisdiction existed.
41.
Immediately after removing, Ms. Ford filed a motion to dismiss the Complaint
and a motion to dissolve the restraining order. True and accurate copies of these motions are
attached hereto as Exhibits H and I, respectively. Ms. Ford moved to dismiss the Complaint
because Ohio lacks personal jurisdiction over her, the Complaint failed to present a justiciable
case or controversy, and it constituted an impermissible collateral attack on a valid and
enforceable Kentucky judgment in violation of the Full Faith and Credit Clause. Ms. Ford's
motion to dissolve was based on similar reasoning, including the length of time the Restraining
Order had been in place without her receiving a hearing. For the next several months, Ms. Ford
attempted to have the federal court hear her motion to dissolve, or to simply hold a hearing on
the injunction.
14
42.
In the meantime, Chesley, desperate to return to state court, moved to amend his
The federal court allowed Chesley to amend the Complaint and remanded the
matter, without ruling on the motion to dismiss or the motion to dissolve the Restraining Order.
45.
At the time of the remand, Ms. Ford had been restrained by Judge Ruehlman's
On May 14, 2015, Judge Ruchlman held a hearing on Ms. Ford's motion to
dismiss and motion to dissolve the restraining order. A true and accurate copy of the transcript
from the May 14, 2015 hearing is attached hereto as Exhibit J.
47.
Judge Ruehlrnan
thus denied the motion to dismiss, because she had served Kentucky subpoenas in Kentucky on
Ohio domiciled entities doing business in Kentucky and had clients in the Kentucky lawsuit who
resided in Ohio. According to Judge Ruehlman, she "[came] across the river" seeking thingspresumably Chesley'S assets-which
stuff over in Ohio, or trying to ....
were located in Ohio and thus, because she was "doing this
[Chesley] has a right to protect himself."
(Id. at 20-23).
Judge Ruehlman did not address the remaining points raised by Ms. Ford in her motion. A true
and accurate copy of the order denying Ms. Ford's motion to dismiss is attached hereto as
Exbibi_tj~
48.
Notably,
any discovery
15
49.
Judge Ruehlman also denied the motion to dissolve the Restraining Order because
"it's their own motion that essentially caused it to be continued, and we couldn't rule on it
because Federal court had it." (Id. at 28; see also Exhibit K).
50.
When Ms. Ford requested that Chesley be required to post security as required by
Ohio Rule of Civil Procedure 65, Judge Ruehlman refused to require security.
noted that Chesley failed to post a supersedeas bond in Kentucky, but had come to Ohio and had,
for all practical purposes, obtained a stay without posting any security, Judge Ruehlman inquired
as to the amount of the bond necessary to stay enforcement in Kentucky.
51.
Ms. Ford noted that Chesley would have had to post a bond in the amount of the
judgment.
52.
Judge Ruehlman responded "that is kind of cruel," and then, despite the amount
of money and conduct involved in the case, he decided not to make Chesley post any type of
bond. (Id. at 31).
53.
The matter was set for a hearing on a preliminary injunction motion on June 24,
2015. But Chesley was not available on that day. So no hearing occurred that day.
54.
In the interim, multiple filings were made by the parties, and WSBC, Chesley's
former law firm, moved to intervene and also moved for injunctive relief.
56.
Chesley
this Agreement is attached hereto as Exhibit L. Notably, the Wind Up Agreement was never
filed in the Ohio state court record.
16
57.
Chesley's
shares "for the exclusive purposes of winding up [WSBC] for the benefit of its
In Kentucky,
beneficial interest in WSBC transferred to the Abbott Action plaintiffs with all payments on that
interest payable to them through their counsel, Ms. Ford.
On or about June 23, 2015, the Kentucky court entered an order requiring Chesley
to direct that his beneficial interest in the shares of WSBC be transferred to his judgment
creditors within fourteen days and that all distributions pursuant to said interest be made to the
judgment
creditors
transferred $59 million from personal accounts to WSBC, including $1,322,000 of that amount
on or after the date of the Wind Up Agreement.
The Kentucky court denied Chesley's post-entry motions pertaining to this Order.
Chesley has appealed the order, and he also sought interlocutory relief from the Kentucky Court
of Appeals pending his appeal of the Order.
61.
On or about August 25, 2015, the Court of Appeals denied Chesley's request for
interlocutory relief. A true and accurate copy of this order is attached hereto as Exhibit O. That
court found that Chesley failed to show a likelihood of success on the merits or irreparable harm.
62.
Also on June 23, the Kentucky court entered an order granting in part the Abbott
Action plaintiffs' motion for contempt against Chesley, compelling Chesley to respond to certain
17
Exhibit P.
63.
Specifically,
responses to the judgment creditors' request for information and documents related to Chesley's
interest in WSBC.
64.
The Kentucky court ordered that Chesley produce information related to WSBC
in response to the judgment creditors' discovery requests within 21 days of the Order.
65.
addition to the $59 million transfer to WSBC that will be the subject of future proceedings.
Discovery in the Abbott Action has also shown that Chesley has continued to receive fees, nearly
$20 million since he was disbarred and is now waiting on a ruling on fees from a jury verdict that
was returned last month from the Tenth Circuit with damages over $1 billion.
JlJLY 8 HEARING
66.
A true and
accurate copy of the transcript from the July 8 hearing is attached hereto as Exhibit Q.
67.
During this hearing, Ms. Ford informed Judge Ruehlman of the Kentucky court's
orders and the potential impact on WSBC's motion to intervene. Indeed, the judgment creditors
were now the beneficiaries of the trust, created by the Wind Up Agreement, and they certainly
did not authorize WSBC to bring suit against themselves.
to pursue the motion to intervene for the purpose of suing its beneficial owners. WSBC's lawyer
declined to identify who retained him or authorized him to move to intervene.
18
68.
But during the hearing, Judge Ruehlman questioned whether the Kentucky court
had jurisdiction
over Chesley-despite
Instead of acknowledging the Kentucky court's orders and the potential affect of
those rulings on the Ohio proceedings, Judge Ruehlman responded only that "lilt's a battle of the
courts." (ld. at 6).
70.
The parties also argued about the manner by which testimony would be offered at
Chesley-the
plaintiff
she had remained under restraint for more than seven months without a hearing.
72.
a media frenzy.
to concerns with
Chesley also asked that a hearing be postponed until after the motion to
Over Ms. Ford's objection, Judge Ruehlman agreed and set the matter for hearing
on August 19, 2015, at which time he would rule on the motion to intervene and the parties
would discuss at long last the preliminary injunction hearing.
74.
At that time, Ms. Ford had been under restraint for more than 170 days without
being heard.
THE AUGUST 19,2015 HEARING
75.
On August 19, 2015, the parties again appeared before Judge Ruehlman.
19
The
A true and accurate copy of the transcript from the August 19, 2015
In addition to the lawyers for Ms. Ford, Chesley, and WSBC, one of the named
After hearing argument on the motion to intervene, Judge Ruehlman ruled that he
At that time, WSBC noted that it had tendered an entry. Ms. Ford objected to the
evidence had not been submitted and that it ordered more than just WSBC's intervention.
79.
In fact, the order granted WSBC's motion for declaratory and injunctive relief.
80.
After making minimal changes to the order in response to Ms. Ford's objections,
Exhibit S.
81.
In this Order, Judge Ruehlman concluded that Ms. Ford filed several motions in
Kentucky, "the Transfer Motion, the CSH Compel Motion, and the Chesley Compel Motion in
direct violation of the Restraining Order."
82.
Judge Ruehlman found that Ms. Ford's actions in the Kentucky proceeding before
failures in his discovery obligations in that Kentucky case were a violation of his Ohio order.
Judge Ruehlmari's jurisdiction does not extend this far.
83.
Judge Ruehlman also found that, "[a]s between this Court and the Kentucky
Court, this Court, whose power was first invoked by the institution of proper proceedings
acquired jurisdiction, to the exclusion of all other tribunals, has exclusive authority to adjudicate
20
upon the whole issue and to settle the rights of the parties with respect to the matters set forth in
the Complaint, Restraining Order, and the Motion."
84.
Judge Ruehlman entered this finding despite the fact that the Abbott Action has
been proceeding in Kentucky since 2004, and Chesley's Complaint underlying this action was
not filed until January 2015.
85.
Judge Ruehlman
exclusive jurisdiction
over the matters set for [sic] in the Complaint, Motion and Restraining
Order, the orders of the Kentucky Court in relation to the Transfer Motion and the Chesley
Compel Motion, including but not limited to the Transfer Order (the "Kentucky Orders"), are
unenforceable as to any Ohio resident, Ohio citizen or Ohio domiciled entity that Ms. Ford seeks
directly or indirectly, to aid in the collection of the Chesley Judgment and/or subpoena seeking
documents or testimony that would aid in the collection of the Chesley Judgment."
87.
But
He further ordered WSBC "to disregard and not effectuate any of the
Kentucky Orders as same may apply to WSBC or the Trust either directly or indirectly, including
but not limited to the Transfer Order."
88.
Similarly, he ordered Rehme to disregard and not effectuate any of the Kentucky
Orders.
21
89.
Judge Ruehlman went so far as to order Rehme "to not effectuate the Transfer
Order in any capacity seeking, among other things to transfer the interest of Mr. Chesley in the
WSBC Shares, which interest technically does not exist as Mr. Chesley has only a contingent
remainder interest in the Trust."
90.
for WSBC's
Judge Ruehlman then ordered Rehme "to decline any request from Mr. Chesley
financial records to the extent such request emanates from a discovery request
By these actions, Judge Ruehlman directly interfered with the Kentucky court's
orders, and the Kentucky Court of Appeals has already concluded that Chesley is unlikely to
succeed on the merits of his challenge to the transfer order.
92.
Finally, Judge Ruehlman reaffirmed that the Restraining Order remained in full
As of August 19, 2015, Ms. Ford had been restrained 217 days without being
Judge Ruehlman also permitted Chesley to again amend his Complaint to name
additional defendants, despite one of the defendants being at a Florida address and others who
reside outside of Hamilton County.
95.
additional
defendants have been properly served. One of those defendants is not a judgment creditor and is
not a client of Ms. Ford. The second, Ms. Boggs, lives three hours from Hamilton County, in
Lawrence County.
96.
After Judge Ruehlman ruled on the pending motions, Ms. Boggs addressed the
Court. She told of the hardship she had endured because Chesley stole the money owed to her
22
under the fen-phen settlement and the delays in collection, including having to file bankruptcy
and struggling to keep her home. (See Exhibit S, at 53-55).
97.
Ms. Boggs detailed her confusion as to why she was sued and how she would
answer the Complaint when there was "nothing in there to answer to." (ld. at 59).
98.
She repeatedly asked Judge Ruehlman how Chesley could be suing her.
99.
Chesley's counsel assured Ms. Boggs that they had no intention of pursuing a
monetary judgment against Ms. Boggs, or any of the other named defendants.
100.
removal and that she was needed only to defeat diversity jurisdiction.
101.
(Jd. at 55-56).
(Jd. at 59).
joinder"-Judge
Ruehlman further asked Chesley's counsel to confirm that Chesley would not
go after her. (ld. at 60). Chesley's counsel confirmed that on the record. (ld.).
102.
So, Chesley has now confirmed in open court that he had no intention of pursuing
will only pursue the lawyer. The lawyer who cannot even domesticate the judgment because she
is not an Ohio lawyer. And the lawyer who has no legally adverse interest against him.
103.
These statements in open court further demonstrate that this lawsuit is nothing
more than a vendetta against Ms. Ford designed to give Chesley more time to hide his assets
while avoiding the supersedeas bond requirement.
104.
hearing.
Following this colloquy, Judge Ruehlman asked the parties about scheduling the
23
plaintiff in the
case-would
argued was
said that "I'll just set a hearing date and I don't care
- if you want to do it by videotape or you want to do it by live, I'm fine, you want to have some
witnesses on video, that's fine, I don't care."
parties." (Id.).
106.
Judge Ruehlman then set the matter for hearing on a permanent injunction on
September 30, 2015 will be the first time Ms. Ford will have an opportunity to be
heard on the motion for injunctive relief, and she has no reasonable expectation that the
injunction will not become permanent against her and her. And that will be 259 days after she
was enjoined.
examination.
MS. FORD DISCOVERS PREVIOUSLY UNDISCLOSED INCOME STREAMS AND
SEEKS THE KENTUCKY COURT'S ASSISTANCE IN ENFORCING THE JUDGMENT
AGAINST CHESLEY
108.
Discovery in Kentucky has shown that Chesley has not been truthful about his
assets in his responses to post-judgment discovery. Indeed, Chesley'S omissions have prompted
Ms. Ford to file a Motion to Execute against Chesley. A true and accurate copy of this motion is
attached hereto as Exhibit T.
109.
Ms. Ford has learned that Chesley failed to disclose potential future income from
a case in Colorado that was recently remanded by the Tenth Circuit Court of Appeals. See
Merilyn Cook et al. v. Rockwell Int'l Corp., Case No. 14-1112, slip op. (10th Cir. June 23,2015).
A motion for entry of judgment is currently pending in that district court, and the proposed
24
judgment with interest is more than $1 billion, with attorneys' fees to be determined at a later
time.
110.
Chesley also failed to mention fees from the Fannie Mae Securities Litigation
case, in which the requested attorneys' fees and expenses total almost $52 million. In Re Fannie
Mae Securities Litg., Case No.1 :04-CV -01639, pending in the District of Columbia.
Ill.
to delay Ms. Ford's collection efforts in Ohio so that he can receive this impending stream of
income without her reaching it. Chesley obviously seeks to avoid paying the judgment owed to
Ms. Ford's clients.
112.
IS
diminishing
Ms. Ford hereby repeats and realleges the foregoing allegations as if fully restated
114.
Judge
herein.
Ruehlman
has
exercised
judicial
and/or
quasijudicial
power
by:
enforce a foreign judgment; (3) restraining Ms. Ford from pursuing collection on a valid and
enforceable judgment
issued by a sister state court for reasons related to the validity of the
judgment, as specifically prohibited by the Full Faith and Credit Clause; (4) ordering individuals
not to comply with valid and enforceable orders from a sister state court; and (5) ruling that
actions by Ms. Ford in Kentucky that sought discovery against the judgment debtor through
procedures set forth under Kentucky law violated the Restraining Order. Judge Ruehlman also
25
exercised jurisdiction by declaring exclusive jurisdiction over issues related to and encompassed
by a case that has been pending before Kentucky court since 2004.
115.
Judge Ruehlman patently and unambiguously lacks jurisdiction to permit this case
The Ohio Constitution limits a judge in the court of common pleas to hearing only
justiciable controversies.
include an actual case or controversy between parties with adverse legal interests.
State ex rel.
Barclays Bank PLC v. Hamilton County Court 0.[ Common Pleas, 74 Ohio St.3d 536, 542, 660
N.E.2d
458 (1996).
If an actual controversy
patently
and
Indeed, a judge
lacks jurisdiction
statutory
See State, ex rel. Celeste, Governor v. Smith, Judge, 17 Ohio St.3d 163,478 N.E.2d
763 (1985) (granting a writ when a temporary restraining order precluded relators from pursuing
exclusive statutorily prescribed remedies).
Judge Ruehlman's
domesticating or enforcing the foreign judgment as set forth in R.C. 2329 et seq. Under this law,
there are no prequalifications
118.
unless there is a question as to the sister state court's jurisdiction or a question of fraud. See
Milliken v. Meyer, 311 U.S. 457, 462, 61 S. Ct. 339,85 L. Ed. 278 (1940). Neither issue exists
here, and so Judge Ruehlman is without jurisdiction
judgment, especially when certain of the information he demands to be disclosed, i.e. the names
and addresses of the judgment creditors, is not required until domestication-not
before-and
there is no requirement that the amount of the judgment remaining to be collected be disclosed.
26
119.
enforceable orders from a sister state court. Such interference with another court's proceedings
and orders contradicts the Full Faith and Credit Clause. See id.
120.
applies to "actions
it does not apply when an action is pending in another state"); see also
Hoppel v. Greater Iowa Corp., 68 Ohio App.2d 209, 428 N.E.2d 459 (9th Dist.1980).
122.
Judge Ruehlman
exercise judicial and quasi-judicial power to facilitate and enable the interference of Ms. Ford's
efforts to collect on the judgment against Chesley, especially in light of the pending hearing on
permanent injunction.
123.
Unless Judge Ruehlman is prohibited from exceeding his lawful authority, Ms.
Ford and her clients will suffer irreparable harm. As noted above, Chesley has already received
more than $20 million in fees since the judgment against him was entered, and he stands to
receive additional money depending on the outcome of certain pending proceedings-involving
damagesof$l
124.
billion.
Ms. Ford's clients' lawful right to enforce and collect their judgment pursuant to
27
addressed by a future appeal, should a final and appealable order ever actually be entered. Every
day that passes allows Chesley to dissipate and transfer assets in an attempt to defeat the
judgment entered against him and further jeopardizes
her client's judgment as permitted by Ohio law. In this instance, justice delayed may well be
justice denied.
125.
without jurisdiction to
issue these orders, or to hear the matter at all, the availability of an alternative remedy at law is
immaterial.
See State ex reI. Adams v. Gusweiler, 30 Ohio St.2d 326, 329, 285 N.E.2d 22
( 1972).
126.
spare Ms. Ford and her clients from the irreparable harm which will result from the violation of
lawful jurisdictional
forth above.
127.
acting in a judicial
and/or quasi-judicial
lack of
continuing to hear this case and issuing orders which directly contradict and interfere with the
Kentucky court's judgment and orders, not to mention Ohio law, including prohibiting Ms. Ford
or any other lawyer from domesticating the judgment in Ohio, taking action to enforce or collect
the judgment, and ordering others not to comply with the Kentucky court's orders.
28
COUNT TWO:
WRIT OF MANDAMUS
129.
Ms. Ford hereby repeats and realleges the foregoing allegations as if fully restated
130.
Judge Ruehlman has: (1) permitted a Complaint which fails to even recite a cause
herein.
of action to proceed against Ms. Ford; (2) issued unlawful orders interfering with the Kentucky
court's orders; and (3) construed his Restraining Order to restrain Ms. Ford from pursuing
collection in Kentucky.
131.
Ms. Ford has the clear legal right not to be subjected to a Complaint which does
not assert a cause of action, especially when it is asserted against her for actions done in her
capacity as the lawyer for her clients in Kentucky. Such a Complaint does not assert ajusticiable
claim, and thus cannot proceed.
132.
Judge Ruehlman has no authority or power to interfere with the orders of the
Kentucky court, and Ms. Ford and her clients have the clear legal right for those orders to stand
unless properly challenged in the commonwealth of Kentucky.
133.
Ms. Ford and her clients have the right to domesticate the judgment against
Chesley. The judgment is final and enforceable, and Chesley has not moved to stay or posted the
requisite bond in either Kentucky or Ohio to guard against enforcement.
134.
Judge Ruehlman is permitted to adjudicate only those matters over which he has
jurisdiction.
135.
Similarly, Judge Ruehlman's orders must be lawful. They cannot, for example,
Judge Ruehlman has issued orders in a case over which the Hamilton County
Court of Common Pleas has neither personal nor subject matter jurisdiction.
29
137.
The restraint instituted by Judge Ruehlman imposes irreparable harm on Ms. Ford
Chesley's
proven
exercise
of
jurisdiction and unlawful restraint, and Ms. Ford is entitled to a writ of mandamus compelling
dismissal of the underlying case. In the alternative, Ms. Ford asks this Court to issue a writ of
mandamus directing Judge Ruehlman to vacate the injunction and ordering Judge Ruehlman to
recuse himself in the underlying matter.
COUNT THREE:
139.
ALTERNATIVE
WRIT
Ms. Ford hereby repeats and realleges the foregoing allegations of this pleading as
Because jurisdiction
lacking,
the availability
of an alternative
remedy
at law is immaterial.
Nevertheless, Ms. Ford does not have an adequate remedy at law that can immediately halt Judge
Ruehlrnan's unauthorized exercise of power.
141.
Immediate relief is necessary to prevent Ms. Ford from being subjected to the
orders and the pending order to result from the hearing on the permanent
injunction on
render the orders on the underlying case pending in the Hamilton County Court of Common
Pleas.
Ms. Ford is entitled to a peremptory writ of prohibition barring Judge Ruehlman from
30
asserting jurisdiction
Chesley's
authority by
Complaint
should be dismissed, or at a minimum, these orders should be stricken, and the injunction against
Ms. Ford should be vacated.
Furthermore,
Ms. Ford asks this Court to issue a writ of mandamus, ordering Judge
issue a writ of mandamus directing Judge Ruehlman to vacate the injunction and orders he has
issued and ordering Judge Ruehlman to recuse himself in the underlying matter.
Finally, Ms. Ford is otherwise entitled to the immediate issuance of an alternative writ
barring Judge Ruehlman from exceeding his lawful jurisdictional
authority by continuing to
31
STATE OF OHIO
COUNTY OF HAMILTON
)
)
)
SS.
Brian S. Sullivan, being duly cautioned and sworn, deposes and states as follows:
1.
of the facts
I am one of the attorneys of record for Ms. Angela M. Ford, Esq. in the case
pending in the Hamilton County Court of Common Pleas, Case No. A1500067.
3.
The facts pertaining to the proceedings in the Hamilton County Court of Common
Pleas before Judge Robert P. Ruehlman as set forth in the Complaint for Writs of Prohibition and
Mandamus are true and accurate based on my personal knowledge.
4.
The materials which are included as exhibits to this Complaint for Writs of
Prohibition and Mandamus were all generated and issued in connection with the aforementioned
litigation.
The copies which were issued are maintained in the ordinary course of my law
practice.
FURTHER AFFIANT SA YETH NAUGHT.
Subscribed and sworn to before me, aN otary Public, this 4\~kday of September, 2015.
Sec. 147.03RC.
COUNTY OF FAYETTE
)
)
SS.
Angela M. Ford, being duly cautioned and sworn, deposes and states as follows:
L
I am the attorney of record for the plaintiffs in the Mildred Abbott et al.
v,
Stanley
M Chesley, et al., Case No. 05-CI-00436 (the "Abbott Action"), which remains pending before
I am not licensed
I have reviewed the Complaint for Writs of Prohibition and Mandamus and affirm
that the facts pertaining to the Abbott Action as set forth therein are true and accurate based on
my personal knowledge.
_._.3;__day of September,
2015.
EXHIBIT
fl
COURT OF COMMON PLEAS
HAMILTON COUNTY, OHIO
Case No,
Judge Ruehlman
v.
VERIFIED
PETITION FOR ])ECLARATORY
JUDGMENT AND IN.JUNCTIVE
RELIEF
COMES NOW Petitioner Mr. Stanley M. Chesley ("Chesley"), through the undersigned
counsel, who in support of this petition states as follows:
SUMMARY OF PROCEEDING
Chesley finds himself in a bizarre situation - subject to a judgment issued by a Kentucky
court the current total amount of which is unknown and which is owed to a list of approximately
400 persons that has not been updated in over 10 years. Given the virtual certainty that at least
one of those persons died or was the subject of a bankruptcy petition, it is true that the judgment
against Chesley is in an unknown amount owed to unknown judgment creditors.
Despite those flaws, Respondent Angela M. Ford ("Ford"), on behalf of the judgment
creditors (a/k/a the "Unknown Respondents"), has commenced collection efforts including "postjudgment" discovery directed to Chesley. Because Chesley's res that Ford targets, Chesley's
1 IFI 1 A 1500067
assets, are in Ohio, the only way Ford can recover from Chesley is by coming to Ohio and
invoking this Court's jurisdiction and assistance.
In the same manner, Ford's best means of obtaining information from third parties with
whom Chesley has some affiliation is to come to Ohio and invoke this Court's jurisdiction
and
assistance.
Hence, the filing of this case by Chesley to assure that a modicum of fairness prevails in
respect to Ford's collection efforts so that the rights and interests of Chesley and third parties
who Ford has targeted with discovery may be properly protected.
this action, the rights of Chesley and others will be irreparably harmed.
Accordingly,
Chesley seeks a declaration that Ford and any other counsel acting on
against
Chesley without first disclosing to this Court and Chesley (i) the actual total amount now owed
on that judgment,
judgment
and (iii) the amount owed to each specific judgment creditor after credit for the
amounts distributed by Ford and amounts retained by Ford as her fee. Ford's failure or refusal to
provide
this information
implementation
of Ohio public policy imperatives, (c) deprives Chesley of valuable rights, (d)
deprives the judgment creditors of their rights, (e) impairs the rights of other third patties from
whom, or about whom, Ford seeks information,
avoidance
of her ethical
The post-judgment discovery that Ford has served on Chesley in Kentucky seeks to obtain from Chesley
information concerning and belonging to third parties (almost all of whom are Ohio domiciles) in an attempt to
circumvent the applicable rules and deprive those third parties ofthe protections 10 which they are afforded by Ohio
law.
obligations
and Kentucky from making informed decisions on certain issues that may arise in this matter.
INTRODUCTION
1.
Chesley is a resident of Hamilton County, Ohio as are his wife and certain other
persons and entities against which Ford has threatened to issue subpoenas and from whom Ford
has threatened to seek the recovery of assests. Venue of this matter is appropriate in this Court.
2.
lawyer in the Commonwealth of Kentucky who represents the plaintiffs in litigation styled
Mildred Abbott et al.
1'.
No. 05CI00436 (the "Abbott Case"). Some or all of the Abbott Case plaintiff'>are Chesley's
judgment creditors and arc the "Unknown Respondents" herein. Ford has minimum contacts
with Ohio consistent with this Court's appropriate exercise of personal jurisdiction over Ford.
3.
On October 22, 2014 the Boone County, Kentucky Circuit Court ("Boonc Circuit
Court") entered a Second Amended Judgment against Chesley in (he Abbott Case (the "Chesley
Judgment"). The Chesley Judgment incorrectly purports to impose on Chesley joint and several
liability with three other individuals who suffered a prior judgment in the Abbott Case. The
Chesley Judgment is based solely on the principal of collateral estoppel and holds that the
Kentucky Supreme Court decided all the factual issues necessary to establish Chesley's liability
to the Abbott Case plaintiffs when the Kentucky Supreme Court considered disciplinary action
against Chesley. See Exhibit A. Chesley disagrees with this conclusion.
4.
Chesley has exercised his right to appeal the Chesley Judgment to the Kentucky
Chesley's
confidence is based in part on the fact that in 2014 Judge Schrand of the Boone Circuit COUl1
1 IFI 1 A 1500067
crocheted together Chesley and the Criminal Defendants (defined below) but (i) Judge Wehr of
that same court previously said, "[t]he rationale of the previously entered partial summary
judgment [against the Criminal Defendants] does not apply to" Chesley and (ii) the Kentucky
Court of Appeals agreed when it refused to equate Chesley with the Criminal Defendants in 20 II
and (iii) the 2013 Kentucky Supreme Court's Abbott v. Chesley decision agreed:
Appellants also contend that the joint and several liability of COM [the Criminal
Defendants] should extend to Chesley because he acted in concert with COM.
We decline the invitation to do so. '" Chesley's role in the enterprise clearly
differed from that of Cunningham, Gallion, or Mills. The agreement itself seems
to treat him differently.
Judge Schrand's decision against Chesley is a clear outlier.
5.
Nothing in this Petition or any other document filed herein admits that Chesley
agrees with any particular finding of fact and conclusion of law that led to the Chesley Judgment.
Infer alia,
Chesley disputes the Chesley Judgment's holding that he is jointly and severally liable
with the Criminal Defendants because the Chesley Judgment arose out a procedural morass
wherein Ford and the Doone Circuit Court conflated the issues in a disciplinary matter and those
in the Abbott Case, a civil lawsuit where parties are entitled to complete discovery on damages,
and a reasoned decision based on the merits; Chesley received neither in the Abbott Case.
Instead, Judge Schrand summarily applied collateral estoppel in the Abbott Case.
6.
The three other jointly liable judgment debtors (hereinafter the "Criminal
Defendants") were accused of federal crimes for their actions that form the basis of the Abbott
Case. For that reason, the August 2007 judgment against those three persons in the Abbott Case
is referred to herein as the "Criminal Defendants Judgment."
IFI I A 1500067
THE .JUDGMENT,
7.
COLLECTION
ACTIVITY
AND
MON~Y DISSIPATED
After entry of the 2007 Criminal Defendants Judgment, but prior to the entry of
the Chesley Judgment, Ford and her co-counsel collected many millions of dollars from the
Criminal Defendants. As a matter of law, the gross amount of those collections must be credited
against the Criminal Defendants Judgment, thus reducing the amount of that judgment.
Reducing the Criminal Defendants Judgment will simultaneously reduce the amount of the
Chesley Judgment since the Boone Circuit Court held Chesley jointly and severally liable for the
same $42,000,000 in damages owed by the Criminal Defendants to the Abbott Case plaintiffs.
8.
seven years after entry of the Criminal Defendants JUdgment, the stated amount of the 2014
Chesley Judgment is also $42,000,000 plus 8% prejudgment interest and 12% post judgment
interest." Ford failed to disclose to the Boone Circuit Court the amount collected against the
Criminal Defendants Judgment; so the Boone Circuit COUltmade no adjustment when it entered
the stated amount of the Chesley Judgment.
9.
criminal case beard by the United States District Court of the Eastern District of Kentucky
Criminal Case No. 07-39-WOB (the "Criminal Case").
Chesley's counsel was not involved in the determination of the $42,000,000 amount because it was first
determined in a sum IIIary judgment motion against the Criminal Defendants not Chesley.
3 The $42,000,000 amount (i) is a calculation relating to the Criminal Defendants and not Chesley, (ii) is wholly
disconnected from any funds Chesley received, and (iii) fails to reconcile the fact that the Kentucky Supreme COUl1
suggested that the maximum judgment to which Chesley would be $6,465,621.87, the "worst case" amount by
which Chesley was overpaid in the Settled Case.
10.
Upon information
funds collected
some of the
disbursed,
Examples include:
(i) Ford permitted some of the seized assets to be operated by a state court
receiver rather than immediately selling those assets and applying the proceeds to
the Criminal Defendants Judgment.
The receivership operated at a cash flow
deficit requiring that other cash payable to the Abbott Case plaintiffs be used to
support the receivership. The receivership's use of saleable assets caused those
assets to lose value;
(ii) Ford selected a Kentucky lawyer as her co-counsel for collection work on the
Criminal Defendants Judgment.
Ford now claims that Kentucky lawyer
improperly transferred over $2,000,000 to persons that were not Ford, Ford's
designees, or the Abbott Case plaintiffs; and
(iii) The Criminal Case victims included 14 known persons who were not Abbott
Case plaintiffs.
As the Victims Advocate, Ford accepted duties to those 14
persons. To meet her duties to those 14 persons, Ford diverted funds from the
Abbott Case plaintiffs into an escrow account for the potential benefit of those 14
persons.
11.
The Criminal Defendants Judgment must be reduced by the total gross value of all
Defendants
or otherwise
Judgment at the time those assets were seized by Ford or her co-counsel
was terminated
funds from the Abbott Case plaintiffs to persons who were Crimina! Case victims but not Abbott
Case plaintiffs, or (v) the retention of funds by Ford or her co-counsel."
reductions
Neither the Criminal Defendants Judgment nor the Chesley Judgment include an award of attorney fees. So, any
funds collected by Ford but not disbursed to the Abbott Case plaintiffs reduce the amount owed 011 the judgments.
-I
1 IFI 1 A 1500067
12.
were convicted
Defendants,
(the "Criminals"),
ordered to pay restitution to their victims, most of whom are Abbott Case plaintiffs. Forfeiture
of certain assets was also ordered in the Criminal Case. Credit against the Criminal Defendants
Judgment and therefore the Chesley Judgment must to be given for all amounts paid to the
Abbott Case plaintiffs as restitution or from forfeited assets.
13.
accounting of all funds paid to the Abbott Case plaintiffs on account of her collection efforts or
distributions made in the Criminal Casco Despite numerous requests, Ford has refused to provide
to Chesley an accurate accounting of all funds that are legally to be credited against the Chesley
Judgment, including any and all amounts, including but not limited to those described above that
were not paid to the Abbott Case plaintiffs.
14.
Judgment in the same amount because the 2014 Chesley Judgment is based on the amount of the
2007 Criminal Defendants Judgment and the Chesley Judgment is explicitly "joint and several"
with the Criminal Defendants Judgment.
15.
Chesley an accurate accounting of the pre-judgment and post-judgment interest that Ford alleges
has accrued and is accruing under the Chesley Judgment.
accruing interest must be adjusted downward each time Ford made assets seizures that reduce the
$42,000,000 principal balance of the Criminal Defendants Judgment. The amount of accrued
and/or accruing interest must also be adjusted downward to recognize the forfeiture of assets in
the Criminal Case and restitution distributions in the Criminal Case.
1 IFI 1 A 1500067
16.
The pre-judgment
interest
rate (8% versus 12%). Because the Criminal Defendants Judgment was entered in 2007 and the
Chesley Judgment was entered in 2014, there is a seven year period when interest accrued on the
Criminal Defendants Judgment at the higher post-judgment
pre-judgment
8% interest rate applies. Ford must account for this 7 year discrepancy.
Various filings in the Abbott Case and certain filings in the Criminal Case
disagree with respect to the number and identity of the Abbott Case plaintiffs. The "Plaintiffs"
in the Abbott Case arc the stated beneficiaries of the Chesley Judgment and are real parties in
interest in this proceeding - the Unknown Respondents. See Exhibit A. Despite requests, Ford
has refused to provide to Chesley (i) an exact number of Abbott Case plaintiffs who arc
Chesley's creditors, (ii) the name of each current judgment creditor, (iii) an address for each
current judgment creditor, and (iv) the amount owed to each current judgment creditor after the
distributions of millions dollars to those persons in the Abbott Case and the Criminal Case.s
18.
POI'
3S
respondents herein an
unknown number of Jane Doe and John Doc persons or entities (e.g. bankruptcy estates
estates of deceased Abbott Case plaintiffs).
01'
disclose the names and addresses of each current judgment creditor so that those persons
OJ'
Public policy in Ohio and Kentucky both promote the settlement of litigation.
Without knowing the identity of the Unknown Respondents and the current amount owed
Identifying the current judgment creditors and the amount now owed each after all proper credits is the most
fundamental element of a valid judgment. The danger of allowing Ford 10 proceed in Ohio to collect on the Chesley
Judgment without first providing this basic information is readily apparent; for example, if Chesley were inclined to
consider making any reasonable settlement offers and if some or the Unknown Respondents wanted to accept, \0
whom would he make that check payable and from whom would he obtain a release or satisfaction (Ifjudgment?
5
specifically to each of them, Chesley cannot consider possibly making any reasonable settlement
offers to any of those persons.
20.
made by Chesley so that those clients can exercise their individual right to accept or reject that
offer.
concerning any
settlement offer made by Chesley so that any particular client can knowingly exercise his or her
right to accept
01'
reject that offer. Ford's refusal to disclose to Chesley the identity of the
Unknown Respondents and the amount owed to each of them protects Ford from the complicated
work of communicating settlement offers to specific individual clients and advising each of them
individually
011 the
21.
Ford made several filings in the Criminal Case and in the Sixth Circuit COUl1or
Appeals seeking to keep from Chesley (i) the total value of assets seized on account of the
Criminal Defendants Judgment, (ii) the names and addresses of her clients, (iii) the amounts
distributed to those clients, and (iv) the amount of money she collected that was not distributed
to her clients.
22.
Ford's refusal to provide requested information to Chesley (i) impairs Ohio and
Kentucky's public policy that favors settlements, (ii) deprives Ford's individual clients of the
potential opportunity to receive and consider settlement offers from Chesley, (iii) avoids Ford's
obligation to communicate those settlement offers to her clients, (iv) deprives Chesley of
valuable rights and (v) deprives courts in Kentucky and Ohio of information they may need to
handle certain issues that may arise in connection with this matter.
23.
Ford's actions threaten the rights of third parties in Ohio who Ford has stated she
intends to depose and whose rights Ford has attempted to violate by seeking their private
6
The Abbott elise is II "muss action" and not a class action proceeding.
IFI / A 1500067
financial documents and information from Chesley rather than by pursuing the proper procedural
mechanism
for obtaining
the information directly from this third parties - a process that would
subpoenas, and at the same time, afford those third parties the opportunity to protect themselves
and their information under the auspices of the Ohio courts.
24.
significant opportunity
Chesley had no
the Criminal Case that created all the necessary adjustments to the amount owed on the Criminal
Defendants Judgment and, consequently,
The "res" in this matter, Chesley's assets, if any, are in Ohio not in Kentucky.
Chesley does not have significant assets in the Commonwealth of Kentucky that are subject to
seizure for collection on the Chesley Judgment.
Judgment in the State of Ohio and take collection action on assets located in the State of Ohio.
26.
Ford has threatened to issue subpoenas and take depositions of Chesley's wife,
that his family members and Ford's other targets will not voluntarily provide information to Ford
thereby requiring Ford to issue subpoenas to those targets, many of whom have no presence in
Kentucky and are not subject to a subpoena issued by the Boone Circuit Court.
Upon
information and belie1~Chesley asserts that (i) some of the targets ofFord's discovery efforts are
not parties to, or currently aware of, the Abbott Case and (ii) some of the assets Ford might
attempt to seize are used by, held by or owned by entities who are not patties to, or currently
10
1 IFI 1 A 1500067
28.
Chesley does not have the ability to secure a supersedeas bond in the amount of
plus millions in accrued interest, the stated amount of the Chesley Judgment.
If any money is owed by Chesley to the Abbott Case plaintiffs, Chesley believes
that an accurate calculation of the remaining amount owed on the Chesley Judgment may
substantially reduce the Chesley Judgment for the reasons described above. Chesley does not
know and cannot estimate the amount that remains owed on account of the Chesley Judgment.
Knowing the current amount owed on the Chesley Judgment is important because, inter alia, that
amount is relevant (a) to any consideration by a Kentucky court of requirements that might be
imposed if Chesley seeks a stay of enforcement of the Chesley Judgment while his Kentucky
appeal is pending and (b) to limitations this Court might impose on Ford to insure that her
collection efforts do not attach assets in excess of the amount truly owed on the Chesley
Judgment.
Ford's refusal to disclose the current total amount of the Chesley Judgment may
successful. Thereafter, any collection activity by Ford against Chesley will have to be reversed
including the return of assets to innocent third parties from whom Ford may seize assets. The
temporary loss of seized assets may cause significant harm to the innocent third-parties who are
the subject ofFord's collection activity.
WHEREFORE, Petitioner Stanley M. Chesley prays that the COUlt:
A.
Declare that before Respondents take any action in the State of Ohio to enforce
the Chesley Judgment, Petitioner Stanley M. Chesley is entitled) at a minimum, to know and that
11
IFI / A 1500067
Respondent
disclose to this COUlt and Chesley (i) the name, address and
current judgment
owed on the Chesley Judgment in the unexpected event the Chesley Judgment is affirmed;
B.
Declare
Respondent
that Petitioner
Stanley
M. Chesley
is entitled
to know
and that
assets seized under the authority of the Criminal Defendants Judgment, any assets forfeited in the
Criminal Case and any restitution paid in the Criminal Case, (ii) when any assets were seized or
forfeited
Ford's pre-judgment
and post-judgment
interest calculations,
and not distributed to her clients, and (iv) the total amount distributed to each of the Unknown
Respondents
in both the Settled Case and the Abbott Case, after reduction for Ford's 40% fees
Enjoin Respondent
Judgment
Respondents
Respondents
in the State of Ohio until 90 days after Chesley has received all of the
Enjoin Respondent
Respondents
Respondents
from registering
or domesticating
the
Chesley Judgment in Ohio and attempting to issue subpoenas or any other discovery to parties in
Ohio, except for Chesley, until 90 days after Chesley has received all of the information that this
COUlt declares Chesley is entitled to receive; and
E.
Enjoin Respondent
Respondents
12
1 IFI 1 A 1500067
herewith, Chesley submits that this relief is required due to Ford's demonstrated
efforts to hide
Relief (the "Petition"); (3) I am the judgment debtor who is the target of the Chesley Judgment
described in the Petition, (4) to the best of my knowledge and belief, the facts set out ill the
.... '}
M. Chesley who
i
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My~~oo.162019
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My commission expires on
SIGNATURE AND APPEARANC]j~ OF PETITIONER'S COUNSEL
Respectfully submitted,
&'!!) vd
VlllRllel'(t1)tbt.(nw.<;9
el'({k'lH?_t!m:':(,.c.9m
jl1
13
1 IFI 1 A 1500067
..",
,~t~!:k:z'/{'>/c/
EXHIBIT
'"10
d
;z
t3
E>
J'l
iii
Page I
Lexist-lexis"
I"
Analysis
As of: Feb 12,2015
KENTUCKY
BAR ASSOCIATION,
MOVANT
RESPONDENT
v. STANLEY
M. CHESLEY,
2011-SC-000382-KB
SUPREMI~
COURT OF KENTUCKY
March 21,2013,
SUBSEQUENT
HISTORY:
PROCEDURAL
POSTURE:
Movant
Board of
Governors of the Kentucky Sal' Association (Soard)
alleged respondent attorney's professional misconduct.
The Board adopted a trial commissioner's findings that
Ky. Sup. Ct. R. 3.130-1.5(a), 3.1301.5(c), 3. 130I.5(e),
3.130-1.7,
3.130-1.8(g),
3.130-3.3(a),
3.130-8.1(a),
3.130-8.3(c), and 3.130-5.1(c)(I)
were violated, and
recommended permanent disbarment and restitution. The
attorney filed a notice of review.
Entered
OUTCOME:
LexisNexis(R)
Headnntes
disbarred
Page 2
393 S.W.3d 584. *; 2013 Ky. LEXIS 44. **
Ethics
>
Client
Relations
>
Fee
that
and
any
Effective
(~rInterest
for
or
or
of
Representatton
[HNTJ Lawyers arc free to divide among themselves the
work required to successfully prosecute the claims of
their clients, but they I1lUY not delegate their ethical
responsibilities to another.
Legal Ethics> Professional Conduct> Tribunals
[HN8] See Ky. Sup. Ct. R. 3. 130-3.3(a).
Page 3
393 S.W.3d 584, ": 2013 Ky. LEXIS 44, **
of
or
an
the
and
and
the
in
Page 4
393 S,W.3d 584, *586; 2013 Ky, LEXIS44,
BACKGROUND
**2
Page 5
393 S.W Jd 584, *5S7; 2013 Ky. LEX IS 44, **6
Page 6
393 S.W.3d 584, *589; 2013 Ky. LEXIS 44, **10
4
Mills, who did not attend the mediation
conference, and by his own admission was drunk
during much of the relevant time period, was told
by his co-counsel that the case settled for $150
million, not $200 million.
American Home left it for the plaintiffs' attorneys to
determine how much of the settlement fund to allocate to
each of their clients. However, under the terms of the
agreement, plaintiffs' counsel had to provide American
Home with a schedule listing each of the settling clients
and how much of the settlement money would be
allocated [** II) to each client. A signed release from
each client was also required. The agreement also
provided that the settlement would not take effect unless
plaintiffs' counsel obtained a speci fie number of signed
client releases before a specified deadline. Two
preconditions of the agreement required approval of the
Boone Circuit Court. First, the class action could be
decertified only by court order. Second, the claims of the
individual Guard clients could not be dismissed with
prejudice without court approval.
The settlement agreement also incorporated a "side
letter" which outlined an agreement by which the
plaintiffs' attorneys agreed to indemnify American Home
up to a total of $7.5 million for any new fen-phon claims
that might arise from individuals who were eligible to be
members of the decertified class. In other words. $7.5
million of the aggregate settlement would have to be
reserved to cover potential claims, at least until the
applicable statute of limitations brought the subject to
repose. Thereafter, any part of the reserve remaining
would be subject to disposition by order of the court.
On May 9, 2001, Respondent, along with Gallion,
Helmers, Cunningham, and David Schaefer, an attorney
[* * 12) for American Home Products, appeared before the
presiding judge, Joseph Bamberger, and tendered for his
consideration the "Order Decertifying the Class and
Dismissing Action" as required by the settlement. Judge
Bamberger expressed concern about decertifying the
class and dismissing the individual claims, especially
when he realized that the settling clients and the members
of the class had not been given notice of the settlement 01'
of the impending dismissal of their claims. Respondent
carefully explained to the judge that the settlement
resolved only the claims of the client group (the 431); the
claims of the members of the decertified class were
dismissed without prejudice and they would have other
393
Page 7
LEXIS 44, **14
Page 8
393 S, W,3d 584, *591; 2013 Ky, LEXIS
investigations
were beginning
to gather steam, was to
cover the fee distribution
with a thin veil of legitimacy,
and to create a legitimate-looking
repository
in the form
of a charitable
trust in which to place the undistributed
money,
On February
II, 2002, the Inquiry Commission of
the Kentucky Bar Association issued the requested
subpoenas for bank records and other documents relating
to the disbursement of the Guard case settlement money,
That same afternoon, five wire transfers totaling some
[** 19] $59 million were made by Gallion and
Cunningham
from several personal accounts to an
out-of-state bank account owned jointly by Gallion,
Cunningham, and Mills,
44, ** 18
Respondents
21% share
$14,031,500.00,
of that
fee
would
equal
9
We decline to calculate the effective
cumulative
percentage
derived
from slight
variations in rates charged by the three attorneys:
Mills at 30%, Cunningham at 33%, and Gallion
33 1/3%,
Stuart, in his continuing effort (0 discover the extent
of Mills' wrongful diversion of law firm funds, sought
and obtained a commission from the Fayette Circuit
Court authorizing
the out-of-state
deposition
of
Respondent, an Ohio resident, Before the deposition was
taken, however, Stuart and Mills were ordered to attempt
to settle their dispute by mediation. Respondent sent
word through a Mills-employee
[**21] attending the
mediation conference that, if the settlement talks stalled,
he would be willing to contribute money to get (he case
resolved. Initially, the mediation was unsuccessful
because Stuart would not accept the highest amount Mills
would offer. Respondent, who was not a party to the
Stuart-Mills
lawsuit, then agreed to sweeten the
settlement pot by the sum of $500,000,00 to get the case
settled and avoid his pending deposition. With that
inducement,
Stuart
settled.
Later, Gallion
and
Cunningham reimbursed Respondent $250,000,00, as
their contribution to the Stuart-Mills settlement.
As the
Inquiry
Commission's
investigation
proceeded, Mills hired attorney William E, Johnson to
represent him, Gallion and Cunningham hired Whitney
Wallingford for the same purpose. Respondent, who at
the time was not subject to a Kentucky bar disciplinary
inquiry, attended a meeting with Mills, Gallion, and
Cunningham, and their respective attorneys. At the
meeting, Respondent urged all of the attorneys then
subject to the KBA investigation
to agree upon
representation
by the same counsel. As a result,
Wallingford agreed to withdraw as counsel for Gallion
and Cunningham, Before he did so, he submitted (**22]
a set of documents
in response to the Inquiry
Commission subpoenas, The response included a client
payment spreadsheet that grossly overstated the amounts
of money that had been paid to the clients, Before filing
the response and the spreadsheet, Wallingford asked
Respondent to review the response and provide input.
Respondent
did so and voiced no disapproval.
Respondent claims he had no way to know that the
spreadsheet was inaccurate,
Page 9
393 S.W.3d 584, *592; 2013 Ky. LEXlS 44, "'*22
fU:SI'ONDENT
Page 10
393 S.W.3d 584, *594; 20]3 Ky. LEXIS 44, >1<>1<25
Page II
393 S.W.3d 584, *595; 20D Ky. LEXIS 44, **29
10 See footnote 9.
[*596) [HN2] An attorney's fee in a contingency fee
case that so grossly exceeds the fee provided for in the
fee agreement is unreasonable per se, Respondent's fcc
was subject to the limitations of the contingent fee
agreements so we conclude that he violated SCR
3.130-1.5(a). Moreover, even without the fcc contracts
with the clients, as shown above, the 49% fee was
unreasonable and Respondent's $20 million share of it
taken without notice to the client was unreasonable, and
constitutes a violation of SCR 3. I30- I .5(a).
B. SCR 3.130-1.S(c),
SCR 3.130-I.5(c)
Respondent
was a signatory
to a fee
Page 12
393 S.W,Jd 584, *596; 2013 Ky. LEXIS 44, **33
notice to clients.
Accordingly, we conclude that Respondent
SCR 3. 130-1.5(e).
violated
Page 13
393 S.W.3d 584, *59S; 2013 Ky. LEXIS 44, **36
that Respondent
violated
SCR
E. SCR 3.1303.3(a)
SCR 3.130-3.3(a) provides in pertinent part:
[lINS) [a] lawyer shall not knowingly:
(I) make a false statement of material fact
or law to a tribunal; (2) Fail to disclose a
material fact to the tribunal when
disclosure is necessary to avoid a fraud
being perpetrated upon the tribunal ...
SCR
Page 14
393 S.W.3d 584. *599; 2013 Ky. LEXIS 44, "*40
material fact.
is therefore
guilty of violating
SCR
Respondent
complains
that this charge lacks
specificity. Based upon our review of the record, we
agree with the Trial Commissioner's assessment. The vast
amount of evidence compiled and presented in this matter
demonstrates
convincingly
that Respondent
[* *42J
knowingly participated in a scheme to skim millions of
dollars in excess attorney's fees from unknowing clients.
He may have kept himself at aim's length from Mills,
Page 15
393 S,W.3d
evidence
did not indicate he had a special relationship
with either Mills or Stuart that would explain his strong
concern about their disagreement,
yet he met with Mills
to l**44) encourage him to settle the lawsuit with Stuart.
offenses;
Page 16
393 S.W.3d 584, *60 I ~2013 Ky, LEXIS 44, **46
wrongful
of victim;
experience
in
the
to making restitution.
B. Payment of Restitution
The Trial Commissioner and the Board of Governors
requested that we order Respondent to pay over $7
million in restitution to the Guard case clients. We
decline to do so. We agree with Respondent's argument
that [!-IN 17] our Supreme Court Rules do not allow for us
to order restitution when a disciplinary action leads to a
permanent disbarment. SCR 3.380 in pertinent part states:
[HN 18J "discipline may be administered by way of a
private [**49] reprimand, suspension from practice for a
definite time with or without conditions as the Court may
impose, or permanent disbarment," [HN 19J The plain
language of the rule indicates that while this Court may
order an attorney disciplined by either a temporary
suspension from the practice of law, public reprimand, or
private reprimand to comply with any conditions imposed
by the Court, a permanent disbarment stands alone -separated from the language allowing us to impose
conditions by the word "or."
A disbarred attorney is no longer a member of the
Kentucky Bar Association and no longer subject to our
direct supervision. Moreover, the affected clients have
brought a civil action to recover any appropriate damages
they sustained, and the determination of their remedy is
more appropriately addressed in that forum.
Thus it is ORDERED
that:
Page 17
393 S. W.3d 584, *602; 20 13 Ky. LEXIS 44, **50
CHIEF JUSTICE
EXHIBIT
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EXHIBIT
PLAINTIFFS
v.
STANIJEY M. CHKSLEY, ct al,
DEFENDANTS
The Court held Chesley jointly and severally liable, as a matter of law under a
joint enterprise
Gallion, or Mills." Abbott v. Chesley, 413 S.W,3d 589, 604"05 (Ky. 2013); and
(2)
The Court concluded that Chesley had a full and fair opportunity to litigate the
issues before the KBA Trial Commissioner,
Chesley was not permitted to take discovery in connection with that proceeding,
Pursuant to CR 54,02, which provides that such an interlocutory order is "subject to revision at
any time," and the Court's inherent authority to reconsider its interlocutory rulings, Mr. Chesley
requests that the Court alter, amend, or vacate the August 1,2014 Order,
Argument
I.
The Court's application of joint and several liability against Chesley, as a matter
of law, is erroneous because disputed issues of material fact remain as to the
allegation that Chesley was a "full partner" in the "enterprise" among
Cunningham, Gallion, and Mills.
A. The Court's ruling extends the Kentucky Supreme Court's opinion in this
case, without any new evidence.
This Court's holding that Chesley is jointly and severally liable with Cunningham,
Gallion, and Mills under a theory of joint enterprise is an extension of the Kentucky Supreme
Court's opinion in Abbott v. Chesley, 413 S.W,Jd 589 (Ky. 2013). Indeed, this Court's Order
does not even mention the part of that opinion in which the Supreme Court specifically declined
to extend joint enterprise liability to Chesley because his role in the alleged enterprise was
indisputably different than the others:
Chesley's role in the enterprise clearly differed from that of Cunningham,
Gallion, or Mills, The agreement itself seems to treat him differently, For
example, the agreement provided that Chesley and Richard D, Lawrence would
have "no responsibility for [the] timely filing .., of any complaints" and that CGM
would "indemnify them from such responsibility," Whether the differences prove
to be material is a matter that can only be determined as the case against him
proceeds in the trial COUlt.
Jd. at 604-05,
The Supreme Court issued its opinion in Abbott more than five months after its
ruling in the disciplinary action against Chesley, so it was fully aware of the factual findings
upon which Plaintiffs'
developed in the trial court before joint enterprise liability could be imposed against him,
No depositions have been taken in this case since the Supreme Court issued its opinion
and Plaintiffs have submitted no evidence in support of their motion for summary judgment,
It
was thus improper for this Court - with the same factual record before it and without any
additional evidence - to do what the Kentucky Supreme Court was unwilling to do and hold
Chesley jointly and severally liable us a matter of law,
B. Genuine issues of material fact remain regarding Chesley's role.
Summary judgment on the issue of joint and several liability is not appropriate because
there are genuine issues of material fact as to whether Chesley was an equal partner in Gallion,
Cunningham, and Mills' joint venture,
affidavits, if any, show that there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law," CR 56,03, "The record must be viewed in a
light most favorable to the party opposing the motion for summary judgment and aJl doubts are
to be resolved in his favor,"
(Ky. 1991), The record in this case - while fur from being fully developed - remains disputed
with respect to Chesley's
among Gallion,
Ky. Bar Ass'n v. Chesley, 393 S. W.3d 584, 590 (Ky. 2013).1
supported
by testimony
For example,
Rebecca
Mills who met with over 130 clients to secure releases - testified
Chesley
"settle"
the individual
Chesley
claims
instructed
money,
meeting
These
statements
are amply
Phipps - an employee
of
with clients,
Helmers
or raising
testified
that Mr.
offers to objecting
--_._----) The United States Attorney consistently recognized that Chesley was not a part in Gallion, Cunningham,
and Mills' conspiracy to defraud their clients. For example, in a brief filed in Gallion and Cunningham's
appeals of their criminal convictions to the Sixth Circuit, the United States stated:
...
the evidence showed that he did not advise the defendants to engage in their
misconduct. Chesley did not advise Gallion and Cunningham regarding what to tell their
clients, nor did he tell them to withhold from their clients the amount of settlement, the
number of others taking from the settlement, and the 95 per cent agreement provision.
He did not advise them regarding how to determine the individual settlement amounts, or
to conceal the terms of the side letter'. He did not advise them regarding how to calculate
the attorneys' fees or what type of accounts to use in handling the funds, nor did he tell
them they should take their contingency fees off the total settlement amount and then go
back to the court and ask for more. He did not tell them they could put money in out-ofstate accounts without their clients' consent. And he did not tell them they could use the
money in the escrow account to buy vehicles and pay their employees ....
Brief of the Plaintiff-Appellee United States, p. 31, fn 7, United States v. Shirley Cunningham,Jr. and
William Gallion, Nos. 09-5987, 09-5998, On Appeal from The United States District Court for the
Eastern District of Kentucky, D,C. No. 2:07-CR-0039-DCR (Hen. Danny C. Reeves, D,J.). During the
course of Gallion and Cunningham's second criminal trial, United States District Court Judge Danny C,
Reeves stated that he believed the evidence shows Chesley was not in on the conspiracy among the other
lawyer's:
In relation to Mr. Chesley's testimony, there's no indication - first of all, he wasn't
advised of how these clients or how much fees were actually being paid to the clients, his
agreement with the attorneys was to split and to obtain a percentage of the total fees.
There's no indication, at this point, that Mr. Chesley was aware of what the defendants
were up to in terms of taking fees in this case,
Transcript in United Stales v. Gallion, No 2:07-CR-0039 (DCR),
2 Eg. Ky. Bar Ass 'n v, Chesley, Tr, I, Hamm, 'pp. J 006-08; Tr, II, Hamrn, pp, 203-06; Tr. II, Phipps, pp,
53-54, 59, 103-04, 112-14; '1'1'. II, Helmers, pp, 382-84, 387-88. "'1'1', J" refers (0 testimony from the
hearing conducted on November 15-16, 2009; "'1'1'. JI" refers to testimony from the hearing conducted on
September 13-24, 2010. Copies of the foregoing excerpts have been separately flied with the Court with
a Notice of Filing.
J TI', II, Phipps, pp. 5)54
1 Tr, II, Hel mel'S, pp, 382-84,
association with, or control over, the escrow accounts from which the settlement funds were
distributed.'
To the extent Chesley became co-counsel by virtue of the fee-sharing agreement, the
nature of the engagement clearly changed once the settlement with American Home Products
("AHP") was negotiated.
Only
Gallion, Cunningham, Mills, and Richard Lawrence signed the Settlement Agreement and were
identified in the Agreement as the "Settling Attorneys."
allocating the settlement funds among the claimants, providing appropriate medical records to
AHP, obtaining releases and dismissals from the claimants, and to take all other necessary steps
to effectuate the settlement.
automatically make him a joint venturer in the other lawyers' collaboration (and conspiracy) in
connection
responsibilities
of the settlement
funds.
Regardless
of any ethical
Chesley may have had as a lawyer, there is significant evidence that he did not
share the "common purpose" undertaken by the lawyers involved in the distribution of funds and
did not have an equal right to a voice in the direction of the enterprise.
It was thus error for this Court to find as facts that "Chesley shared the common purpose
to be carried [out] with Gallion, Cunningham and Mills" and that "Chesley maintained a voice in
the managerial control of the enterprise."
the ethics proceeding and thus cannot support judgment by collateral estoppel.
See Miller v.
Admin. Office 0,[ Courts, 361 S.W.3d 867, 872 (Ky. 201 I) (for issue preclusion to apply, "the
issue in the second case must be the same as the issue in the first case" and must have been
"actually decided in that action").
motion for summary judgment.
Murphy, 52 S. W.3d 540, 545 (Ky. 200 I). The foregoing evidence shows that there remain
disputed issues of fact regarding Chesley'S alleged role in the "joint enterprise" that preclude
summary judgment on the issue of whether Chesley can be held jointly and severally liable for
the other attorneys' conduct in which he took no part.
II.
Chesley was not permitted to take discovery in the ethics proceeding and thus
did not have It "full and fair opportunity to litigate the Issues," as Is required for
issue preclusion to apply.
.
In its August
lSI
Order this Court held - for the first time in Kentucky history - that
proceeding
conclusively
issue preclusion cannot be applied in this case because Chesley was not permitted to take prehearing discovery in the ethics case - a fact the Court seemingly overlooks in its Order. Under
black letter law, even where the issues decided in an earlier proceeding are identical? to the
issues to be decided in a later action, issue preclusion "applies only if the party against whom it
is sought to be applied had a realistically full and fair opportunity
----_._-_._--Chesley disagrees that the issues addressed in the ethics proceeding are the same as the issues raised by
Plaintiffs' breach of fiduciary duty claims, The Kentucky Rules of Professional Conduct explicitly state
that they are "not designed to be a basis for civil liability" and that violation of the ethics rules "should
not itself give rise to a cause of action against a lawyer nor should it create any presumption in such a
case that a legal duty has been breached." SCR 3,130 (XXI). Nevertheless, this motion is not directed at
that question, but whether - assuming the issues are identical- Chesley had a full and fail' opportunity to
litigate the issues in the ethics proceeding.
6
7
The question is not whether the ethics proceeding was "fair" in its own context; lawyer
disciplinary proceedings are subject to unique procedures and serve a different purpose than civil
trials. That is why the Rules of Professional Conduct expressly say that they cannot form the
basis for civil liability. SCR 3.130 (XXI). Rather, the question is whether Chesley had sufficient
ability to litigate the issues in the ethics proceeding such that it is appropriate to adopt the
findings from the ethics proceedings as conclusively determined facts in this civil action. A civil
litigant's right and ability to obtain discovery is fundamental to the concept of a fair trial. That
notion is also reflected in the general rule that summary judgment is not to be granted against a
party who has not had ample time to complete discovery. Here - where Chesley has not had the
benefit of discovery in either case - it cannot be said that he had a full and fail' opportunity to
litigate the issues, and summary judgment is premature.
It is axiomatic that in order to have a full and fair opportunity to litigate an issue, a party
must be given the opportunity to conduct discovery relating to that issue. A party's opportunity
and ability to gather evidence, to depose witnesses, and to obtain relevant documentary evidence
are essential to the concept of fairness in litigation.
pretrial discovery "helps to achieve a balanced search for the truth, which in turn helps to ensure
that trials are fair ...." LaFleur v. Shoney's, Inc., 83 S.W.3d 474,478 (Ky. 2002).
In the ethics proceeding, Chesley was denied the opportunity to conduct discovery. He
was not permitted to depose witnesses prior to their hearing testimony.
serve requests for documents.
witnesses ...- could not be obtained because their criminal cases were still pending and they
invoked their Fifth Amendment rights." Now that their appeals are finished, those witnesses can
no longer refuse to testify, and can now be deposed.
In its Order, the Court concludes that "Chesley had a realistically full and fair opportunity
to present his case before the Trial Commissioner"
exhibits presented in connection with the hearing. (Order at 4.) But the great majority of those
witnesses were called by the KBA and Chesley was not given an opportunity to depose any of
them prior to the hearing."
the hearing does not indicate that Chesley had a full and fair opportunity to litigate when he was
unable to conduct document discovery.
Chesley has also been denied a full and fail' opportunity to take discovery in this case.
Discovery in this case was stayed for several years during the pendency of appeals.
i
Chesley,
having been denied discovery in the ethics proceeding, asked the Court to lift the discovery stay
in this action, but the Court denied his motion.
(Apr. 26, 2012).)
837, 841 -42 (Ky. App. 2007) (Summary judgment "is proper only after the party opposing the
motion has been given ample opportunity to complete discovery ...."). The Court's present Order
runs contrary to that rule by grunting summary judgment to Plaintiffs based on findings in a
separate case in which Chesley had no ability to obtain discovery.
Conclusion
The issue of whether Chesley can be held jointly and severally liable as a matter of law
based on a "joint enterprise" theory ~ which was in no way addressed in the ethics proceeding Chesley unsuccessfully sought to postpone the disciplinary proceedings on that basis.
Of' the 29 witnesses who testified live at the hearing (not including Chesley), 23 were called by the KBA
and Chesley did not have an opportunity to depose them.
8
9
its holding
Chesley's
role differed
fact regarding
Gallion,
the allegation
that
is inappropriate.
preheari ng discovery
it recognized
issues of material
amend,
issue preclusion
Chesley
respectfully
requests
and alter,
Sheryl G
Griffi
rr
imner (KBA No. 85799)
FROSTBROWNTODDLLC
400 West Market Street, 320d Floor
Louisville, KY 40202
Phone: (502) 589-5400
Fax: (502) 581-1087
Frank V. Benton, IV (KBA No. 04705)
BENTON,BENTON& LUEDEKE
528 Overton Street
P.O. Box 72218
Newport, KY 41072-0218
Phone: (859) 29 J -0500
Fax: (859) 291-4050
Counsel for Defendant Stanley M Chesley
CERTIFICATE
OF SERVICE
It is hereby certified that a copy of the foregoing has been served via U,S, Mail (unless
otherwise indicated) this 11th day of August, 2014 on:
Via electronic and U,S Mail
mnfru:9@_wjlldstream,-l}~l
Angela M, Ford
Chevy Chase Plaza
836 Eucl id Avenue, Suite 311
Lexington, KY 40502
Mitzy 1. Evans
Evans Law Office
177 South Main Street
r.o. Box 608
Versailles, KY 40383
William T, Ramsey
Neal & Harwell, PLC
150 Fourth Avenue North, Suite 2000
Nashville, TN 37219
r.o. Box
Michael R, Dowling
1689
Ashland, KY 41105-1689
Mary 12,Meade-Mckenzie
105 Seahawk Drive
Midway, KY 40347
C:IUscrs114J 14\AppPHt~ILoc~IIMicrosoft\Windows\TemporHry
Vacate Order Granting Partial Slim mary (2).docvl
Internet PileslContent.OutJooklT2K7TIlB5lChesley
.
10
PLAINTIFFS
v,
DEFENDANTS
The Plaintiffs in this action, however, have been inconsistently identified in the record,
::wll lhnl
judgment to be effective.
01'
precise amount awarded to each individual Plaintiff. Chesley respectfully requests that the Court
clarify the judgment by requiring Plaintiffs' counsel to file in the court record a definitive list
identifying, by first and last name, and by capacity (whether individual or representative), the
"III'IL:111
parties
plaintiff in this action and, for each Plaintiff, their individual share of the $42
million judgment.
"A judgment
record
01'
as to the
\I,
S,W.251
(190~) ("In speci tying the relief granted, the parties of and for whom it is given must, of course,
be sufficiently identified.") (citation omitted),
This case was initially filed as a putative class action on behalf of "all individuals who
were prescribed the diet drug Fen-Phon in Kentucky and were members of the class action filed
in Boone County, Kentucky...
named Plaintiffs (although only 36 were specifically described in the body of the Complaint).
Over the course of this action, Plaintiffs'
named Plaintiffs to the case,
Complaint, which removed all references to class allegations and class certification so that it
sltlkd only individual
individuals as Plaintiffs, plus one name that appears in the caption only as "Jones,"
"Revised
Summary
of Misappropriated
Settlement
lists 418
Plaintiffs'
Fees," filed in
connection with the Eighth Amended Complaint, lists the Guard settlement funds received by
only 416 individuals."
Including the various Complaints,
Court of Appeals, and Plaintiffs'
Plaintiffs'
Notice of Cross-Appeal
to the Kentucky
Court, Plaintiffs' counsel appears to have identified 463 separate individuals as Plaintiffs in this
action.' The Guard settlement included 431 individual plaintiffs." On the current record, there is
no way to reliably identify which of those individuals (or their representatives)
are currently
19,2014 judgment,
In the
u.s., 351
Ilatahley v.
U.S. 173, 182 (1956) (in action by 30 plaintiffs for loss of horses, trial court's "lump
was inadequate
for appellate
for
class action; the Plaintiffs have only individual claims. The Court's judgment does not specify
the amount awarded to each Plaintiff and (here is insufficient information
which to determine (hose amounts.
Judge Wehr as a "baseline"
Furthermore,
of the percentages
or amounts
remaining
Accordingly,
Chesley respectfully requests that the Court enter the attached Order,
requiring Plaintiffs to file a Designation of Parties Plaintiff that specifically identifies, by first
and last name, and by capacity (whether individual or representative), each and every person
represented as a Plaintiff in this action and whose claims are included within the Court's
September 19, 2014 judgment, and further identifies, for each Plaintiff, the portion of the $42
million award that relates to their individual claim,
Respectfully submitted,
7~~
---''------~.
~7t1,,-;?
:33C.--' ____.,._-----_
Newport, KY 41072-0218
Phone: (859) 291-0500
Fax: (859) 29J -4050
Counsel for Defendant Stanley M Chesley
CERTIFICATE
OF SERVICE
It is hereby certified that a copy of the foregoing has been served via U.S. Mail (unless
otherwise indicated) this b9~lay of October, 2014 on:
Via electronic and U.S Mail
amfor9_@!yjJ!.Qstl'e~m~l1et
Angela M. Ford
Chevy Chase Plaza
836 Euclid Avenue, Suite 311
Lexington, KY 40502
Mitey L. Evans
Evans Law Office
177 South Main Street
P,O. Box 608
Versailles, KY 40383
Michael R. Dowling
P.O. Box 1689
Ashland, K Y 41105 1689
William T. Ramsey
Neal &, Harwell, PLe
150 Fourth Avenue North, Suite 2000
Nashvi lie, TN 37219
Mary E. Meade-Mckenzie
105 Seahawk Drive
Midway, KY 40347
'2atA
~~'J
APPENDIX A
List of individuals Identified, at various times, as Plaintiffs in Abbott v. Chesley
J
Mildred Abbott
Barbara Abel
Elizabeth Abney
Lis" Abraham
Pamela Abrams
6,
Elizabeth Adams
7,
Kathy Adams
8,
Phyllis Adams
9,
Ruby Adams
10,
Ruby Adamson
1 I,
~;l1S"11Adkins
12,
Clantha Akers
13,
Effie Alsip
14,
Juanita Alton
15,
Joann Alvey
16,
Phyllis Applegate
17,
Cindy Armstrong
18,
Susan Arvin
19,
Clara Atkinson
:'0.
Karen Austin
:' 1
Linda flack
.2'2.
Jamie Bailey
23,
Mary Ann Bailey
24,
Vicki Bailey
25,
Charlotte Baker
26,
Charlotte Bakel' and David Walker on behalf of the Estate of Lane Walker
27.
Jody Baldridge
28.
Carla Baldwin
29,
Sarah Balenovich on behalf of the Estate of Edith Browning
30.
Carol Barnes on behalf of the Estate of Danny Abney
:11.
Muri 1>'11Barnes
01:>. Lee Bartley, Jr.
:no Teresa Baumgardener
34.
Debra Bays-Plybon
35,
Melissa Faye Beamon
36.
Linda Beggs
37,
Patricia Belcher
1,
2,
3,
4,
5,
I Derived from Plaintiffs' Complaint (Dec, 30, 2004), Fourth Amended Complaint (Dec. 4, 2006),
Seventh Amended Complaint (Aug. 3, 2007), Eighth Amended Complaint (Aug. 14, 2007), Notice of
CIOS:;-/\ppCII J (Oct. 23, 2007), (til d Motion for Discretionary Review (May 20, 2011),
38.
39.
40.
41.
42.
Lcisa Belding
Eleanor Berry
Margie Berry
Margaret Bingham
Eastcr Bishop
43.
Emma Black
Janice Blair
Sharon Blair
Carol Boggs
Lori Boone
Joic Botkins
Kathy Bowling
Angie Lynn Bowman
Virginia Braden
Ladonna Brame
James Branham
Kathy Branham
Ruby Branham
Brenda Bray
Norma Brewer
Vicki Brewer
Alma Brock
Glenna Brock-Powell
Peggy Broughton
Barbara Brown
Joyce Brown
Karen Brown
Sharon Brown
Deborah Browning
Nathaniel Brumfield on behalf of the Estate of Wathalee Brumfield
Billic Brumley
Linda Brumley
Kimberly Brummett
Teresa Bruner
Patricia Bryant
Christina Bucher
Leslie Bullock
Judy Bundy
Warren Burgess
Janice Burton
Tina Bush
Sherrie Butler
Donna Campbell
Loretta Canada (aka Loretta Campbell)
Buel Cantrell
Linda Carr
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
5'1.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
'I'd.
79.
80.
81.
82.
83.
84,
85,
86.
87.
88,
89,
90,
91.
92,
93.
94.
95.
96.
97.
98.
99.
100.
101.
102.
103.
104,
105.
IO().
IO?
108.
109.
110.
Ill.
112.
113.
114.
115.
116.
117.
118,
119.
120.
121.
122,
123,
124.
125.
126.
127.
128,
129.
Tonya Carter
Wallace Carter
Charlotte Cason
Lisa Caudill
Connie Sue Centers
Tony Childress
Gloria Clark
William Clark
Rosemary Click
Pamela Clift
Danielle Clore
Allen Coker
Judy Coleman
Shirley Coleman
Tara Coleman
Debra Collier
Margaret Collier
Opal Collins
Linda Colvin
Phyllis Combs
Carolyn Conley
James Cook
Ronnie Cook
.1 anct Coons-Greene
Georgia Coots
Mark Cornn
Sandra Cotton Gilley
Nadine Couch
Jo Ann Cox
Barbara Crain
Doris Creech
Deloris Criswell
Pamela Crowe
Joseph Crowley
Tracy Curtis
Doris Dabney
Darby Daniels
Kathy Daniels- Stephenson
Mary Daughtery
Betty Davidson on behalf ofthe Estate of Evelyn Jackson
Ginger Davidson-Gibson
Elizabeth Davis
Sandra Davis
Karen Dean
Bobbie Deaton
Jan Delaney
3
130,
131,
132,
133,
134,
135,
136,
137,
138,
139,
140,
141 ,
142,
Regina Despain
Judy Dile
GelTYDixon
Al Doser
Belva Dotson
Teresa Duff
Linda Dunaway
Ynetta Eckert
Taml Edwards-Engle
Martha Elliot
Saundra Erp
Charlotte Estepp
Sarah Estes
143,
Susan Ezell
144,
Elizabeth Fannin
Janet Fentress
Haywood Ferguson on behalf of the Estate of Alma Ferguson
William Fitch on behalf of the Estate of Sheila Fitch
Vickie Flannery
Paul Floyd
Bernita Flynn
Rhonda Flynn Osburn
Berenda Ford
145,
146,
147,
148,
149,
150,
151,
152,
15:>,
Rhonda Franklin
154,
Timothy Franklin
Mary Frazier
Essie Fredrick
Freda Frizzell
Beulah Fugate
Clara Fulks
Patricia Gaunce
Barbara Gay
Melissa Gayheart
Ken Gayheart
James Gibson on behalf of the Estate of Jessie Gi bson
Joni Gibson
Tara Gifford
Gladys Gilbert
Stephanie Gist
Ruby Godbey
Eddie Golden
Debra Goode
Joyce Gordon
Patrick Graham
Tammy Grant
Amy Gray (aka Amy Grant)
155,
156,
157,
158,
159,
160,
161,
162,
163,
164,
165,
166,
167,
168,
169,
170,
171 ,
172,
173,
174,
175,
176.
177.
178.
179.
180,
181,
182,
183,
184,
185,
186,
187,
188,
189,
190,
191,
I
n,
193,
194.
195.
196.
197.
198.
199,
200,
201,
202,
203,
204.
205,
206.
207,
208,
209,
210,
211,
212.
211.
214.
215.
216.
217.
218,
219.
220.
221.
Donna Green
Sherry Green
Peggy Grigsby
Allie Hall
Geraldine Hall
Norma Hall
Renee Hall
Shannon Hall
Barbara Hampton
Rhonda Hancock
Leona Gail Handley
Joyce Hanley
Rebecca Harris
Debra Harrison
Diane Harrison
Joyce Hassler (aka Joy Hassler)
Yolanda Hayden
Barbara Heizer
Barbara Hellmueller
Reva Helton
Wanda Helton
Bonnie Henderson
Gary Hendrickson
Vikki Henley
Vickie Henry
Marcus Highley
Charlene Hill
Karen Hillard
Janice Hilton
Linda Hinkle
Jacqueline Hocker
Owen Holt
Tarni Holt
Myra Hood
Vicky Hood
Lora Hoover
Evelyn Hopkins
Charlene Horn
Mary Horning
Cloyd Hoskins
Linda Hoskins
Marilyn Howard
Mary Howard
Toloria Howard
Donna Howser
Charlotte Hughes
5
222,
223,
224,
225,
226,
227.
228.
229,
230,
231,
232,
233,
234,
235,
236.
237,
238,
239,
240,
241,
242,
243,
244.
245,
246,
247,
248.
249,
250.
251.
252,
253.
254,
255.
256,
257,
258,
259,
260,
261.
262,
263,
264,
265,
266,
267,
Marcia Hughes
Margie Hulse
Sheila Humpreys
Margaret Hunt
Wanda Hunter
Brenda Hutchcraft
Lorene Hutcherson
Katherine Hutchison
James Ingram
Emma IS011
Della Jackson
Katina Jackson
Mary Jackson
Linda James
Lynn Jefcoat
Debbie Jeffrey
Gamet Johnson
Ernestine Leslie Johnstone (aka Ernestine Leslie Johnston)
Beulah Jones
Franklin Jones
Gerry Jones
Judy Jones
Kathy Jones
Linda Jones
Marlene Jones on behalf of the Estate of Loretta Emond Stidham
Stewart Jones
Troy Jones
Betty Jordan
Betty Kelly
April Keltner Nuxoll
Patricia Kennedy
Gerald King
Katherine King
Pattie Kitts
Betty Kluck
Lucille Krey
Bill Lady on behalf of the Estate of Mary Lady
Linda Larkins
Angela Lewis-Mullinnix
Emily Lewis
Beverly Little
Sandra Dee Littleton
Lois Lockard on behalf of the Estate of Lloyd Lockard
Linda Long
Sherry Long
Kathy Levan-Day
6
314,
315,
3 J 6,
3 J 7,
318,
3 J 9,
320,
321.
322,
323,
324,
325,
326,
327,
328,
329,
330,
331,
332,
333,
334,
335,
336,
337,
33g,
JJl),
340,
341,
342,
343,
344,
345,
346,
347,
Kathy Nolan
Sheila Nolan
Glenora Pace
Bertha Pack
Raymond Parker
Louverna Parks
Myrtle Parris
Jessie Parsons
Angela Peace
Judith Peck Wageman
Lisa Peek (aka Linda Peek)
Recie Pennington
Helen Perkins
Jeff Perkins
Joe Ann Perkins Spencer
Stacy Perkins
Joy Perry on behalf of the Estate of Milton Lewis
Doris Phelps
Norma Pickett
Sonja Pickett
Kathy Pollitte
Brian Powell
Mary P'pool (aka Mary P'poole)
Trona Preston
Suzanne Price
Rita Profitt-Norman
Lynne Pursel
Sharon Rainwater
Billie Reese
Brenda Rentas on behalf of the Estate of Anthony Rentas
Arlie Rhodes
Evelyn Rhodes
Raymond Riley
Levetta Riviera (aka Leveua Rivera)
348,
Odena Roaden
349,
350,
351,
352,
353,
354,
355,
356.
357.
358,
359,
360.
361.
362.
363.
364.
365.
366.
367.
368.
369.
370.
371.
372.
373.
374.
375.
376.
377.
378.
379.
380.
381.
382.
383.
384.
385.
386.
387.
388.
389.
390.
391.
392.
393.
394.
395.
396.
397.
398.
399.
400.
401.
402.
403.
404.
405.
Mary Sarns
Kathy Sands
Justus Scharold
Crystal Seals-Gi bson
Maxine Seals
Claudia Sebastian-Shepard
Lisa Sexton
Monica Sexton
Terry Shanks
Margaret Sharon
Michelle Sharpe Roberts
Debra Shepherd
Janet Short
Linda Caudill on behalf of the Estate of Laureda Short
Monica Shuffett
Loretta Sidwell
Rosemary Simons
Ada Sizemore
April Slatten-Jones
Carole Slone
Barbara Smith
Elaine Smith
Freda Smith
Wesley Smith on behalf of the Estate of Sharon Smith
Peggy Spears
Cora Stapleton
Debbie Staton
Paul Stauffer
Corina Stearn
Connie Stephens
Nancy Stephens
Iva Stevens
Sharon Stevenson
Marlene Stewart
Betty Stone
Lesta Stout
Donna Strornowsky
Connie Sturgill
Shirley Sudduth on behalf of' the Estate of Marjorie Sudduth
Pam Sullivan and Sharon Stephens on behalf of the Estate of Rebecca Lovell
Mildred Swanson
Lisa Swiger
Ella Tackett
Patty Tackett
Priscilla Tafolla
Charles Tapley
9
406.
407.
408.
409.
410.
411.
412.
413.
414.
415.
416.
417.
418.
419.
420.
421.
422.
423.
424.
425.
426.
427.
428.
429.
430.
431.
432.
433.
434,
435,
436,
437,
438,
439.
440.
441.
442.
443.
444.
445.
(ItI6.
447.
448.
449.
450.
451,
Ella Taylor
Linda Taylor
Mary Taylor
Jeanne Thomas (aka Joanna Thomas)
Elizabeth Thompson" Washburn
Karen Thompson McClain
Nancy Thompson
James G. Thurman
Lisa Grant Thurman
Steve Toller on behalf of the Estate of Linda Toler
Roy Toler
Elizabeth Trent
Jenny Trimble
Joetta Tucker
Deborah Turner
Drucilla Turner
Marie Turner
Patricia Turner
Valerie Turner
Linda Vance
Linda Vanarsdall-Collins
Debbie Vogt Schneider
Bobbie Walker
Loraine Wallen
Cindy Walters
Betty Ward on behalf of the Estate of Martin Ward
Wanda Watkins
Cheryl Watson
Irene Wells
Joyce Goff Wells
Judy Whitaker
Kim White
Mary White
Patricia White
Catherine Whitlock
Joyce Whitt
Betty Widner (aka Betty Widener)
Peter Wilds
Carol Quisenberry Williams
Todd Williams on behalf ofthe Estate of Gloria Williams
Bethany Willinger
Geneva Wilson
Robert Wilson
Melody Winer
Connie Wolfe
Bill Wombles
10
452,
4.')],
454,
455,
456,
457.
458.
459,
460,
461.
462,
40],
II
COMMONWEALTH OF KENTUCKY
BOONE CIRCUIT COURT
DIVISION III
CASE NO. 05~CI~436
MILDRED ABBOTT, et III.
v.
STANLEY M. CHESLEY, et al.
DEFENDANTS
OJIDER
This matter having come before the Court on Defendant
("Chesley")
Motion
(0
Stanley
M, Chesley's
or
Parties Plaintiff'
that shall specifically identify - by first and last name, and by capacity
(whether individual or representative) - each and every person represented as a Plaintiff in this
action and, for each Plaintiff so identified,
Designation as provided above, if no other objection is raised, the Court's Amended Order
ClllCl'cd
(0
----_---_.
__ ----
Tendered by:
2~~
~~ Q?-'--'-Sheryl G, Snyder (KBA No, 66290)
Griffin Terry Sumner (KBA No. 85799)
Kendrick Wells IV (KBA No, 90209)
FIWST BROWNTODD LLC
400 West Market Street, 32nd Floor
Louisville, KY 40202
Phone: (502) 589-5400
Fax: (502) 581-1087
,T,
____
CERTIFICATE
OF SERVICE
J hereby certify a copy of the foregoing Order was served by U,S, Mail this
,2014 to the following:
/\lIgclu M, Ford
CIIIO\')' Chase Plaza
oJ0 Uudid Avenue,
Suite 311
Lexington, KY 40502
William T, Ramsey
Neal & Harwell, PLe
150 Fourth Ave, North, Ste. 2000
Nashville, TN 37219
Mary E. Meade-Mckenzie
I ()) Scahawk Drive
fvl i,I\\':IV, J( Y 40347
Mitzy L, Evans
Evans Law Office
177 South Main Street
P.O. Box 608
Versailles, KY 40383
Michael R. Dowling
P.O, Box 1689
Ashland, KY 411051689
Luther C, Conner, Jr.
504 N, Cross Street
P,O, Box 177
Albany, KY 42602
~---
Sheryl G, Snyder
Griffin Terry Sumner
FROSTBROWNTODD LLC
400 West Market Street, 3211d
Floor
Louisville, KY 40202
Frank V, Benton, IV
BENTON,BENTON& LUEDEKE
528 Overton Street
P,O. Box 72218
Newport, K Y 41072-0218
OIISOS7,0571I~S 483~~6879263vl
day of
COMMONWEALTH
OF KENTUCKY
BOONE CIRCUIT COURT
DIVISION III
CASE NO. 05-CI-436
PLAINTIFFS
v.
ST ANLEY M. CHESLEY, et al.
DEFENDANTS
Please take notice that at the Court's regular motion hour on Thursday, November 13,
2014, at 9:00 a.m., or as soon thereafter as counsel may be heard, Defendant Stanley M. Chesley
(i'Cheeley") will present the following Motion for the Court's consideration:
DEFENDANT STANLEY M. CHESLEY'S
MOTION TO VACATE JUDGMENT PURSUANT TO CR 60.02
On October 22,2014, this Court granted Plaintiffs' "Motion to Clarify Prejudgment and
Post Judgment Interest" and entered a "Second Amended Judgment," supplanting the Court's
September 19, 2014 Amended Order. The clerk did not serve Chesley'S counsel (including the
undersigned and his co-counsel, Mr. Benton) with a copy of the Second Amended Judgment.
Chesley'S counsel first learned of the ruling on November 6,2014, upon receiving and reviewing
Plaintiffs' response to Chesley'S motion to clarify the September 19th judgment.
The Second Amended Judgment is void because it does not name the judgment creditors
or the amounts awarded to each Plaintiff ._.and that information cannot be reliably determined
from the current record.
Plaintiffs'
counsel should tender a proposed judgment that provides the identities of the
judgment creditors and the amount awarded to each ....reduced by the amounts already recovered
from Messrs. Gallion, Cunningham and Mills.
I.
CR 60.02 provides that a court may "relieve a party ... from its final judgment, order, or
proceeding ..." for a number of reasons, including when "the judgment is void].]"
As with the
Court's September 19th Amended Order', the Second Amended Judgment is void because it does
not sufficiently identify the persons in whose favor judgment is being entered, nor is it possible
to determine their identities from the record.
"A judgment record or docket should afford definite and reliable information as to the
parties for and against whom the judgments contained in it arc rendered."
46 AM. JUR. 2D
S.W. 251
(1908) ("In specifying the relief granted, the parties of and for whom it is given must, of course,
be sufficiently identified.") (citation omitted).
This case was initially filed as a putative class action on behalf of "all individuals who
were prescribed the diet drug Fen-Phen in Kentucky and were members of a class action filed in
Boone County, Kentucky ... styled Johnetta Moore_,__st.aI, v. A. II. Robins, et. al., 98-CI-795,"
also known as the Guard case.'
named Plaintiffs (although only 36 were specifically described in the body of the Complaint).
Over the course of this action, Plaintiffs'
I See Chesley's
Motion to Clarify Judgment With Respect to Identification of Plaintiffs and Amount
Awarded to Each Plaintiff (Oct. 20, 2014).
2 Pis,' Complaint, ~ 1 (Dec. 30, 2004).
Complaint, which removed all references to class allegations and class certification so that it
stated only individual claims by the named Plaintiffs.'
leave to file an Eighth Amended Complaint."
individuals as Plaintiffs, plus one name that appears in the caption only as "Jones."
"Revised
Summary
of Misappropriated
Settlement
Plaintiffs'
Fees," filed in
connection with the Eighth Amended Complaint, lists the Guard settlement funds received by
only 416 individuals.'
Including the various Complaints, Plaintiffs' Notice of Cross-Appeal
Court of Appeals, and Plaintiff.')' Motion for Discretionary
to the Kentucky
Court, Plaintiffs' counsel appears to have identified 463 separate individuals as Plaintiffs in this
action. The Guard settlement included 431 individual plaintiffs." On the current record, there is
no way to reliably identify which of those individuals (or their representatives)
are currently
Plaintiffs in this action and beneficiaries of the Court's September 19,2014 judgment.
In the
absence of a definitive and reliable identification of the Plaintiffs' identities in the record, the
Court's September 19,2014 judgment is not sufficiently certain to be enforceable.
The judgment is also uncertain as to the amount awarded to each Plaintiff. Hatahley v.
u.,')'" 351 U.S. 173,182 (1956) (in action by 30 plaintiffs for loss of horses, trial court's "lump
was inadequate
for appellate
for
Notice of Filing Revised Summary of Misappropriated Settlement Funds and Attorneys' Fees, Exh. B
"Settlement Funds Analysis" (Aug, 14,2007).
6 Abbott v, Chesley, 413 S.W,3d 589, 596 (Ky. 2013).
5
class action; the Plainti ffs have only individual claims. The Court's judgment docs not specify
the amount awarded to each Plaintiff and there is insufficient information in the record from
which to determine those amounts.
Judge Wehr as a "baseline"
award7
without clarification
of the percentages
or amounts
remaining
judgment.
II.
Alternatively, the Court should vacate and re-enter the Second Amended Judgment
to permit Chesley's counsel to file a Rule 59 motion.
Due to an error by the Court's clerk, Chesley'S counsel did not become aware of the
Second Amended Judgment until more than ten days after its entry. Chesley was thus deprived
of the opportunity to file a motion to vacate the judgment under Rule 59. CR 59.05 ("A motion
to alter or amend a judgment, or to vacate a judgment and enter a new one, shall be served not
later than 10 days after entry of the final judgment").
Court to vacate and re-enter that judgment to afford Chesley the procedural remedies provided
by the civil rules. See Kurtsinger v. Bd. of'Trs. of Ky. Ret, Sys., 90 S.W.3d 454 (Ky. 2002),
In Kurtsinger, the trial court entered summary judgment in favor of the defendants and
the plaintiffs filed a motion to alter, amend or vacate the order under Rule 59. The trial court
denied the motion, but notice of entry of the order was only sent to the defendants and not to the
plaintiffs.
The plaintiffs did not become aware of the ruling until more than 40 days later and,
upon learning of the order, the plaintiffs immediately filed a motion under CR 60,02 requesting
the trial court to vacate the order and reenter it as a new order to permit plaintiffs to file a timely
-----.--------7
..-
notice of appeal from the ruling. The trial court granted the motion and the Kentucky Supreme
Court affirmed, noting that CR 60.02 "is designed to allow trial courts a measure of flexibility to
achieve just results and thereby provides the trial court with extensive power to correct a
judgment."
Id. at 456 (citations and internal quotations omitted). The Supreme Court observed:
"The trial judge clearly believed himself or his office staff (not Appellants) to have been
culpable in the error that prevented Appellants from learning of entry of the June 29 order, and in
our view, CR 60.02 was adopted for such circumstances." let.
Likewise, here, the Court's Second Amended Judgment was not served on Chesley and
Chesley's counsel, through no fault of their own, did not learn of the order until November 6th.
Accordingly, if the Court declines to vacate the Second Amended Judgment for the reasons set
forth above, Chesley requests in the alternative that the Court vacate and reenter the order to
preserve Chesley's right to file a motion under Rule 59.
Respectfully submitted,
&
LUEDEKE
CERTIFICATE
OF SERVICE
It is hereby certified that a copy of the foregoing has been served via U,S, Mail (unless
otherwise indicated) this 10111 day of November, 2014 on:
Mitzy L, Evans
Evans Law Office
177 South Main Street
P,O, Box 608
Versailles, KY 40383
Michael R. Dowling
P,O, Box 1689
Ashland, KY 41105-1689
William T, Ramsey
Neal & Harwell, PLC
150 Fourth Avenue North, Suite 2000
Nashville, TN 37219
Mary E, Meade-Mcxcnzie
105 Seahawk Drive
Midway, KY 40347
COMMONWEALTH OF KENTUCKY
BOONE CIRCUIT COURT
DIVISION III
CASE NO. 05-CI-436
PLAINTIFFS
v.
DEFENDANTS
ORDER
This matter having come before the Court on Defendant
Stanley M. Chesley's
("Chesley") Motion to Vacate Judgment Pursuant to CR 60.02, the Court having considered the
arguments of counsel and being otherwise sufficiently advised:
IT IS HEREBY ORDERED THAT Chesley's Motion is GRANTED.
IT IS FURTHER
ORDERED
:Jr'
Sheryl G.'
del' (KBA o. 66290)
Griffin Terry Sumner ( A No. 85799)
J. Kendrick Wells IV (KBA No. 90209)
FROST BROWN '1'000 LLC
400 West Market Street, 32nd Floor
Louisville, KY 40202
Phone: (502)589-5400
Fax: (502) 581-1087
Frank V. Benton, IV (KBA No, 04705)
BENTON, BENTON
&
LUEDEKE
Mitzy L. Evans
Evans Law Office
177 South Main Street
P.O. Box 608
Versailles, KY 40383
Michael R. Dowling
P.O. Box 1689
Ashland, KY 41105-1689
Luther C. Conner, Jr.
504 N. Cross Street
P.O, Box [77
Albany, KY 42602
Sheryl G, Snyder
Griffin Terry Sumner
LLC
400 West Market Street, 32nd
Floor
Louisville, KY 40202
FROST BROWN TODD
Frank V, Benton, IV
BENTON, BENTON
& LUF.DRKE
O"~O~7.0571'4S
4832]51')'I04v]
day of
'".;
z
El.
2l
iii
EXHIBIT
E-
COMMONWEALTH OF KENTUCKY
BOONE CIRCUIT COURT
DIVISION III
CASE NO. 05-CI-00436
ENTERED
BOONE CIRCUIT/DISTfUCT COURT
OCT 2 2 201~
DIANNE
Y,CLERK
BY:
PLAINTIFFS
V.
DEFENDANTS
This Court conducted a hearing in this matter on July 15,2014 on Plaintiffs' Motion for
Partial Summary Judgment as to Defendant Stanley M. Chesley ("Chesley"). The Plaintiffs were
represented by Hon. Angela Ford. The Defendants were represented by Hon. Sheryl G. Snyder
and Hon. Frank V. Benton, IV. The
Response, Plaintiffs'
Reply, having heard argument from counsel, and being in all ways
D.C.
SCR 3.130-1.5(c) by failing to provide clients with a written statement of the outcome of
the matter, as well as the remittance to the client and the method of its determination.
The
contractual contingency fee contracts for the clients were either for 30% or 33 113%plus expenses
of up to 3%. A 49% contingency fee was actually charged to the clients. Chesley'S contractual
agreement with class counsel was for 21% of fees upon successful settlement of the case, which
should have been $12,941,638.46 and not the $20 million plus he received.
He was paid
Chesley was class counsel pursuant to his agreement with Gallion, Cunningham and
Mills and therefore had the same duties as them with regarding the requirements of SCR 3.130I.S(g).
SCR 3.130-3.3(a) by making a false statement of material fact to the tribunal.
SCR 3.130-S.1 (a) by making a false statement of material fact in connection with a
disciplinary matter.
SCR 3.130-8.3(c) (now SCR 3.130-8.4(c by engaging in conduct involving dishonesty,
fraud, deceit or misrepresentation.
Issue preclusion, also known as collateral estoppel, "allows the use of an earlier judgment
by one not a party to the original action to preclude relitigation of matters litigated in the earlier
action." Miller v. Admin. Office of Courts, 361 S.W.3d 867 (Ky. 2011). A non-party in the former
action may assert res judicata, a close cousin to issue preclusion, against a party to the former
3
action as long as the party against whom res judicata is pleaded had a realistically
opportunity
to present his case. Id. (quoting Moore v. Commonwealth. 94 S.W.2d 317 (Ky. 1997).
Additionally, the Supreme Court has addressed whether administrative agencies acting in a
judicial capacity are entitled to the same res judicata effect as judgments of a court, finding that
they do. Ky. Bar Ass 'n v. Harris. 269 S.W.3d 414 (Ky. 2008).
Chesley's hearing before the Trial Commissioner was held November 5-6 and 12-13,2009
before Judge Rod Messer and continued to September 13-15 and 20-24, 2010 before Judge
William L. Graham. Chesley was represented at various times by Kent Westberry, Esq., James
Gary, Esq., Frank Benton, IV, Esq., Scott Cox, Esq., Mark Miller, Esq., Sheryl Snyder, Esq. and
Hon. Susan OIott. Prior to the hearing, the testimony of five out of state witnesses was provided
by video depositions, including 44 exhibits. During the several days the hearing was held, a total
of 43 witnesses gave testimony either in person or by deposition, with the Trial Commissioner
considering 124 exhibits. Additionally, the Trial Commissioner allowed time for the parties to
submit briefs at the conclusion of the Hearing. The Court finds Chesley had a realistically full
and fair opportunity to present his case before the Trial Commissioner.
Certain elements must be met for issue preclusion to operate as a bar to further litigation:
"(1) at least one party to be bound in the second case must have been a party in the first case; (2)
the issue in the second case must be the same issue as the first case; (3) the issue must have been
actually litigated; (4) the issue was actually decided in that action; and (5) the decision on the
issue in the prior action must have been necessary to the court's judgment and adverse to the party
to be bound." Id. quoting Yeoman v. Commonwealth Health Policy Bd. 983 S.W.2d 459 (Ky.
1998).
The Court finds these elements have been met with regard to Plaintiffs' Motion in this
matter and the findings in KBA v. Chesley. Chesley was a party bound by the KBA matter. The
facts and circumstances at issue in the instant Motion were those at issue in the KBA matter. The
facts and circumstances were litigated in the KBA matter before the Trial Commissioner at a
hearing held November 5-6 and 12-13,2009 and September 13-15 and 20-24,2010, and reviewed
by the Board of Governors and the Supreme Court of Kentucky. The Trial Commissioner made
factual findings and legal conclusions, which were adverse to Chesley, and which were affirmed
by the Board of Governors and the Supreme Court of Kentucky, said facts being those at issue in
the instant Motion. The factual findings and legal conclusions by the Trial Commissioner, the
Board of Governors and the Supreme Court of Kentucky were necessary for the outcome of the
KBA matter.
This Court finds Chesley is bound by the factual findings and legal conclusions in the
KBA matter.
The Supreme Court found that by entering into an agreement with Gallion,
Cunningham and Mills, Chesley signed on as co-counsel and was one of the attorneys
representing the Plaintiffs in the Guard matter.
responsibilities as Gallion, Cunningham and Mills, and the same responsibilities he would have
with any other client. Kentucky Bar Ass'n v. Chesley. Chesley had the duty to know his fee
responsibilities to his clients, specifically that he was to receive no more than 21 % of one-third of
the $200,450,000.00 settlement, $14,031,500.00. ld. Chesley received $20,497,121.81. ld. The
Supreme Court found that Chesley knowingly participated in a scheme to skim millions of dollars
in excess attorney's fees from unknowing clients, and that he received and retained fees that he
knew were improperly taken. ld.
attempted to avoid conversation and correspondence that would expose his knowledge of the
5
exist, and summary judgment is appropriate on Plaintiffs' Breach of Fiduciary claims. Chesley
entered into an attorney-client relationship with the Plaintiffs in Guard. He breached his duty by
accepting excess fees in the amount of $6,465,621.81.
receive only a portion of the settlement monies they were entitled to.
Plaintiffs also asks the Court to order that Chesley is jointly and severally liable with
Gallion, Cunnigham and Mills for the monies owed to Plaintiffs.
Kentucky affirmed Judge Wehr's finding in this matter that Gallion, Cunningham and Mills were
jointly and severally liable to Plaintiffs. The Supreme Court found that Gallion, Cunningham and
Mills breached attorney-client contracts and therefore joint and several liability is not precluded
by KRS 411.182. The Supreme also found that by the manner in which Gallion, Cunnungham
and Mills combined their efforts in the Fen-Phen litigation, they engaged in a joint enterprise, or
joint adventure, an informal partnership existing for a limited purpose and duration, for which
joint and several liability is properly assessed under KRS 362.220. Abbott v. Chesley. 413 S.W.3d
589 (Ky. 2013).
The Supreme Court enumerated the essential elements of a joint enterprise: (I) an
agreement, express or implied, among the members of the group; (2) a common purpose to be
carried out by the group; (3) a community of pecuniary interest in that purpose among the
members; and (4) an equal right to a voice in the direction of the enterprise. [d. citing Huff v.
Rosenberg, Ky., 496 S.W.2d 352 (1973). The Supreme Court adopted the findings of the Trial
Commissioner in KBA v. Chesley, and this Court found above that issue preclusion bars the
further litigation of Plaintiffs' breach of fiduciary duty claims against Chesley.
This Court now finds that no genuine issues of material fact exists, and as a matter of law
Chesley is jointly and severally liable with Gallion, Cunningham and Mills for the $42 million in
damages awarded the Plaintiffs against Gallion, Cunningham and Mills by this Court's Order of
August 7, 2007. Chesley signed on as co-counsel representing the Plaintiffs in the Guard matter
when he entered into his fee-division contract with Gallion, Cunningham and Mills. Chesley
shared the common purpose to be carried with Gallion, Cunningham and Mills. They agreed on
how they would share the work and how they would share the profits.
Chesley maintained a
voice in the managerial control of the enterprise. The Court therefore finds that pursuant to KRS
362.220, Chesley is jointly and severally with Gallion, Cunningham and Mills for the damages
the Plaintiffs suffered.
THEREFORE,
for Partial Summary Judgment is GRANTED as to Plaintiffs' Breach of Fiduciary claims against
Stanley M. Chesley.
IT IS FURTHER HEREBY ORDERED AND ADJUDGED that Stanley M. Chesley is
jointly and severally liable with Defendants William 1. Gallion, Shirley Allen Cunningham, Jr.
and Melbourne Mills, Jr. for the existing judgment amount of $42 million owed to Plaintiffs,
along with pre-judgment simple interest at a rate of 8% per annum from April I, 2002, and postjudgment interest compounded annually at the rate of 12% per annum thereon from the date of
this judgment.
IT IS HEREBY
_2t;_ ~ay
of October, 2014.
7
COPIES TO:
ALL ATTORNEYS OF RECORD
co
EXHIBIT
U>
.;
z
~
m
.,
Stanley M. Chesley,
Petitioner
No.AI6 '!O06 7
Judge Ruehlman
v.
Angela M. Ford, Esq. et al.
DI09138670
Respondents.
(the "Petition")
and Petitioner's
Verified Memorandum
The
and Enforcement
of
terms
CERTAIN
(the "Temporary
in
ACTIONS
Restraining
EX PARTE
this
TEMPORARY
BY RESPONDENTS
RESTRAINING
ORDER
Order") that are not defined herein have the meaning set forth in
the following
for a temporary
restraining order on an ex parte basis: "whether (I) the movant [Chesley] has shown a strong or
substantial
likelihood
shown irreparable
or probability
injunction
injunction."
Johnson v. Morris
(1995), 108 Ohio App.3d 343, 352, 670 N.E.2d 1023. Moreover, relief is appropriate if Chesley
shows serious questions going to the merits and irreparable harm which decidedly outweighs any
potential harm to the [nonmoving party] if relief is granted. Id., citing In re DeLorean Motor Co.
(C.A.6, 1985), 755 F.2d 1223.
An ex parte order is appropriate if the danger is imminent and notice to the known
Respondent, Ford, is impossible, impracticable or might prompt Ford to quickly take action to
cause the very harms that are the subject of the Petition.
argument - if Ford receives notice of the Petition and Motion without prior entry of ex parte
temporary protection, Ford might as a clerical matter cause the registration or domestication of
the Chesley Judgment and issue discovery to Ohio citizens, residents and domiciles before this
Court's hearing on the Motion. This threat is real and imminent given Ford's December 14,
2014 e-mail to Chesley's counsel and given the easy and clerical nature of the efforts Ford might
undertake. See Ohio R. Civ. Procedure 65(A).
The Court notes the appearance of counsel for an interested non-party, Waite Schneider
Bayless and Chesley ("WSBC").
possible discovery and collection action. Chesley, Chesley's wife, and WSBC are Ohio entities
resident in Hamilton County, Ohio.
After a hearing the arguments of Chesley's counsel, the Court makes the following
preliminary Findings of Fact and Conclusions of Law concerning the relief sought in the Petition
and the Motion. All of the following preliminary findings of fact and conclusions of law are
subject to further review by the Court during this proceeding, particularly since this Court may
later direct addition of certain parties to this case who may revisit any of the following
preliminary findings of fact and conclusions of law.
FINDINGS OF FACT AND CONCLUSIONS
A.
OF LAW:
this matter. It seems likely that Ford or other counsel for the Unknown Respondents will seek to
register or domesticate the Chesley Judgment in Ohio in part because Ford has stated that she
intends to demand depositions
depositions.
submit to those
filing will occur in
J Iamilton County, Ohio due to the residence of Chesley and certain of Ford's stated targets; in
that event the Chesley Judgment will be treated by this Ohio court as an Ohio judgment.
The
Court believes that it will ultimately conclude (i) as a matter of Ohio law that as a judgment
debtor, Chesley is entitled to know the total amount he owes on the Chesley Judgment and (ii) as
a matter of fact that Chesley has been denied access to this information.
B.
himself and third parties to be suffered if the Chesley Judgment is used as an Ohio judgment
without first being provided the information sought in the Petition.
opportunity to stay proceedings (i) in Kentucky by obtaining a stay pending appeal, (ii) by the
filing of a voluntary petition under the United States Bankruptcy Code, or (iii) by settlement with
some Or all of the Unknown Respondents damages Chesley and has the potential to damage any
third party from whom Ford seeks information or attempts to seize assets, all of which might be
delayed or avoided permanently.
C.
The requested relief will benefit third parties including the targets of Ford's
Importantly,
Petition and Motion has a strong likelihood of benefitting the Court and courts in Kentucky
because the actual total amount owed on the Chesley Judgment will be relevant to issues that
courts will consider going forward.
parties and represents only a minor harm to the Respondents because Ford should have ready
access to most of the information sought by Chesley thus minimizing any delay in her efforts to
use the Chesley Judgment in Ohio; and
D.
The public interest would be served by issuing the requested relief. The process
of administering justice fairly in Ohio and Kentucky will be enhanced if relief is granted. Civil
litigation is conducted with the full disclosure of relevant information and the information sought
by Chesley is relevant.
damages suffered by particular the Abbott Case plaintiffs if that case had been pending in this
Court and the need for that disclosure (including the enhanced possibility of settlement) is just as
present and important
For the next 14 days, Respondent Ford, any co-counsel acting with her and any
other Ohio lawyer representing any of the Unknown Respondents are enjoined from (i) taking
any action in the State of Ohio to enforce the Chesley Judgment or (ii) serve any Chesley asset
related discovery on any Ohio resident, citizen or domiciliary, except Chesley;
2.
For the next 14 days, Respondent Ford, any co-counsel acting with her and any
other Ohio lawyer representing any of the Unknown Respondents are enjoined from making any
filing in any Ohio court that would be or could be part of an effort to domesticate or register the
Chesley Judgment in Ohio;
4.
For the next 14 days, Ford, the Unknown Respondents and any other person
acting on behalf of the Unknown Respondents are preliminarily enjoined from taking any action
to collect the Chesley Judgment in the State of Ohio from any Ohio resident, Ohio citizen or
Ohio domiciled entity, other than Chesley;
5.
For the next 14 days, Ford, the Unknown Respondents and any other person
acting on behalf of Ford and the Unknown Respondents are preliminarily enjoined from issuing
any subpoena seeking documents
domiciled entity (other than Chesley) if the purpose of the requested documents or testimony
would be to obtain information related to any effort to enforce the Chesley Judgment;
6.
For the next 14 days, Ford, the Unknown Respondents and any other person
acting on behalf of Ford or the Unknown Respondents are preliminarily enjoined and prohibited
from destroying, damaging or secreting any documents
or electronically
stored information
relevant to any of the issues described in this Petition, the Motion or the Supporting Memo
including but not limited to any document
or electronic
information
collection of funds collected and/or credited against the Criminal Defendants Judgment, (ii)
restitution obligations of the Criminals, (iii) forfeiture of any assets in the Criminal Case, (iv)
funds Ford or any affiliated entity transferred to or from Johnston, (v) funds transferred to or for
the benefit of any Criminal Case victims who are not Abbott Case plaintiffs; (vi) amounts
distributed to the Abbott Case plaintiffs; (vi) operation of the Tandy LLC receivership; (vii)
funds transferred to or subsequently
Criminal Case or the Abbott Case, and (viii) the legal fees and expenses of Ford and her cocounsel in the Abbott Case; and
7.
believes
this Temporary
Restraining
Order
improperly or irreparably damages their position and relief cannot wait more than 14 days, Ford
is invited to contact the Court and set this matter for a hearing prior to the hearing set below.
ISSUE TO BE CONSIDERED
attached to the Supporting Memo that the Abbott Case "Plaintiffs", or some of them as
apparently asserted by Ford, are Chesley's judgment creditors and real parties in interest in this
proceeding. Therefore, this Court will first consider if steps must be taken to make those persons
or entities parties to this proceeding with proper notice of the filings by Chesley.
The Court is considering the following plan and the parties should be prepared to address
it at the next hearing in this matter:
Should respondent Ford be offered the option to either (a) provide to the Hamilton
County, Ohio Clerk of Court the names and addresses of all of the current
Unknown Respondents so that a copy of the Petition, Motion and Supporting
Memo can be served on the Unknown Respondents by the Hamilton County Clerk
of Court, I or (b) facilitate the filing of a Notice of Appearance with the Hamilton
County, Ohio Clerk of Court tor each and everyone
Respondents by one or more Ohio counsel.
appearing Ohio counsel will certify to the Court that said Ohio counsel provided a
copy of the Petition, Motion and Supporting Memo to each of the Unknown
Respondents for whom that Ohio counsel appears in this Court.
I
If option "a" is chosen, Ford shall notify Chesley's counsel who will provide to the Hamilton County Clerk of
Court adequate copies of the Petition, Motion and Supporting Memo for service by the Clerk on the entities listed by
Ford.
If'Respondent Ford wants to agree with either the "a" or "b" option described in this paragraph,
the Court invites her to so indicate and the Court will conduct a telephone conference at which
the Court will extend the prohibitions in this Temporary Restraining Order for a period of time
sufficient to cause the Unknown Respondents to receiver service of Chesley's filings and
possibly become parties and then set a briefing schedule as discussed below.
. artd post-judgment
Defendants
interest calculations,
each of Chesley's
Respondents
Judgment
Creditors
(i) take any action in the State of Ohio to enforce the Chesley Judgment or (ii) serve
any Chesley asset related discovery on any Ohio entity, except Chesley;
Whether Foret the Unknown Respondents
Unknown
Respondents
should be permanently
Chesley Judgment in the State of Ohio from any Ohio resident, Ohio citizen or Ohio domiciled
entity ( other than Chesley), until 90 days after Chesley has received all of the information that
this Court declares Chesley is entitled to receive;
Whether Ford, the Unknown Respondents
Unknown
Respondents
should be permanently
the
Chesley Judgment in Ohio until 90 days after Chesley has received all of the information that
this Court declares Chesley is entitled to receive; and
Whether Ford, the Unknown Respondents
Unknown
Respondents,
should
be permanently
and prohibited
from destroying,
damaging or secreting any documents relevant to any of the issues described in this Petition, the
Motion
or the Supporting
Memo including
or electronic
information that reflects any (i) collection of funds collected and/or credited against the Criminal
Defendants Judgment, (ii) restitution obligations of the Criminals, (iii) forfeiture of any assets in
the Criminal Case, (iv) funds Ford or any affiliated entity transferred
funds transferred to or for the benefit of any Criminal Case victims who are not Abbott Case
plaintiffs; (vi) amounts distributed to the Abbott Case plaintiffs; (vi) operation of the Tandy LLC
"'reteivership;
to or subsequently
Restraining Order to become effective due to the short terrn nature of this
Temporary Restraining Order and the protections for the Respondents included herein.
The ex parte relief lasts for no more than 14 days, unless extended by the Court or by
agreement of the parties. This matter will come on for a hearing on the Motion's request for a
preliminary injunction and consideration of the status of the Unknown Respondents on January
Ii,201S at ? 1f"!'c1ock.
Petitioner did not request and the Court does not currently intend
to combine this hearing with the hearing on the merits of the Motion as permitted by Ohio Civ.
R.6S(C).
Chesley's
counsel
will electronically
transmit
a courtesy
Restraining Order on Respondent Ford. The Hamilton County, Ohio Clerk of Court shall serve
this Temporary
Requested.
Restraining
Order on Respondent
Ford by Certified
JUDG
Copies to:
Vincent E. Mauer, Esq.
FROST BROWN TODD LLC
3300 Great American Tower
301 E. Fourth Street
Cincinnati, Ohio
ROBERT P. RUEHlMAN
Co t of Common Pleas
Hamilton County, Ohio
'"10
EXHIBIT
mill I
III
D109213798
Stanley M. Chesley,
Petitioner
v.
Angela M. Ford, Esq. et al.
JAN 1 4 2015
Respon en s.
Judge Ruehlman
RESTRAINING ORDER AGAINST
CERTAIN ACTIONS BY
RESPONDENTS AND
SETTING HEARING
This matter first came before the Court on January 7, 2015 at an ex parte conference.
Thereafter, the Court entered its KY PARTE TEMPORARY RESTRAINING ORDER
AGAINST CERTAIN ACTIONS BY RESPONDENTS AND ORDER SETTING HEARING
(the "Temporary Restraining Order"). The Temporary Restraining Order set a January 14,2015
hearing on the pending Petitioner's Motion for Order Restraining Registration and Enforcement
of Kentucky Judgment and Document Destruction (the "Motion,,).1
Respondent Angela M. Ford was given actual notice of the hearing on January 14,2015,
see Affidavit of Vincent E. Mauer filed in this matter. Respondent Angela M. Ford ("Ford") did
not present any evidence on or before January 14, 2015. The Court's preliminary Findings of
Fact and Conclusions of Law set forth in the Temporary Restraining Order continue to be the
Court's preliminary findings and conclusions and are incorporated herein by reference.
Until further Court order to the contrary or agreement of the Parties approved by the
Court:
I.
Respondent Ford, any co-counsel acting with her and any other Ohio lawyer
representing any of the Unknown Respondents are enjoined from (i) taking any action in the
1 Capitalized terms in this Order that are not defined herein have the meaning set forth in the Verified
Declaratory Judgment And Injunctive Relief (the "Petition") and Petitioner'S Motion For Order
Registration and Enforcement of Kentucky Judgment and Document Destruction (the "Motion"). The
supported by Petitioner's Verified Memorandum in Support of Motion for Injunctive Relief (the
Memo").
Petition For
Restraining
Motion was
"Supporting
'.
State of Ohio to enforce the Chesley Judgment or (ii) serving any Chesley asset related discovery
on any Ohio resident, citizen or domiciliary, except that discovery may be served on Chesley in
any non-Ohio jurisdiction if permitted by the rules applicable to that jurisdiction;
2.
Respondent Ford, any co-counsel acting with her and any other Ohio lawyer
representing any of the Unknown Respondents are enjoined from making any filing in any Ohio
court that would be or could be part of an effort to domesticate or register the Chesley Judgment
in Ohio;
3.
Ford, the Unknown Respondents and any other person acting on behalf of the
Unknown Respondents are enjoined from taking any action to collect the Chesley Judgment in
the State of Ohio from any Ohio resident, Ohio citizen or Ohio domiciled entity;
4.
Ford, the Unknown Respondents and any other person acting on behalf of Ford
and the Unknown Respondents are enjoined from issuing any subpoena seeking documents or
testimony to any Ohio resident, Ohio citizen or Ohio domiciled entity (other than Chesley) if the
purpose of the requested documents or testimony would be to obtain information related to any
effort to enforce the Chesley Judgment; and
5.
Ford, the Unknown Respondents and any other person acting on behalf of Ford or
the Unknown Respondents are enjoined and prohibited from destroying, damaging or secreting
any documents or electronically stored information relevant to any of the issues described in this
Petition, the Motion or the Supporting Memo including but not limited to any document or
electronic information that reflects any (i) collection of funds collected and/or credited against
the Criminal Defendants Judgment, (ii) restitution obligations of the Criminals, (iii) forfeiture of
any assets in the Criminal Case, (iv) funds Ford or any affiliated entity transferred to or from
Johnston, (v) funds transferred to or for the benefit of any Criminal Case victims who are not
to or subsequently
Service related to the Criminal Case or the Abbott Case, and (viii) the legal fees and
"
, onPlary
C;b~r c- ~_,
mjuncuon
4?O
_ 15 at" OJ
' ~
A I"!
I k
O'C ocx.
request
for a preliminary
At that hearlng,
'
the c.ourt may consiider,
any or all of the issues discussed in the Petition, the Temporary Restraining Order or this Order
including, but not limited to:
(a) All evidence, testimony, and exhibits to be offered by Petitioner and Respondents at
this preliminary stage of this matter relevant to any continuation of the prohibitions
set forth in the Temporary Restraining Order or this Order;
(b) Whether to convert the existing Temporary Restraining Order and this Order into a
Preliminary Injunction;
(c) At the next hearing, the Court expects specifically to address whether the Court
should grant the relief outlined on pages 7-9 of its Temporary Restraining Order,
including without limitation, whether the Unknown Respondents should be made
parties to this proceeding and whether or not the Court should order Respondent Ford
to identify by name and address each of the current Unknown Respondents; and
(d) Ordering Respondent to disclose the amount alleged to be owed to each of the
Unknown Respondents, and directing Respondent to provide a complete accounting
of all funds received by the Unknown Respondents in the Abbott Case, all funds
received by the Unknown Respondents from Respondent Ford, all fees and expenses
received by Respondent Ford or paid by Respondent Ford to third parties on account
of the Abbott Case matter, and all accounting records Respondent Ford has prepared
for the Unknown Respondents all as may be needed to permit Chesley to confirm any
calculation of the current total amount of the Chesley Judgment that the Court may
order be provided to Chesley.
Petitioner did not request and the Court does not currently intend to combine this hearing
with the hearing on the merits of the Motion as permitted by Ohio Civ. R. 65(C).
After considering
Petitioner's
Temporary Restraining Order and this Order, the Court will address the status of the Unknown
Respondents as that issue is described in the Temporary Restraining Order.
Chesley is not required to post any security for this Order to be effective.
Chesley's counsel will transmit a courtesy copy of this Order to Respondent Ford both
electronically and by first class United States mail, postage prepaid.
Entered this 14th day of January, 2015
Copies to:
:;;
EXHIBIT
I Y\
CivilActionNo. 1:15-cv-83
Judge MichaelR. Barrett
DEFENDANT ANGELA FORD'S
MOTION TO DISMISS THE
COMPLAINT
Introduction
Every complaint, no matter where it is filed, must establish jurisdiction over the
defendant and it must allege a real case or controversy rather than a hypothetical, future
event. Stanley Chesley ("Chesley") has filed a complaint that lacks jurisdiction over his
named defendant Angela Ford ("Ford"), a lawyer whose clients hold a judgment against
him, and he does not allege sufficient facts to establish a case or controversy, let alone
support the issuance of an injunction. In addition, his complaint violates Article 4 of the
United States Constitution.
This action arises out of a lawsuit in the Commonwealth of Kentucky filed by
Ford on behalf of hundreds of plaintiffs (the Unknown Respondents in this case) to
recover settlement funds improperly taken by Chesley and his co-counsel in underlying
litigation over use of the diet drug combination known as "fen-phen" (the "Kentucky
Lawsuit"). Chesley and his co-counsel represented the Unknown Respondents in the
fen-phen litigation and kept settlement funds far in excess of what was provided in the
fee agreements. Chesley was permanently disbarred by the Supreme Court of Kentucky
for his ethical violations, including his role in having "knowingly participated in a
scheme to skim millions of dollars in excess attorney's fees from unknowing clients."
Kentucky Bar Ass'n v. Chesley, 393 S.W.3d 584, 599 (Ky. 2013).
The trial court in the Kentucky Lawsuit granted partial summary judgment in
favor of the Unknown Respondents against Chesley and ruled that he was jointly and
severally liable for the millions of dollars in excess attorney's fees taken in his scheme
with his co-counsel. Subsequent orders made that judgment final pursuant to Kentucky
Rule of Civil Procedure 54.02 and awarded pre-judgment and post-judgment interest
pursuant to Kentucky law.
Chesley has appealed the judgment to the Court of Appeals of Kentucky, but he
did not post a supersedeas bond, which is required under Kentucky law to stay
enforcement of the judgment on appeal. See Ky. R. Civ. P. 62, 73.04. Consequently, the
Unknown Respondents are free under Kentucky law to enforce their judgment.
Instead of obtaining a lawful stay of enforcement of the judgment pursuant to
Kentucky law, Chesley filed this action in the Court of Common Pleas for Hamilton
County, Ohio seeking to impose preconditions on enforcement of the judgment against
him.
He did so even though the plaintiffs in the Kentucky Lawsuit have not done
anything in the State of Ohio to domesticate, register or enforce their judgment against
him. Chesley named Ford, the attorney for the plaintiffs in the Kentucky Lawsuit, as a
respondent
but did not name any of the plaintiffs, naming only "Unknown
Respondents." Ohio courts do not have personal jurisdiction over Ford and nothing in
Chesley's Complaint provides a basis for this Court's (or any Ohio state court's) exercise
of personal jurisdiction over her.
Moreover, Chesley's Complaint fails to state a claim upon which relief can be
granted. The Kentucky judgment against Chesley is entitled to full faith and credit in
the State of Ohio. Chesley cannot raise issues in Ohio courts challenging the validity of
the judgment itself. Nevertheless, he raises issues in his Complaint that are nothing
more than a collateral attack on the judgment that the Full Faith and Credit Clause of
the United States Constitution does not permit. And he raised these same arguments
3
before the Kentucky court and that court already denied them. Chesley's claim that, if
and when Ford takes action in Ohio on behalf of her clients, to enforce the Kentucky
judgment, she will do so in violation of Ohio's procedure for filing a foreign judgment is
pure speculation and does not provide a basis for the declaratory judgment and
injunctive relief he requests in this action. Those claims are not justiciable, as the
proper time to raise them is if and when they arise, not prior to Ford or anyone else
taking any action in Ohio to enforce the Kentucky judgment.
II.
Chesley, his co-counsel and the trial court judge in the fen-phen litigation as a result of
the scheme to skim money from the plaintiffs in the Kentucky litigation were wellpublicized. This Memorandum will set forth the facts that are necessary to this Court's
decision on this Motion to Dismiss or to give context to this action.
A.
Chesley represented
regarding injuries alleged to have been caused by the diet drug combination known as
"fen-phen." Kent!!.ckyBar Ass'n v. Chesley, 393 S.W.3d 584, 587-88 (Ky. 2013).1 The
fen-phen litigation was ultimately settled for the aggregate sum of $200 million. ld. at
588. According to the contingent fee contracts each of the plaintiffs had with one of
The facts in this subsection are taken the Kentucky Supreme Court's decision in Kentucky Bar
Ass'n v. Chesley, 393 S.W.3d 584 (Ky. 2013). A copy of the Kentucky Supreme Court's decision is
attached as Exhibit A. That opinion ordered Chesley's permanent disbarment from the practice of law in
Kentucky. Id. at 602. Although these facts are provided for purposes of context and background, this
Court "may consider matters of public record in deciding a motion to dismiss without converting the
motion to one for summary judgment." Commercial Money Ctr., Inc. v. Ill. Union Ins. Co., 508 F.3d 327,
336 (6th Cir. 2007).
Chesley's co-counsel, the total attorney's fees should have been approximately $66.82
million.
Id". at 592.
agreement with his co-counsel, should have been approximately $14 million.
Id.
Instead, the clients received much less than they were entitled to receive and Chesley
personally received approximately $20.5 million. Id. at 594.
Ford represents the plaintiffs in litigation arising out of the theft of the settlement
funds in the fen-ph en litigation. (Doc. 1-1,at 4, Chesley's Verified Complaint ("Chesley
Compl.") at ~ 2); Mildred Abbott et al. v. Stanley M. Chesley, et aI., Case No. 05-CI00436 in the Circuit Court for Boone County, Kentucky (the "Kentucky Lawsuit").
While the Kentucky Lawsuit was pending, the Kentucky Bar Association was
investigating Chesley's conduct in the fen-phen litigation (and the conduct of his cocounsel).
personally received fees in excess of what was provided in his fee-splitting agreement
and that "[tjhe vast amount of evidence compiled and presented in this matter
demonstrates convincingly that [ChesleyJ knowingly participated in a scheme to skim
millions of dollars in excess attorney's fees from unknowing clients." Id. at 595-96; 599.
The Supreme Court of Kentucky also permanently disbarred four other lawyers and the trial court
judge in the fen-phen case. Kentucky Bar Ass'n v. Bamberger, 354 S.W.3d 576 (Ky. 2011); Kentucky Bar
Ass'n v. Helmers, 353 S.W.3d 599 (Ky. 2011); Mills v. Kentucky Bar Ass'n, 318 S.W.3d 89 (Ky. 2010);
Gallion v. Kentucky Bar Ass'n, 266 S.W.3d 802 (Ky. 2008); Cunningham v. Kentucky Bar Ass'n, 266
S.W.3d 808 (Ky. 20(8).
B.
The Kentucky Lawsuit in which Ford represents the plaintiffs from the fen-phen
litigation was filed against Chesley and his co-counsel to recover damages from the
"scheme to skim millions of dollars in excess attorney's fees." The trial court in that case
granted the plaintiffs' motion for summary judgment against Chesley'S co-defendants in
the Kentucky Lawsuit and awarded damages of $42 million, finding that the codefendants were jointly and severally liable for the damages and the Supreme Court of
Kentucky upheld that judgment against Chesley's co-defendants. See Abbott v. Chesl.m:::,
413 S.W.3d 589,602-04 (Ky. 2013).
The trial court in the Kentucky Lawsuit initially denied the plaintiffs' summary
judgment motion as to Chesley and the Supreme Court held that the denial was
interlocutory and not appealable. rd. at 602. However, once the case went back to the
trial court, that court and the plaintiffs had the benefit of the decision of the Supreme
Court of Kentucky permanently disbarring Chesley for his conduct directly at issue in
the Kentucky Lawsuit. Consequently, the plaintiffs again moved for summary judgment
on the grounds of collateral estoppel - that Chesley was estopped from denying the facts
decided against him by the Supreme Court and that those facts entitled the plaintiffs to a
judgment as a matter of law. The trial court agreed and granted the plaintiffs judgment
as a matter of law for $42 million, finding that Chesley was jointly and severally liable
with his co-defendants for the damages (the "Chesley Judgment").
References to page numbers from documents in this Court's docket are to this Court's numbering
of the pages.
(See Orders
KRS 426.030.
Chesley did not post a supersedeas bond to secure a stay of enforcement of the judgment
while on appeal. Indeed, he alleges that he is unable to do so. (See Doc. 1-1 at 12,
Chesley CompI. at ~ 27).
Instead, on January 6, 2015 Chesley filed a Petition for Declaratory Judgment
and Injunctive Relief in his home state of Ohio, challenging the merits of the Chesley
Judgment and seeking to enjoin Ford, or any other attorney acting in Ohio, from
enforcing the valid and enforceable Kentucky judgment unless certain preconditions are
7
with a summons), the Court extended the restraining order through March 4, 2015.
(Doc. 1-1 at 106-09, Restraining Order). Specifically, the Court purported to restrain
Ford and "any co-counsel acting with her and any other Ohio lawyer representing any of
the Unknown Respondents" from taking any action to enforce or domesticate the
Chesley Judgment or serve any related discovery or subpoenas on anyone other than
Chesley. (Doc. 1-1 at 106-07, Restraining Order ~~ 1-4). It also prohibited Ford or the
Unknown Respondents from destroying documents relevant to issues pending in the
matter.
(rd. ~ 5). On February 7, 2015, prior to being served with a summons, Ford
(Id.)
He did not
Argument
A.
establishing that personal jurisdiction exists. Youn v. Track, Inc., 324 F.3d 409, 417
(6th Cir. 2003).
consider the pleadings and any affidavits in a light most favorable to the plaintiff. Dean
v. Motel 6 Operating L.P., 134 F.3d 1269,1272 (6th Cir. 1998).
In a diversity case, a federal court can only exercise personal jurisdiction over a
defendant if such jurisdiction is (1) authorized by the state's long-arm statute; and (2)
otherwise consistent with constitutional due process requirements.
417; Calphalon Corp. v. Rowlette, 228 F.3d 718, 721 (6th Cir. 2000). Ohio's long-arm
statute is not coextensive with the Fourteenth Amendment, so both prongs must be
examined.
Kauffman Racing Equip., L.L.C. v. Roberts, 126 Ohio St.gd 81, 87 (Ohio
2010). Chesley has not shown under either prong that this Court may exercise personal
jurisdiction over Ford.
1.
The Ohio long-arm statute, Ohio Revised Code section 2307.382, permits an
Ohio court to exercise personal jurisdiction over a non-resident only in the following
specific enumerated circumstances:
(1) Transacting any business in this state;
9
Chesley'S
Complaint does not allege a single action Ford has taken in Ohio and alleges no contacts
10
she has with Ohio other than having clients with a Kentucky judgment against an Ohio
resident.
(See Doc. 1-1 at 2-14, Chesley Compl.). Accordingly, Ford is not subject to
2.
Burg_erKing Co. v. Rudzewicz, 471 U.S. 462, 475 (1985). Thus, the
minimum-contacts
requirement
purposefully directed toward the forum state. Reynolds v. International Amateur Ath.
Fed'n, 23 F.3d 1110, 1119(6th Cir. 1994) (quoting Asahi Metal Industry Co. v. Superior
Court, 480 U.S. 102, 112 (1987)). A defendant's conduct and connection with the forum
must be of a character that she "should reasonably anticipate being hailed into court
there." Burger King Co., 471 U.S. at 474 (quoting World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 297 (1980)).
11
The second prong of the Sixth Circuit's test requires that the cause of action arise
from the defendant's activities within the forum, i.e., that it be '''related to" or
"'connected with" the forum contacts. Youn, 324 F.3d at 419 (quoting Third Nat'l Bank
in Nashville v. WEDGE Group, Inc., 882 F.2d 1087,1091 n.2 (6th Cir, 1989)).
Additionally, the exercise of personal jurisdiction must comport with "traditional
notions of fair play and substantial justice." Asahi Metal Industry Co. v. Superior Court,
480 U.S. 102, 113 (1987). A court should consider the burden on the defendant, the
interests of the forum state, and the plaintiffs interest in obtaining relief. It must also
weigh in its determination the interstate judicial system's interest in obtaining the most
efficient resolution of controversies and the shared interest of the several states in
furthering fundamental substantive social policies. Id. (citing World-Wide Volkswagen,
444 U.S. at 292).
Application of the Sixth Circuit's test shows that the exercise of personal
jurisdiction over Ford does not comport with due process requirements.
taken any action in or directed to Ohio. Filing a lawsuit in Kentucky on behalf of clients
against an Ohio resident (who is subject to personal jurisdiction in Kentucky in that
matter) does not constitute contacts in Ohio of such a character that the Kentucky
lawyer should reasonably anticipate being hailed into court in Ohio. Chesley failed to
allege any activities by Ford in Ohio or directed to Ohio connected with the cause of
action he filed. The exercise of personal jurisdiction over Ford in Ohio is not reasonable.
Ford has done nothing in Ohio regarding Chesley or the Chesley Judgment.
Consequently, to exercise personal jurisdiction over her would violate due process.
12
B.
A court may only decide justiciable cases and controversies. See, e.g., Lujan v.
Defenders of Wildlife, 504 U.S. 555, 557 (1992) (recognizing that the justiciability
requirement is an "irreducible constitutional minimum of standing").
A declaratory
judgment action is not available to obtain "'an opinion advising what the law would be
upon a hypothetical state of facts.'" MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118,
127 (2007) (quoting Aema Life Ins. Co. v. Haworth, 300 U.S. 227, 240-41 (1937)).
Ohio law also requires "'an actual controversy" that is "'not contingent on the
happening of hypothetical future events." Arnott v. Arnott, 132 Ohio St.gd 401, 404
(Ohio 2012) (quoting Corron v. Corron, 40 Ohio St.gd 75, 79 (Ohio 1988); League for
Preservation of Civil Rights v. Cincinnati, 64 Ohio App. 195, 197 (Ohio Ct. App. 1940)).
There is no justiciable case or controversy in this case. Chesley requests an
advisory opinion based upon the happening of hypothetical future events. Neither Ford
nor her clients has taken any steps to domesticate or enforce the Chesley Judgment in
Ohio.
Chesley filed this action based upon his allegation that "Ford intends to
domesticate the Chesley Judgment in the State of Ohio and take collection action on
assets located in the State of Ohio." (See Doc. 1-1at 11,Chesley CompI. at ~ 25). He then
wants to require Ford, before she has taken any action in Ohio on behalf of her clients,
to provide him with specific information that the Kentucky court has already ruled is not
required as part of the judgment document.
Twyford, 145 S.W.2d 55, 55 (1940); Oglesby v. Prudential Ins. Co. of Am., 82 S.W.2d
824, 826 (1935) (holding that pleadings are considered in aid of providing certainty in a
judgment).
13
Case: 1:15-cv-00083-MRB
against his judgment creditors' attorney on the basis of what he thinks she might do in
Ohio. This matter is not justiciable and this Court should, therefore, dismiss it.
C.
The Full Faith and Credit Clause of the Constitution of the United States provides
that each State must give full faith and credit to the judicial proceedings of every other
State. U.S. Const., Art. IV,
1.
the defendant and the subject matter of the controversy, then the Full Faith and Credit
Clause "precludes an inquiry into the merits of the cause of action, the logic or
14
consistency of the decision, or the validity of the legal principles on which the judgment
is based." Milliken v. Meyer, 311 U.S. 457, 462 (1940). The judgment is entitled to "the
credit which it has in the State from which it is taken, not the credit that under other
circumstances and conditions it might have had." Morris v. Jones, 329 U.S. 545,550-51
(1947). In other words, the foreign judgment is not subject to collateral attack in the
enforcing jurisdiction so long as the foreign court had personal and subject matter
jurisdiction.
Chesley's filings are replete with attacks on the validity of the judgment itself,
including attacks on the form of the judgment, which the Kentucky court has already
decided against him. (See Doc. 1-1 at 4, 12, Chesley CompI. at ~I~I
3, 4,29; Doc. 1-1 at 2632, Verified Mem. Supp. Mot. Inj. Relief; see also Exs. C, 0, and E). The fact that
Chesley is "confident" that his appeal will be successful or that he believes the correct
amount of the Kentucky judgment is something less than $42 million is irrelevant. The
Kentucky court entered a judgment against Chesley for $42 million for which he is
jointly and severally liable with his co-defendants.
Credit Clause prohibits an Ohio court from considering those issues or any other issue
regarding the validity of the judgment because the Kentucky court had jurisdiction over
Chesley and the subject matter of the litigation. Consequently, this action should be
dismissed for that reason.
IV.
Conclusion
For the foregoing reasons, Defendant Angela M. Ford respectfully requests that
this Court dismiss this action. Neither this Court nor any other court in the State of
Ohio has personal jurisdiction over Ford. Moreover, Chesley's Complaint fails to state a
claim upon which relief can be granted as there is no justiciable case or controversy at
15
issue and the Full Faith and Credit Clause of the Constitution of the United States
prohibits the inquiry he requests into the Chesley Judgment.
Respectfully submitted,
Email: brian.sullivan@dinsmore.com
christen.steimle@dinsmore.com
Attorneysfor Defendant
Angela M. Ford, Esq.
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing was filed electronically with the Clerk
of Court to be served on the following by operation of the Court's electronic filing system
on this 12thday of February, 2015:
Vincent E. Mauer (0038997)
FROST BROWN TODD LLC
3300 Great American Tower
301 E. Fourth Street
Cincinnati, Ohio 45202
16
Case: 1:15-cv-00083-MRB
#: 194
Page I
Lexisl-lexis'
10
Analysis
As of: Feb 12, 2015
KENTtJCKY BAR ASSOCIATION, MOVANT v, STANLEY M. CHESLEY,
RESPONDENT
2011-SC-000382-KB
SUPREME COURT OF KENTUCKY
393 S. W.3d 584; 2013 Ky. LEXIS 44
disbarred
Page 2
393 S.W.3d 584, *; 2013 Ky. LEXIS 44, **
Investigations
[IfN9] See Ky. Sup. Ct. R. 3.130-8. I(a).
Legal Ethics > Professional
Overview
Civil Procedure > Remedies> Costs & Attorney Fees>
Attorney Expenses & Fees> Reasonable Fees
Legal Ethics > Client Relations > Attorney Fees >
Contingency Fees
Legal Ethics> Client Relations> Attorney Fees> Fee
Agreements
[HN2) An attorney's fee in a contingency fee case that
grossly exceeds the fee provided for in the fee agreement
is unreasonable per se.
Legal Ethics > Client Relations > Attorney Fees >
Contingency Fees
[HN3] See Ky. Sup. Ct. R. 3.130-1.5(c).
Legal Ethics> Client Relations> Attorney Fees> Fee
Splitting
[HN4] See Ky. Sup. Ct. R. 3.130-L5(e).
Legal Ethics> Client Relations> Attorney Fees>
Splitting
[HN5) Ky. Sup. Ct. R. 3. 130-1.5(e)(2) Clearly states
clients must be advised of a fee splitting agreement
given the opportunity to object to the participation of
attorney.
Overview
[HNII] See Ky. Sup. Ct. R. 3.130-5. l(c)(I).
Evidence > Inferences & Presumptions> Inferences
Evidence> Procedural Considerations> Circumstantial
& Direct Evltlence
Legal Ethics > Professional Conduct > General
Overview
[HN 12J To ratify another attorney's misconduct in
violation of Ky. Sup. Ct. R. 3.130-5. I (c)( I), a person
must have actual knowledge of the misconduct. However,
Ky. Sup. Ct. R. 3.130-1.0(t) states that a person's
knowledge may be inferred from circumstances.
Fee
that
and
any
for
or
or
of
Page 3
393 S.W.3d 584, *; 2013 Ky. LEXIS 44, **
OPINION
Page 4
393 S.W.3d 584, *586; 2013 Ky. LEXIS 44, **2
Page 5
393 S.W Jd 584, *587; 2013 Ky. LEXIS 44, **6
Page 6
393 S.W.3d 584, *589; 2013 Ky. LEXIS 44, **10
4
Mills, who did not attend the mediation
conference, and by his own admission was drunk
during much of the relevant time period, was told
by his co-counsel that the case settled for $150
million, not $200 million.
American Home left it for the plaintiffs' attorneys to
determine how much of the settlement fund to allocate to
each of their clients. However, under the terms of the
agreement, plaintiffs' counsel had to provide American
Home with a schedule listing each of the settling clients
and how much of the settlement money would be
allocated [** I I] to each client A signed release from
each client was also required. The agreement also
provided that the settlement would not take effect unless
plaintiffs' counsel obtained a specific number of signed
client releases before a specified deadline. Two
preconditions of the agreement required approval of the
Boone Circuit Court. First, the class action could be
decerti tied only by court order. Second, the claims of the
individual Guard clients could not be dismissed with
prejudice without court approval.
The settlement agreement also incorporated a "side
letter" which outlined an agreement by which the
plaintiffs' attorneys agreed to indernni fy American Home
up to a total of $7.5 million for any new fen-phon claims
that might arise from individuals who were eligible to be
members of the decertified class. In other words, $7.5
million of the aggregate settlement would have to be
reserved to cover potential claims, at least until the
applicable statute of limitations brought the subject to
repose. Thereafter, any part of the reserve remaining
would be subject to disposition by order of the court.
On May 9, 2001, Respondent, along with Gallion,
Helmers, Cunningham, and David Schaefer, an attorney
f* * 12] for American Home Products, appeared before the
presiding judge, Joseph Bamberger. and tendered for his
consideration the "Order Decertifying the Class and
Dismissing Action" as required by the settlement. Judge
Bamberger expressed concern about decertifying the
class and dismissing the individual claims, especially
when he realized that the settling clients and the members
of the class had not been given notice of the settlement or
of the impending dismissal of their claims. Respondent
carefully explained to the judge that the settlement
resolved only the claims of the client group (the 431); the
claims of the members of the decertified class were
dismissed without prejudice and they would have other
Case: 1:15-cv-00083-MRB
Page 7
393 S.W.3d 584, *590; 2013 Ky. LEXIS 44, **14
Resources,
Inc., 209
Page 8
393 S.W.3d 584, *591; 2013 Ky. LEXIS 44, **18
Respondents
21 % share
$14,031,500.00.
of that
fee would
equal
9
We decline to calculate the effective
cumulative
percentage
derived from slight
variations in rates charged by the three attorneys:
Mills at 30%, Cunningham at 33%, and Gallion
33 1/3%,
Stuart, in his continuing effort to discover the extent
of Mills' wrongful diversion of law firm funds, sought
and obtained a commission from the Fayette Circuit
Court authorizing
the out-of-state
deposition
of
Respondent, an Ohio resident. Before the deposition was
taken, however, Stuart and Mills were ordered to attempt
to settle their dispute by mediation, Respondent sent
word through a Mills-employee
[**21) attending the
mediation conference that, if the settlement talks stalled,
he would be willing to contribute money to get the case
resolved, Initially, the mediation was unsuccessful
because Stuart would not accept the highest amount Mills
would offer, Respondent, who was not a party to the
Stuart-Mills
lawsuit, then agreed to sweeten the
settlement pot by the sum of $500,000.00 to get the case
settled and avoid his pending deposition. With that
inducement,
Stuart
settled.
Later,
Gallion
and
Cunningham reimbursed Respondent $250,000.00, as
their contribution to the Stuart-Mills settlement.
As the
Inquiry
Commission's
investigation
proceeded, Mills hired attorney Wi lliam E. Johnson to
represent him. Gallion and Cunningham hired Whitney
Wallingford for the same purpose, Respondent, who at
the time was not subject to a Kentucky bar disciplinary
inquiry, attended a meeting with Mills, Gallion, and
Cunningham, and their respective attorneys. At the
meeting, Respondent urged all of the attorneys then
subject to the KBA investigation
to agree upon
representation
by the same counsel. As a result,
Wallingford agreed to withdraw as counsel for Gallion
and Cunningham. Before he did so, he submitted [**22)
a set of documents in response to the Inquiry
Commission subpoenas. The response included a client
payment spreadsheet that grossly overstated the amounts
of money that had been paid to the clients, Before filing
the response and the spreadsheet, Wallingford asked
Respondent to review the response and provide input.
Respondent
did so and voiced no disapproval.
Respondent claims he had no way to know that the
spreadsheet was inaccurate.
Page 9
393 S.W.3d 584, *592; 2013 Ky. LEXIS 44, **22
AGAINST RESPONDF:NT
Page 10
393 S.W.3d 584, *594; 20]3 Ky. LEXIS 44, **25
Case: 1:15-cv-00083-MRB
Page I I
.193 S.WJd 584, *595; 20U Ky. LEX1S 44, **29
10 Sec footnote 9.
[*596] [HN2) An attorney's fee in a contingency fee
case that so grossly exceeds the fee provided for in the
fee agreement is unreasonable per se. Respondent's fee
was subject to the limitations of the contingent fee
agreements so we conclude that he violated SCR
3.130-1.5(<l). Moreover, even without the fee contracts
with the clients, as shown above, the 49% fcc was
unreasonable and Respondent's $20 million share of it
taken without notice to the client was unreasonable, and
constitutes a violation of SCR 3.130-1.5(a).
13, SCR 3,130-l.S(c).
SCR 3. 130-1.5(c) states in pertinent part:
[HN3] [a] fee may be contingent on the
outcome of the matter for which the
Respondent
was a signatory
to a fcc
Page 12
notice to clients.
Accordingly, we conclude that Respondent
SCR 3.130-1.5(e).
violated
D. SCR 3.130-1.8(g)
SCR 3.130-1.8(g) provides in pertinent part:
[HN6] [a] lawyer who represents two or
more clients shall not participate in
making an aggregate settlement of the
claims of or against the clients ... unless
each client consents after consultation,
including disclosure of the existence and
nature of all the claims ...
and of the
participation
of each person in the
settlement.
Case: 1:15-cv-00083-MRB
Page 13
393 S.W.3d 5H4, *59H: 2013 Ky. LEXIS 44, **36
that
Respondent
violated
SCR
E. SCR 3.1303.3()
SCR 3.130-3.3(a) provides in pertinent part:
[lINSJ [a] lawyer shall not knowingly:
(I) make a false statement of material fact
or law to a tribunal; (2) Fail to disclose a
material fact to the tribunal
when
disclosure is necessary to avoid a fraud
being perpetrated upon the tribunal ...
SCR
Page 14
393 S.W.3d 584. *599; 2013 Ky. LEXIS 44, **40
material fact.
is therefore
guilty of violating
SCR
Respondent
complains
that this charge lacks
specificity. Based upon our review of the record, we
agree with the Trial Commissioner's assessment. The vast
amount of evidence compiled and presented in this matter
demonstrates
convincingly
that Respondent
[**42]
knowingly participated in a scheme to skim millions of
dollars in excess attorney's fees from unknowing clients.
He may have kept himself at aim's length from Mills,
Page 15
393 S,W.3d 584, *600; 2013 Ky, LEXIS 44, **43
Page 16
393 S.W.3d 584, *601; 2013 Ky. LEXlS 44, **46
wrongful
of victim;
experience
in
the
to making restitution.
B. Payment of Restitution
The Trial Commissioner and the Board of Governors
requested that we order Respondent to pay over $7
million in restitution to the Guard case clients. We
decline to do so. We agree with Respondent's argument
that [HN 17] our Supreme COUl1 Rules do not allow for us
to order restitution when a disciplinary action leads to a
permanent disbarment. SCR 3.380 in pertinent part states:
[HN 18] "discipline may be administered by way of a
private [**49] reprimand, suspension from practice for a
definite time with or without conditions as the Court may
impose, or permanent disbarment." [HN 19] The plain
language of the rule indicates that while this Court may
order an attorney disciplined by either a temporary
suspension from the practice of law, public reprimand, or
private reprimand to comply with any conditions imposed
by the Court, a permanent disbarment stands alone -separated from the language allowing us to impose
conditions by the word "or."
A disbarred attorney is no longer a member of the
Kentucky Bar Association and no longer subject to our
direct supervision. Moreover, the affected clients have
brought a civil action to recover any appropriate damages
they sustained, and the determination of their remedy is
more appropriately addressed in that forum.
Thus it is ORDERED that:
I) Respondent, Stanley M. Chesley, KBA Number
I 18 I0, whose bar roster address is Fourth and Vine
Tower, Suite 1513, Cincinnati, Ohio 45202, is adjudged
guilty of violating SCR 3. I 30- I.5(a); SCR 3, I30- J.5(c);
SCR 3.130-J.5(e); SCR 3.130-1.8(g); SCR 3.130-3.3(a);
SCR 3. I 30-8. l(a),
SCR 3. 130-8.3(c),
and SCR
3. 130-5. I (c)( I) and is hereby permanently disbarred from
[**50] the practice of law in Kentucky. Respondent
thusly, may never apply for reinstatement to the Bar
under the current rules;
2) Respondent in accordance with SCR 3.390, shall
notify all Courts in the Commonwealth of Kentucky or
other tribunals in which he has matters pending, and all
clients, of his inability to represent them and of the
Case: 1:15-cv-00083-MRB
r.sxrs 44,
Page 17
**50
v.
DEFENDANTS
The Court held Chesley jointly and severally liable, as a matter of law under a
joint enterprise
the Kentucky
Supreme COUl1's
01'
The Court concluded that Chesley had a full and fair opportunity to litigate the
issues before the KBA Trial Commissioner,
Chesley was not permitted to take discovery in connection with that proceeding.
Pursuant to CR 54.02, which provides that such an interlocutory order is "subject to revision at
any time," and the Court's inherent authority to reconsider its interlocutory rulings, Mr. Chesley
req uests that the Court alter, amend, or vacate the August 1, 2014 Order.
Argument
I.
The Court's application of joint and several liability against Chesley, as a matter
of law, is erroneous because disputed issues of material fact remain as to the
allegation that Chesley was a "full partner"
in the "enterprise"
among
Cunningham, Gallion, and Mills.
A. The Court's ruling extends the Kentucky
case, without any new evidence.
Supreme
Court's
opinion in this
This Court's holding that Chesley is jointly and severally liable with Cunningham,
Gallion, and Mills under a theory of joint enterprise is an extension of the Kentucky Supreme
Court's opinion in Abbott v. Chesley, 413 S.W.3d 589 (Ky. 2013). Indeed, this Court's Order
does not even mention the part of that opinion in which the Supreme Court specifically declined
to extend joint enterprise liability to Chesley because his role in the alleged enterprise was
indisputably different than the others:
Chesley'S role in the enterprise clearly differed from that of Cunningham,
Gallion, or Mills. The agreement itself seems to treat him differently. For
example, the agreement provided that Chesley and Richard D. Lawrence would
have "no responsibility for [the] timely filing ... of any complaints" and that COM
would "indemnify them from such responsibility." Whether the differences prove
to be material is a matter that can only be determined as the case against him
proceeds in the trial court.
ld. at 604-05.
The Supreme Court issued its opinion in Abbott more than five months after its
ruling in the disciplinary action against Chesley, so it was fully aware of the factual findings
upon which Plaintiffs'
Supreme Court concluded that the facts regarding Chesley's role would need to be further
developed in the trial court before joint enterprise liability could be imposed against him.
Case: 1:15-cv-00083-MRB
No depositions have been taken in this case since the Supreme Court issued its opinion
and Plaintiffs have submitted no evidence in support of their motion for summary judgment,
It
was thus improper for this Court - with the same factual record before it and without any
additional evidence - to do what the Kentucky Supreme Court was unwilling to do and hold
Chesley jointly and severally liable as a matter of law,
B. Genuine issues of material fact remain regarding Chesley's role.
Summary judgment on the issue of joint and several liability is not appropriate because
there are genuine issues of material fact as to whether Chesley was an equal partner in Gallion,
Cunningham, and Mills' joint venture, Summary judgment is only permitted "if the pleadings,
depositions, answers to interrogatories, stipulations, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue
as to any material
party is entitled to a judgment as a matter of law," CR 56,03, "The record must be viewed in a
light most favorable to the party opposing the motion for summary judgment and all doubts are
to be resolved in his favor." Steelvest, Inc. v. Scansteel Serv. Ctr. Inc., 807 S.W.2d 476, 480
(Ky. 1991), The record in this case - while fur from being fully developed - remains disputed
with respect to Chesley'S
among Gallion,
by testimony
For example,
Rebecca
Mills who met with over 130 clients to secure releases - testified
Chesley
"settle"
the individual
Chesley
claims
or David Helmers
instructed
money,
meeting
These
statements
Phipps
-- an employee
with clients,
of
are amply
Helmers
or raising
the scheme to
testified
that Mr.
offers to objecting
1 The United States Attorney consistently recognized that Chesley was not a part in Gallion, Cunningham,
and Mills' conspiracy to defraud their clients, For example, in a brief filed in Gallion and Cunningham's
appeals of their criminal convictions to the Sixth Circuit, the United States stated:
, , . the evidence showed that he did not advise the defendants to engage in their
misconduct. Chesley did not advise Gallion and Cunningham regarding what to tell their
clients, nor did he tell them to withhold from their clients the amount of settlement, the
number of others taking from the settlement, and the 95 per cent agreement provision.
He did not advise them regarding how to determine the individual settlement amounts, or
to conceal the terms of the side letter. He did not advise them regarding how to calculate
the attorneys' fees or what type of accounts to use in handling the funds, nor did he tell
them they should take their contingency fees off the total settlement amount and then go
back to the court and ask for more, lIe did not tell them they could put money in out-ofstate accounts without their clients' consent. And he did not tell them they could use the
money in the escrow account to buy vehicles and pay their employees, .. ,
Brief of the Plaintiff-Appellee United States, p, 31, fil 7, United States Y. Shirley Cunningham, Jr. and
William Gallion, Nos, 09-5987, 09-5998, On Appeal from The United States District Court for the
Eastern District of Kentucky, D,C, No. 2:07-CR-0039-DCR (Hon, Danny C. Reeves, D.J,). During the
course of Gallion and Cunningham's second criminal trial, United States District COU!i Judge Danny C.
Reeves stated that he believed the evidence shows Chesley was not in on the conspiracy among the other
lawyers:
In relation to Mr. Chesley's testimony, there's no indication ~ first of all, he wasn't
advised of how these clients or how much fees were actually being paid to the clients, his
agreement with the attorneys was to split and to obtain a percentage of the total fees.
There's no indication, at this point, that Mr. Chesley was aware of what the defendants
were up to in terms of taking fees in this ease.
Transcript in UnitedStales Y. Gallion, No 2:07-CR-0039 (DCR).
2 E.g., Ky. Bar Ass 'n v, Chesley, Tr. I, Hamm, pp. J 00G-08; Tr, II, Hamrn, pp, 203-06; Tr. II, Phipps, pp.
53-54, 59, 103-04, I J 2- J 4; '1'1'. II, Helmers, pp, 382-84, 387-88, "'1'1'. I" refers to testimony from the
hearing conducted on November) 5-1 G, 2009; "Tr. II" refers to testimony from the hearing conducted on
September 13-24,2010. Copies of the foregoing excerpts have been separately filed with the COUl1with
a Notice of Filing,
) TI', II, Phipps, pp, 53-54
1 Tr. II, Helmers, pp. 382-84.
bank records connected with the fen-phen settlement, confirmed that Mr. Chesley had no
association with, or control over, the escrow accounts from which the settlement funds were
distributed.'
To the extent Chesley became co-counsel by virtue of the fee-sharing agreement, the
nature of the engagement clearly changed once the settlement with American Home Products
("AHP") was negotiated,
Only
Gallion, Cunningham, Mills, and Richard Lawrence signed the Settlement Agreement and were
identified in the Agreement as the "Settling Attorneys,"
allocating the settlement funds among the claimants, providing appropriate medical records to
AHP, obtaining releases and dismissals from the claimants, and to take all other necessary steps
to effectuate the settlement,
attorney for purposes of the Rules of Professional Conduct, that does not
automatically make him a joint venturer in the other lawyers' collaboration (and conspiracy) in
connection with the administration
Regardless
of any ethical
responsibilities Chesley may have had as a lawyer, there is significant evidence that he did not
share the "common purpose" undertaken by the lawyers involved in the distribution of funds and
did not have an equal right to a voice in the direction of the enterprise.
It was thus error for this Court to find as facts that "Chesley shared the common purpose
to be carried [out] with Gallion, Cunningham and Mills" and that "Chesley maintained a voice in
the managerial control of the enterprise,"
the ethics proceeding and thus cannot support judgment by collateral estoppel. See Mtller v.
TI'. 1, Hamm, pp. 1006-08; Tr. JI, Hamm, pp. 203-06,
6 A copy of the Settlement Agreement, which was part of the record in the KBA proceeding, is attached
with Chesley's Notice of Filing.
5
Case: 1:15-cv-00083-MRB
Admin. Office
0/ Courts,
361 S,W,3d 867, 872 (Ky. 2011) (for issue preclusion to apply, "the
issue in the second case must be the same as the issue in the first case" and must have been
"actually decided in that action"),
motion for summary judgment.
disputed issues of fact regarding Chesley's alleged role in the "joint enterprise" that preclude
summary judgment on the issue of whether Chesley can be held jointly and severally liable for
the other attorneys' conduct in which he took no part,
II.
Chesley was not permitted to take discovery in the ethics proceeding and thus
did not have a "full and fair opportunity to litigate the issues," as is required for
issue preclusion to apply.
'
In its August 1S\ Order this Court held - for the first time in Kentucky hi story - that
findings in an attorney disciplinary
proceeding
conclusively
issue preclusion cannot be applied in this case because Chesley was not permitted to take prehearing discovery in the ethics case ~ a fact the Court seemingly overlooks in its Order, Under
black letter law, even where the issues decided in an earlier proceeding are identical? to the
issues to be decided in a later action, issue preclusion "applies only if the party against whom it
is sought to be applied had a realistically full and fair opportunity to litigate the issue," Berrier v,
Bizer, 57 S,W.3d 271,281 (Ky, 2001),
-~---.-.---Chesley disagrees that the issues addressed in the ethics proceeding are the same as the issues raised by
Plaintiffs' breach of fiduciary duty claims, The Kentucky Rules of Professional Conduct explicitly state
that they are "not designed to be a basis for civil liability" and that violation of the ethics rules "should
not itself give rise to a cause of action against a lawyer nor should it create any presumption in such a
case that a legal duty has been breached," SCR 3,130 (XXI), Nevertheless, this motion is not directed at
that question, but whether - assuming the issues are identical- Chesley had a full and fair opportunity to
litigate the issues in the ethics proceeding.
6
7
The question is not whether the ethics proceeding was "fair" in its own context; lawyer
disciplinary proceedings are subject to unique procedures and serve a different purpose than civil
trials, That is why the Rules of Professional Conduct expressly say that they cannot form the
basis for civil liability, SCR 3,130 (XXI), Rather, the question is whether Chesley had sufficient
ability to litigate the issues in the ethics proceeding such that it is appropriate to adopt the
findings from the ethics proceedings as conclusively determined facts in this civil action, A civil
litigant's right and ability to obtain discovery is fundamental to the concept of a fair trial. That
notion is also reflected in the general rule that summary judgment is not to be granted against a
party who has not had ample time to complete discovery, Here - where Chesley has not had the
benefit of discovery in either case - it cannot be said that he had a full and fair opportunity to
litigate the issues, and summary judgment is premature,
It is axiomatic that in order to have a full and fair opportunity to litigate an issue, a party
must be given the opportunity to conduct discovery relating to that issue, A party's opportunity
and ability to gather evidence, to depose witnesses, and to obtain relevant documentary evidence
are essential to the concept of fairness in litigation,
pretrial discovery "helps to achieve a balanced search for the truth, which in turn helps to ensure
that trials are fair.i.." LaFleur v, Shoney's, Inc" 83 S,W.3d 474, 478 (Ky. 2002),
In the ethics proceeding, Chesley was denied the opportunity to conduct discovery, He
was not permitted to depose witnesses prior to their hearing testimony, He was not permitted to
serve requests for documents,
witnesses ._ could not be obtained because their criminal cases were still pending and they
invoked their Fifth Amendment rights." Now that their appeals are finished, those witnesses can
no longer refuse to testify, and can now be deposed.
In its Order, the Court concludes that "Chesley had a realistically full and fair opportunity
to present his case before the Trial Commissioner" based on the number of witnesses and
exhi bits presented in connection with the hearing. (Order at 4.) But the great majority of those
witnesses were called by the KBA and Chesley was not given an opportunity to depose any of
them prior to the hearing." Similarly, the number of exhibits submitted by Bar Counsel during
the hearing does not indicate that Chesley had a full and fair opportunity to litigate when he was
unable to conduct document discovery.
Chesley has also been denied a full and fair opportunity to take discovery in this case,
Discovery in this case was stayed for several years during the pendency of app~als, Chesley,
having been denied discovery in the ethics proceeding, asked the Court to lift the discovery stay
in this action, but the Court denied his motion. (Op. & Order Denying Mot. to Lift Disc. Stay
(Apr. 26, 2012).) Summary judgment jurisprudence recognizes the importance of allowing the
parties to have full discovery prior to rendering judgment.
837,841-42 (Ky. App. 2007) (Summary judgment "is proper only after the party opposing the
motion has been given ample opportunity to complete dlscovery...."), The Court's present Order
runs contrary to that rule by granting summary judgment to Plaintiffs based on findings in a
separate case in which Chesley had no ability to obtain discovery.
Conclusion
The issue of whether Chesley can be held jointly and severally liable as a matter of law
based on a "joint enterprise" theory - which was in no way addressed in the ethics proceeding ~..
Chesley unsuccessfully sought to postpone the disciplinary proceedings on that basis,
9 Of the 29 witnesses who testified live at the hearing (not including Chesley), 23 were called by the KBA
and Chesley did no! have an opportunity to depose them.
8
Chesley its holding with respect to Cunningham, Gallion, and Mills because it recognized that
Chesley's role differed from that of the other lawyers. There remain genuine issues of material
fact regarding the allegation that Chesley was a full partner in the "enterprise" among the other
lawyers and summary judgment is inappropriate.
Chesley was not afforded preheating discovery in the ethics proceeding and thus cannot
be said to have had a "full and fair opportunity" to litigate the issues in a manner that supports
issue preclusion in this civil action.
For these reasons, Chesley respectfully requests that the Court reconsider and alter,
amend,
01'
-------\-cf--~'-\"--\--
Sheryl G
Griffi
rrv-S imner (KBA No. 85799)
&
LUEDEKE
CERTIFICATE
OF SERVICE
It is hereby certified that a copy of the foregoing has been served via U,S, Mail (unless
otherwise indicated) this 11th day of August, 2014 on:
Mitzy 1. Evans
Evans Law Office
177 South Main Street
P,O. Box 608
Versailles, KY 40383
Michael R. Dowling
P.O, Box 1689
Ashland, KY 41105-1689
William T. Ramsey
Neul & Harwell, PLC
150 Fourth Avenue North, Suite 2000
Nashville, TN 37219
Mary E. Meade-McKenzie
105 Seahawk Drive
Midway, KY 40347
10
Case: 1:15-cv-00083-MRB
COMMONWEALTH OF KENTUCKY
BOON1~ CIRCUIT COURT
DIVISION III
CASE NO. 05"CI"436
MILDRED ABBOTT,
et al.
PLAINTIFFS
v.
DEFENDANTS
Please take notice that at the Court's regular motion hour on Tuesday, October 28,2014,
at 9:00 a.rn., or as soon thereafter as counsel may be heard, Defendant Stanley M. Chesley
("Chesley") will present the following Motion for the Court's consideration:
DEFENDANT STANLEY M. CHESLEY'S
MOTION TO CLARWY JUDGMENT
WITH RESPECT TO IDENTIFICATION OF PLAINTIFFS
AND AMOUNT AWARDED TO EACH PLAINTIFF
The Court's Amended Order, entered September 19, 2014, renders partial summary
judgment
against Chesley and in favor of "Plaintiffs" and awards an aggregate sum of $42
million. The Plaintiffs in this action, however, have been inconsistently identified in the record,
~;\Ii'11
tlwi it is impossible to precisely determine their identities -- which is essential for the
judgment to be effective. It also cannot be determined from the judgment or from the record the
precise amount awarded to each individual Plaintiff. Chesley respectfully requests that the Court
clarify the judgment by requiring Plaintiffs' counsel to me in the court record a definitive list
identifying, by first and last name, and by capacity (whether individual or representative), the
l'III'CI~t pwties plaintiff in this action and, for each Plaintiff, their individual share of the $42
million judgment.
Case: 1:15-cv-00083-MRB
01'
parties for and against whom the judgments contained are rendered,"
\I,
(190~) ("ln specifying the relief granted, the parties of and for whom it is given must, of course,
be sufficiently identified,") (citation omitted),
This case was initially filed as a putative class action on behalf of "all individuals who
were prescribed the diet drug Fen-Phon in Kentucky and were members of the class action filed
ill Boone County, Kentucky", styled Johnetta M_gore,et, AI, v, A H, Robins, ct. Al., 98-CI-795,"
:li~;(\ known us the Guard case,
named Plaintiffs (although only 36 were specifically described in the body of the Complaint),
Over the course of this action, Plaintiffs'
named Plaintiffs to the case.
Complaint, which removed all references to class allegations and class certification so that it
Slf\lt'<I
individuals as Plaintiffs, plus one name that appears in the caption only as "Jones."
"Revised
Summary
of Misappropriated
Settlement
Plaintiffs'
Fees," filed in
connection with the Eighth Amended Complaint, lists the Guard settlement funds received by
only 416 individuals,"
Including the various Complaints, Plaintiffs' Notice of Cross-Appeal
Court of Appeals, and Plaintiffs'
to the Kentucky
Court, Plaintiffs' counsel appears to have identified 463 separate individuals as Plaintiffs in this
action'
The Guard settlement included 431 individual plaintiffs." On the current record, there is
are currently
Plaintiffs in this action and beneficiaries of the Court's September 19, 2014 judgment,
absence of a definitive and reliable identification of the Plaintiffs'
In the
llatahley v,
UiS. 351 U,S, 173, 182 (1956) (in action by 30 plaintiffs for loss of horses, trial court's "lump
was inadequate
for appellate
for
class action; the Plaintiffs have only individual claims, The Court's judgment does not specify
the amount awarded to each Plaintiff and there is insufficient information in the record from
which to determine those amounts,
Judge Wehr as a "baseline"
Furthermore,
of the percentages
or amounts
awarded to each Plaintiff, it is impossible to calculate the amount of each Plaintiff's remaining
damages claims, if any.
-------_._
_--_-
..
Case: 1:15-cv-00083-MRB
Accordingly,
Doc
Chesley respectfully requests that the Court enter the attached Order,
requiring Plaintiffs to file a Designation of Parties Plaintiff that specifically identifies, by first
and last name, and by capacity (whether individual
01'
represented as a Plaintiff in this action and whose claims are included within the Court's
September 19,2014 judgment, and further identifies, for each Plaintiff, the portion of the $42
million award that relates to their individual claim.
Respectfully submitted,
7~~~),?~_
Sheryl O. Snyder (KBA No. 66290)
Griffin Terry Sumner (KBA No. 85799)
J. Kendrick Wells IV (KBA No. 90209)
FROST BROWN TODD LLC
CERTIFICATE
OF SERVICE
It is hereby certified that a copy of the foregoing has been served via U.S. Mail (unless
otherwise indicated) this ~~J<.lay of October, 2014 on:
Via electronic and U.S Mail
amford_@_\yindstreall).net
Angela M. Ford
Chevy Chase Plaza
836 Euclid Avenue, Suite 311
Lexington, KY 40502
Mitzy L. Evans
Evans Law Office
177 South Main Street
P.O. Box 608
Versailles, KY 40383
Michael R. Dowling
P.O. Box 1689
Ashland, KY 411051689
Willium T. Ramsey
Neal & Harwell, Pl.C
150 Fourth Avenue North, Suite 2000
Nashville, TN 37219
Mary E. Meade-Mckenzie
105 Seahawk Drive
Midway, KY 40347
_Z~'/~~"
Case: 1:15-cv-00083-MRB
APPENDIX A
List of individuals Identified, at various times, as Plaintiffs in Abbott v. Chesley
J
1.
2.
3.
4.
5.
6.
7.
8.
9.
1o.
I I.
12.
13.
14.
15.
16.
17.
18.
19.
20.
) I.
.2'2.
23.
24.
25.
26.
27.
28.
29.
30.
~II.
'.I).
33.
34.
35.
36.
37.
Mildred Abbott
Barbara Abel
Elizabeth Abney
Lisa Abraham
Pamela Abrams
Elizabeth Adams
Kathy Adams
Phyllis Adams
Ruby Adams
Ruby Adamson
Susan Adkins
Clantha Akers
Effie Alsip
Juanita Alton
Joann Alvey
Phyllis Applegate
Cindy Armstrong
Susan Arvin
Clara Atkinson
Karen Austin
I .inda Back
Jamie Bailey
Mary Ann Bailey
Vicki Bailey
Charlotte Baker
Charlotte Bakel' and David Walker on behalf of the Estate of Lane Walker
Jody Baldridge
Carla Baldwin
Sarah Balenovich on behalf of the Estate of' Edith Browning
Carol Barnes on behalf of the Estate of Danny Abney
Marilyn Barnes
Lee Bartley, JI'.
Teresa Baumgardener
Debra Bays-Plybon
Melissa Faye Beamon
Linda Beggs
Patricia Belcher
Derived from Plaintiffs' Complaint (Dec. 30, 2004), Fourth Amended Complaint (Dec. 4, 2006),
Amended Complaint (Aug. 3, 2007), Eighth Amended Complaint (Aug. 14, 2007), Notice of
Cross-Appeal (Oct. 23, 2007), and Motion for Discretionary Review (May 20,2011).
I
S0VClIlh
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
5'/.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
70.
7'7.
n.
79.
80.
81.
82.
83,
Leisa Belding
Eleanor Berry
Margie Berry
Margaret Bi ngham
Easter Bishop
Emma Black
Janice Blair
Sharon Blair
Carol Boggs
Lori Boone
Joie Botkins
Kathy Bowling
Angie Lynn Bowman
Virginia Braden
Ladonna Brame
James Branham
Kathy Branham
Ruby Branham
Blenda f3rflY
Norma Brewer
Vicki Brewer
Alma Brock
Glenna Brock-Powell
Peggy Broughton
Barbara Brown
Joyce Brown
Karen Brown
Sharon Brown
Deborah Browning
Nathaniel Brumfield on behalf of the Estate of Watha lee Brumfield
Billie Brumley
Linda Brumley
Kimberly Brummett
Teresa Bruner
Patricia Bryant
Christina Bucher
Leslie Bullock
Judy Bundy
Warren Burgess
Janice Burton
'I'ina Bush
Sherrie Butler
Donna Campbell
Loretta Canada (aka Loretta Campbell)
Bucl Cantrell
Linda Carr
2
84,
85,
86,
87,
88,
89,
90,
91,
92,
93,
94,
95,
9(J,
97,
98,
99.
100,
101.
102,
103,
104,
105,
10o.
1
m,
108,
109,
110,
111,
112,
113,
114,
115,
116,
117,
118,
119,
12(),
121,
122,
123,
124,
125,
126,
127,
128,
129,
Tonya Carter
Wallace Carter
Charlotte Cason
J .isa CuudiJi
Connie Sue Centers
Tony Childress
Gloria Clark
William Clark
Rosemary Click
Pamela Clift
Danielle Clore
Allen Coker
Judy Coleman
Shirley Coleman
Tara Coleman
Debra Collier
Margaret Collier
Opal Collins
Linda Colvin
Phyllis Combs
Carolyn Conley
James Cook
Ronnie Cook
Janet Coons-Greene
Georgia Coots
Mark Cornn
Sandra Cotton Gilley
Nadine Couch
Jo Ann Cox
Barbara Crain
Doris Creech
Deloris Criswell
Pamela Crowe
Joseph Crowley
Tracy Curtis
Doris Dabney
Darby Daniels
Kathy Daniels-Stephenson
Mary Daughtery
Betty Davidson on behalf of the Estate of Evelyn Jackson
Ginger Davidson-Gibson
EI izabeth Davis
Sandra Davis
Karen Dean
Bobbie Deaton
Jan Delaney
3
130.
131.
) 32.
133,
134.
135.
136.
137,
138.
139,
140.
14) ,
142,
143,
144.
145.
146.
147.
148,
149.
150.
) 51,
152.
) 53,
154,
155.
156,
157.
158,
159,
160.
)61,
162,
163,
164.
165.
166.
167.
168.
169.
170,
171.
172,
J 73.
174.
175.
Regina Despain
Judy Di1e
Gerry Dixon
A1 Doser
Belva Dotson
Teresa Duff
Linda Dunaway
Ynetta Eckert
Tami Edwards-Engle
Martha Elliot
Saundra Erp
Charlotte Estepp
Sarah Estes
Susan Ezell
Elizabeth Fannin
Janet Fentress
Haywood Ferguson on behalf of the Estate of Alma Ferguson
William Fitch on behalf of the Estate of Sheila Fitch
Vickie Flannery
Paul Floyd
Bernita Flynn
Rhonda Flynn Osburn
Berends Ford
Rhonda Franklin
Timothy Franklin
Mary Frazier
Essie Fredrick
Freda Frizzell
Beulah Fugate
Clara Fulks
Patricia Gaunce
Barbara Gay
Melissa Gayheart
Ken Gayheart
James Gibson on behalf of the Estate of Jessie Gibson
Joni Gibson
Tara Gifford
Gladys Gilbert
Stephanie Gist
Ruby Godbey
Eddie Golden
Debra Goode
Joyce Gordon
Patrick Graham
Tammy Grant
Amy Gray (aka Amy Grant)
4
Case: 1:15-cv-00083-MRB
176.
177.
178.
179.
180.
181.
182.
183.
184.
185.
186.
187.
188.
189.
190.
191.
1n.
193.
194.
195.
196.
197.
198.
199.
200.
201.
202.
203.
204.
205.
206.
207.
208.
209.
210.
211.
212.
211.
214.
215.
216.
217.
218.
219.
220.
221.
Donna Green
Sherry Green
Peggy Grigsby
Allie Hall
Geraldine Hall
Norma Hall
Renee Hall
Shannon Hall
Barbara Hampton
Rhonda Hancock
Leona Gail Handley
Joyce Hanley
Rebecca Harris
Debra Harrison
Diane Harrison
Joyce I lassler (aka Joy Hassler)
Yolanda Hayden
Barbara Heizer
Barbara Hellrnueller
Reva Helton
Wanda Helton
Bonnie Henderson
Gary Hendrickson
Vikki Henley
Vickie Henry
Marcus Highley
Charlene Hill
Karen Hillard
Janice Hilton
Linda Hinkle
Jacqueline Hocker
Gwen Holt
Tami Holt
Myra Hood
Vicky Hood
Lora Hoover
Evolyn Hopkins
Charlene I lorn
Mary Horning
Cloyd Hoskins
Linda Hoskins
Marilyn Howard
Mary Howard
Toloria Howard
Donna Howser
Charlotte Hughes
5
222,
223,
224.
225.
226,
227.
228,
229,
230,
231,
232,
233,
234,
235.
236.
237,
238,
239,
240,
241,
242,
243,
244.
245,
246,
247,
248.
249.
250.
251.
252.
253.
254.
255.
256.
257,
258.
259.
260,
261.
262.
263,
264,
265,
266,
267,
Marcia Hughes
Margie IIulsc
Sheila Humpreys
Margaret Hunt
Wanda Hunter
Brenda Hutchcraft
Lorene Hutcherson
Katherine Hutchison
James Ingram
Emma Ison
Della Jackson
Karina Jackson
Mary Jackson
Linda James
Lynn Jefcoat
Debbie Jeffrey
Gamet Johnson
Ernestine Leslie Johnstone (aka Ernestine Leslie Johnston)
Beulah Jones
Franklin Jones
GCl'l'Y Jones
Judy Jones
Kathy Jones
Linda Jones
Marlene Jones on behalf of the Estate of Loretta Emond Stidham
Stewart Jones
Troy Jones
Betty Jordan
Betty Kelly
April Keltner Nuxoll
Patricia Kennedy
Gerald King
Katherine King
Pattie Kitts
Betty Kluck
Lucille Krey
Bill Lady on behalf of the Estate of Mary Lady
Linda Larkins
Angela Lewis-Mullinnix
Emily Lewis
Beverly Little
Sandra Dee Littleton
Lois Lockard on behalf of the Estate of Lloyd Lockard
Linda Long
Sherry Long
Kathy Levan-Day
6
314.
315.
316.
317.
318.
319.
320.
321.
322.
323.
324.
325.
326.
327.
328.
329.
330.
331.
332.
333.
334.
335.
336.
337.
338.
339.
340.
341 .
342.
343.
344.
345.
346.
347.
348.
349.
350.
351.
352.
353.
354.
355.
356.
357.
358.
359.
Kathy Nolan
Sheila Nolan
Glenora Pace
Bertha Pack
Raymond Parker
Louverna Parks
Myrtle Parris
Jessie Parsons
Angela Peace
Judith Peck Wageman
Lisa Peek (aka Linda Peek)
Recie Pennington
Helen Perkins
Jeff Perkins
Joe Ann Perkins Spencer
Stacy Perkins
Joy Perry on behalf of the Estate of Milton Lewis
Doris Phelps
Norma Pickett
Sonja Pickett
Kathy Pollitte
Brian Powell
Mary P'pool (aka Mary P'poole)
Trona Preston
Suzanne Price
Rita Profitt-Norman
Lynne Pursel
Sharon Rainwater
Billie Reese
Brenda Rentas on behalf of the Estate of Anthony Rentas
Arlie Rhodes
Evelyn Rhodes
Raymond Riley
Levetta Riviera (aka Levetta Rivera)
Odena Roaden
Case: 1:15-cv-00083-MRB
360,
361.
362,
363,
364,
365,
366,
367,
368,
369.
370,
371.
372.
373.
374.
375.
376.
377.
378.
379.
380.
381.
382.
383.
384.
385.
386.
387.
388.
389.
390.
391.
392.
393.
394.
395.
396.
397.
398.
399.
400,
401.
402.
403.
404.
405.
Mary Sarns
Kathy Sands
Justus Scharold
Crystal Seals-Gibson
Maxine Seals
Claudia Sebastian-Shepard
Lisa Sexton
Monica Sexton
Terry Shanks
Margaret Sharon
Michelle Sharpe Roberts
Debra Shepherd
Janet Short
Linda Caudill on behalf of the Estate of Laureda Short
Monica Shuffett
Loretta Sidwell
Rosemary Simons
Ada Sizemore
April Slatten-Jones
Carole Slone
Barbara Smith
Elaine Smith
Freda Smith
Wesley Smith On behalf of the Estate of Sharon Smith
Peggy Spears
Cora Stapleton
Debbie Staton
Paul Stauffer
Corina Stearn
Connie Stephens
Nancy Stephens
Iva Stevens
Sharon Stevenson
Marlene Stewart
Betty Stone
Lesta Stout
Donna Strornowsky
Connie Sturgill
Shirley Sudduth on behalf of the Estate of Marjorie Sudduth
Pam Sulli van and Sharon Stephens on behalf of the Estate of Rebecca Lovell
Mildred Swanson
Lisa Swiger
Ella Tackett
Patty Tackett
Priscilla Tafolla
Charles Tapley
9
Case: 1:15-cv-00083-MRB
406.
407.
408.
409.
410.
411.
412.
413.
414.
415.
416.
417.
418.
419.
420.
421.
422.
423.
424.
(125,
426,
427.
428,
429,
430,
431,
432,
433,
434,
435,
436,
437.
438.
439.
440,
441.
442.
443,
444,
445,
(146.
447.
448.
449.
450.
451.
Ella Taylor
Linda Taylor
Mary Taylor
Jeanne Thomas (aka Joanna Thomas)
Elizabeth Thompson- Washburn
Karen Thompson McClain
Nancy Thompson
James G. Thurman
Lisa Grant Thurman
Steve Toller on behalf of the Estate of Linda Toler
Roy Toler
Elizabeth Trent
Jenny Trimble
Joetta Tucker
Deborah Turner
Drucilla Turner
Marie Turner
Patricia Turner
Valerie Turner
Linda Vance
Linda Vanarsdall-Collins
Debbie Vogt Schneider
Bobbie Walker
Loraine Wallen
Cindy Walters
Betty Ward on behalf of the Estate of Martin Ward
Wanda Watkins
Cheryl Watson
Irene Wells
Joyce GoffWeJls
Judy Whitaker
Kim White
Mary White
Patricia White
Catherine Whitlock
Joyce Whitt
Betty Widner (aka Betty Widener)
Peter Wilds
Carol Quisenberry Williams
Todd Williams on behalf of the Estate of Gloria Williams
Bethany Willinger
Geneva Wilson
Robert Wilson
Melody Winer
Connie Wolfe
Bill Wombles
10
452.
453.
454.
455.
456.
457.
458.
459.
460.
461,
462.
4 ()3.
11
COMMONWEALTH OF KENTUCKY
BOONE CIRCUIT COURT
DIVISION III
CASE NO, 05-CI-436
PLAINTIFFS
DEFENDANTS
ORDER
This matter having come before the Court on Defendant
("Chesley")
Motion
(0
Stanley M, Chesley's
considered the arguments of' counsel and being otherwise sufficiently advised:
IT IS HEREBY ORDERED THA T Chesley'S Motion is GRANTED,
IT IS FURTHER ORDERED THAT Plaintiffs shall file with the Court a "Designation
or
Paules Plaintiff" that shall specifically identify - by first and last name, and by capacity
(whether individual
01'
action and, for each Plaintiff so identified, list the amount of the $42 million judgment
represented by that Plaintiffs
IT IS FURTHER
individual claim,
Designation as provided above, if no other objection is raised, the Court's Amended Order
('Illncd
September 19,2014 shall be deemed to refer to the Plaintiffs and award damages, as to
Case: 1:15-cv-00083-MRB
Tendered by:
~~~
9?-'---~.
__
OF SERVICE
I hereby certify a copy of the foregoing Order was served by U.S. Mail this
,2014 to the following:
/\llgC/ll M, Ford
Chase Plaza
030 Eudid Avenue, Suite 3 J 1
Lexington, KY 40502
CIII'\,)1
William T. Ramsey
Neal & Harwell, PLe
150 Fourth Ave. North, Ste. 2000
Nashville, TN 37219
Mary E. Meade-Mckenzie
10) Svahawk Drive
{VI idw:I)" I( Y 40347
Mitzy L. Evans
Evans Law Office
177 South Main Street
P.O. Box 608
Versailles, KY 40383
Michael R. Dowling
P.O. Box J 689
Ashland, KY 411051689
Luther C. Conner, Jr.
504 N. Cross Street
P.O. Box 177
Albany, KY 42602
Sheryl G. Snyder
Griffin TelTY Sumner
FROST BROWN TODD LLC
OIIBOR705711~S
~8)~~6879263vl
day of
COMMONWEALTH OF KENTUCKY
BOONE CIRCUIT COURT
DIVISION III
CASE NO. 05-CI-436
PLAINTU'FS
v.
DEFENDANTS
counsel should tender a proposed judgment that provides the identities of the
judgment creditors and the amount awarded to each -- reduced by the amounts already recovered
from Messrs. Gallion, Cunningham and Mills.
Case: 1:15-cv-00083-MRB
1.
CR 60.02 provides that a court may "relieve a party." from its final judgment, order, or
proceeding"."
As with the
Court's September 19th Amended Order', the Second Amended Judgment is void because it does
not sufficiently identify the persons in whose favor judgment is being entered, nor is it possible
to determine their identities from the record.
HA judgment record or docket should afford definite and reliable information as to the
parties for and against whom the judgments contained in it arc rendered."
46 AM. JUR. 2D
------------I See Chesley's Motion to Clarify Judgment With Respect to Identification of Plaintiffs and Amount
Awarded to Each Plaintiff (Oct. 20, 2014).
2 PIs.' Complaint, '11 (Dec. 30, 2004).
Complaint, which removed all references to class allegations and class certification so that it
stated only individual claims by the named Plaintiffs.'
leave to file an Eighth Amended Complaint."
individuals as Plaintiffs, plus one name that appears in the caption only as "Jones." Plaintiffs'
"Revised Summary of Misappropriated
Fees," filed in
connection with the Eighth Amended Complaint, lists the Guard settlement funds received by
only 416 individuals.'
Including the various Complaints, Plaintiffs' Notice of Cross-Appeal to the Kentucky
Court of Appeals, and Plaintiffs' Motion for Discretionary Review to the Kentucky Supreme
Court, Plaintiffs' counsel appears to have identified 463 separate individuals as Plaintiffs in this
action. The Guard settlement included 431 individual plaintiffs." On the current record, there is
no way to reliably identify which of those individuals (or their representatives) are currently
Plainti ffs in this action and benef ciaries of the Court's September 19, 2014 judgment.
In the
absence of a definitive and reliable identification of the Plaintiffs' identities in the record, the
Court's September 19,2014 judgment is not sufficiently certain to be enforceable.
The judgment is also uncertain as to the amount awarded to each Plaintiff. Hatahley v,
US,, 351 U.S. 173,182 (1956) (in action by 30 plaintiffs for loss of horses, trial court's "lump
sum" award of damages was inadequate
apportionment of award among the individual plaintiffs), This case has not been certified as a
class action; the Plaintiffs have only individual claims. The Court's judgment does not specify
the amount awarded to each Plaintiff and there is insufficient information in the record from
which to determine those amounts.
Judge Wehr as a "baseline"
awarded to each Plaintiff; it is impossible to calculate the amount of each Plaintiffs remaining
damages claims, if any.
Accordingly, the Court should vacate its Second Amended Judgment as it is a void
judgment.
II.
Alternatively, the Court should vacate and re-enter the Second Amended Judgment
to permit Chesley's counsel to file a Rule 59 motion.
Due to an error by the Court's clerk, Chesley's counsel did not become aware of the
Second Amended Judgment until more than ten days after its entry. Chesley was thus deprived
of the opportunity to file a motion to vacate the judgment under Rule 59. CR 59.05 ("A motion
to alter or amend a judgment, or to vacate a judgment and enter a new one, shall be served not
later than 10 days after entry of the final judgment").
Court to vacate and re-enter that judgment to afford Chesley the procedural remedies provided
by the civil rules. See Kurtsinger v. Bd. of Trs. ofKy. Ret. Sys., 90 S.W.3d 454 (Ky. 2002).
In Kurtsinger, the trial court entered summary judgment in favor of the defendants and
the plaintiffs filed a motion to alter, amend Or vacate the order under Rule 59. The trial court
denied the motion, but notice of entry of the order was only sent to the defendants and not to the
plaintiffs.
The plaintiffs did not become aware of the ruling until more than 40 days later and,
upon learning of the order, the plaintiffs immediately filed a motion under CR 60.02 requesting
the trial COUItto vacate the order and reenter it as a new order to permit plaintiffs to file a timely
7
Case: 1:15-cv-00083-MRB
notice of appeal from the ruling. The trial court granted the motion and the Kentucky Supreme
Court affirmed, noting that CR 60.02 "is designed to allow trial courts a measure of flexibility to
achieve just results and thereby provides the trial court with extensive power to correct a
judgment."
[d. at 456 (citations and internal quotations omitted). The Supreme Court observed:
"The trial judge clearly believed himself or his office staff (not Appellants) to have been
culpable in the error that prevented Appellants from learning of entry of the June 29 order, and in
our view, CR 60.02 was adopted for such circumstances."
ld.
Likewise, hcre, the Court's Second Amended Judgment was 110tserved on Chesley and
Chesley's counsel, through no fault of their own, did not learn of the order until November 6th.
Accordingly, if the Court declines to vacate the Second Amended Judgment for the reasons set
forth above, Chesley requests in the alternative that the Court vacate and reenter the order to
preserve Chesley's right to file a motion under Rule 59.
Respectfully submitted,
:I-~~~
....
CERTIFICATE
OF SERVICE
It is hereby certified that a copy of the foregoing has been served via U.S. Mail (unless
otherwise indicated) this 10th day of November, 2014 on:
Mitzy L. Evans
Evans Law Office
177 South Main Street
P.O. Box 608
Versailles, KY 40383
Michael R. Dowling
P.O. Box 1689
Ashland, KY 41105-1689
William T. Ramsey
Neal & Harwell, PLC
150 Fourth Avenue North, Suite 2000
Nashville, TN 37219
Mary E. Meade-Mckenzie
105 Seahawk Drive
Midway, KY 40347
COMMONWEAL TH OF KENTUCKY
BOONE CIRCUIT COURT
DIVISION III
CASE NO. 05"CI"436
PLAINTIFFS
DEFENDANTS
ORDER
This matter having come before the Court on Defendant
Stanley M. Chesley's
("Chesley") Motion to Vacate Judgment Pursuant to CR 60.02, the Court having considered the
arguments of counsel and being otherwise sufficiently advised:
IT IS HEREBY ORDERED THAT Chesley's Motion is GRANTED.
IT IS FURTHER
ORDERED
Case: 1:15-cv-00083-MRB
~.itk
0,66290)
Griffin Terry Sumner ( A No, 85799)
J, Kendrick Wells IV (KBA No, 90209)
FROST BROWN TODD LLC
400 West Market Street, 32nd Floor
Louisville, KY 40202
Phone: (502)589-5400
Fax: (502) 581-1087
Frank V, Benton, IV (KBA No, 04705)
BENTON, BENTON
& LUEDEKE
CERTIFICATE
OF SERVICE
I hereby certify a copy of the foregoing Order was served by U,S, Mail this ~~..._. day of
~..__ ~__.... _, 2014 to the following:
Angela M, Ford
Chevy Chase Plaza
836 Euclid Avenue, Suite 311
Lexington, KY 40502
William T. Ramsey
Neal & Harwell, PLC
150 Fourth Ave, N orth, Ste. 2000
Nashville, TN 37219
Mary E, Meade-Mckenzie
105 Seahawk Dri ve
Midway, KY 40347
Mitzy L. Evans
Evans Law Office
177 South Main Street
P.O. Box 608
Versailles, KY 40383
Michael R, Dowling
P,O, Box 1689
Ashland, KY 41105-1689
Luther C, Conner, Jr.
504 N, Cross Street
P,O, Box 177
Albany, KY 42602
Sheryl G, Snyder
Griffin Terry Sumner
LLC
400 West Market Street, 32nd
Floor
Louisville, KY 40202
FROST BROWN TODD
Frank V, Benton, IV
BENTON, BENTON
& LUEDEKE
OII~O~7.0571145
4B32354,)II04vJ
Case: 1:15-cv-00083-MRB
COMMONWEALTH
OF KENTUCKY
BOONE CIRCUIT COURT
DIVISION III
CASE NO. 05CI()0436
MILDRED
ABBOTT, ct Ill.
PLAINTIFFS
v.
STANLEV M. CHESLEV,
et ul.
DEFENDA;\ITS
ORDER
This matter comes before the Court upon Defendant Stanley M. Chesley's Motion to
Reconsider and Vacate Order Chanting Partial Summary Judgment.
the memorandums
IT IS OHDERED
AND ADJUDGED
OF RECO~I)
Motion is DENIED.
Case: 1:15-cv-00083-MRB
/"!'
t I',' , 1-c I)
BOONE CII\CUIl,DISTRICT
COMMONWEALTH
OF KENTUCKY
BOONE CIRCUIT COURT
DIVISION III
CASE NO. 05-CI~004J6
MILDRED ABBOTT, et ai,
COUHT
NOV 2 ~, 2014
AV, CLERK
D.C.
PLAINTIFFS
V.
STANLEY M. CHESLEY,
et ai,
DEFENDANTS
ORDER
This matter is before the Court on Defendant Stanley M. Chesley's Motion to Clarify
Judgment With Respect to Identification of Plaintiffs and Amount Awarded to Each Plaintiff.
and on Defendant Stanley Nt. Chesley's
Court having reviewed the Motions and the memoranda filed by the parties. and having heard
from counsel, and being in all ways sufficiently
advised;
~,
Clarify Judgment With Respect to Identification of Plaintiffs and Amount Awarded to Each
Plaintitf is DENIED.
IT IS FlJRTHER ORDERED AND AD,JUDGED
DATED this
that Defendant
-dL_--
day 01 November,
2014.
Stanley M. Chesley's
Case: 1:15-cv-00083-MRB
COMMONWEAL TH OF KENTUCKY
BOONE CIRCUIT COURT
DIVISION III
CASE NO. 05CI-00436
PLAINTIFFS
V.
DEFENDANTS
This Court conducted a hearing in this matter on July 15, 2014 on Plaintiffs' Motion for
Partial Summary Judgment as to Defendant Stanley M. Chesley ("Chesley"). The Plaintiffs were
represented by Hon. Angela Ford. The Defendants were represented by Hon. Sheryl G. Snyder
and Hon, Frank V. Benton, IV. The
Response, Plaintiffs'
Reply, having heard argument from counsel, and being in all ways
Case: 1:15-cv-00083-MRB
severally liable with Gallion, Cunningham and Mills for the amounts owed to Plaintiffs, and that
Chesley disgorge all fees he collected in the Guard matter.
The Kentucky Bar Association instituted disciplinary proceedings relating to Chesley's
actions in the Guard matter in Kentucky Bar Association v. Chesley, KBA File 13785. The Trial
Commissioner conducted a hearing and found that Chesley had violated eight (8) different ethics
rules. The Trial Commissioner recommended that Chesley be permanently disbarred from the
practice of law in Kentucky, and that he pay $7,555,000.00 in restitution to the Guard case
clients.
Report. The
Supreme Court of Kentucky found Chesley guilty of violations of eight provisions of SCR 3.130
and followed the Board's recommendation that Chesley be permanently disbarred. The Supreme
Court did not order that Chesley pay restitution. Kentucky Bar Ass 'n v. Chesley, 393 S.W.3d 584
(Ky. 2013).
Plaintiffs argue that summary judgment is appropriate as to their breach of fiduciary duty
claims through the doctrine of issue preclusion or collateral estoppel. Issue preclusion would bind
Chesley to the factual and legal determinations made in the disciplinary proceedings before the
Trial Commissioner, the Board of Governors, and the Supreme Court of Kentucky regarding the
settlement of the Guard matter that resulted in his disbarment. Chesley disagrees.
The Trial Commissioner found, and the Supreme Court ratified, that Chesley violated the
following specific provisions of SCR 3.130:
SCR 3.130-1.5(a) by accepting over $20 million in attorney's fees, which exceeded the
amount established by client contracts and contracts with co-counsel, and which were otherwise
unreasonable.
SCR 3.130-1.5(c) by failing to provide clients with a written statement of the outcome of
the matter, as well as the remittance to the client and the method of its determination.
The
contractual contingency fee contracts for the clients were either for 30% or 33 1/3% plus expenses
of up to 3%. A 49% contingency fee was actually charged to the clients. Chesley's contractual
agreement with class counsel was for 21% of fees upon successful settlement of the case, which
should have been $12,941,638.46 and not the $20 million plus he received.
He was paid
Chesley was class counsel pursuant to his agreement with Gallion, Cunningham and
Mills and therefore had the same duties as them with regarding the requirements of SCR 3.1301.8(g).
SCR 3.130-3.3(a) by making a false statement of material fact to the tribunal.
.SCR 3.130-S.1(a) by making a false statement of material fact in connection with a
disciplinary matter.
SCR 3.) 30-S.3(c) (now SCR 3. 130-8.4(c by engaging in conduct involving dishonesty,
fraud, deceit or misrepresentation.
Issue preclusion, also known as collateral estoppel, "allows the use of an earlier judgment
by one not a party to the original action to preclude relitigation of matters litigated in the earlier
action." Miller v, Admin. Office of Courts. 361 S.W.3d 867 (Ky. 2011). A non-party in the former
action may assert res judicata, a close cousin to issue preclusion, against a party to the former
3
Case: 1:15-cv-00083-MRB Doc it: 9-6 Filed: 02/12/15 Page: 4 of 8 PAGEID it: 252
action as long as the party against whom res judicata is pleaded had a realistically full and fair
opportunity to present his case. Id. (quoting Moore v. Commonwealth. 94 S.W.2d 317 (Ky. 1997).
Additionally,
judicial capacity are entitled to the same res judicata effect as judgments of a court, finding that
they do. Ky. Bar Ass 'n v. Harris. 269 S.W.3d 414 (Ky. 2008).
Chesley's hearing before the Trial Commissioner was held November 5-6 and 12- 13,2009
before Judge Rod Messer and continued to September 13-15 and 20~24, 2010 before Judge
William L. Graham.
Gary, Esq., Frank Benton, IV, Esq., Scott Cox, Esq., Mark Miller, Esq., Sheryl Snyder, Esq. and
Hon. Susan Dlott. Prior to the hearing, the testimony of five out of state witnesses was provided
by video depositions, including 44 exhibits. During the several days the hearing was held, a total
of 43 witnesses gave testimony either in person or by deposition, with the Trial Commissioner
considering 124 exhibits.
submit briefs at the conclusion of the Hearing. The Court finds Chesley had a realistically full
and fair opportunity to present his case before the Trial Commissioner.
Certain elements must be met for issue preclusion to operate as a bar to further litigation:
"( 1) at least one party to be bound in the second case must have been a party in the first case; (2)
the issue in the second case must be the same issue as the first case; (3) the issue must have been
actually litigated; (4) the issue was actually decided in that action; and (5) the decision on the
issue in the prior action must have been necessary to the court's judgment and adverse to the party
to be bound." ld. quoting Yeoman v. Commonwealth Health Policy Bd. 983 S. W.2d 459 (Ky.
1998).
The Court finds these elements have been met with regard to Plaintiffs' Motion in this
matter and the findings in KBA v. Chesley. Chesley was a party bound by the KBA matter. The
facts and circumstances at issue in the instant Motion were those at issue in the KBA matter. The
facts and circumstances were litigated in the KBA matter before the Trial Commissioner at a
hearing held November 5-6 and 12-13,2009 and September 13-15 and 20-24, 2010, and reviewed
by the Board of Governors and the Supreme Court of Kentucky. The Trial Commissioner made
factual findings and legal conclusions, which were adverse to Chesley, and which were affirmed
by the Board of Governors and the Supreme Court of Kentucky, said facts being those at issue in
the instant Motion.
The factual findings and legal conclusions by the Trial Commissioner, the
Board of Governors and the Supreme Court of Kentucky were necessary for the outcome of the
KBA matter.
This Court finds Chesley is bound by the factual findings and legal conclusions in the
KBA matter.
Cunningham
The Supreme Court found that by entering into an agreement with Gallion,
and Mills, Chesley signed on as co-counsel and was one of the attorneys
responsibilities as Gallion, Cunningham and Mills, and the same responsibilities he would have
with any other client. Kentucky Bar Ass 'n v. Chesley. Chesley had the duty to know his fee
responsibilities to his clients, specifically that he was to receive no more than 21% of one-third of
the $200,450,000.00 settlement, $14,031,500.00.
The
Supreme Court found that Chesley knowingly participated in a scheme to skim millions of dollars
in excess attorney's fees from unknowing clients, and that he received and retained fees that he
knew were improperly taken.!d.
attempted to avoid conversation and correspondence that would expose his knowledge of the
5
Case: 1:15-cv-00083-MRB
nefarious schemes of his co-counsel. ld. This Court finds that no genuine issues of material fact
exist, and summary judgment is appropriate on Plaintiffs' Breach of Fiduciary claims.
Chesley
entered into an attorney-client relationship with the Plaintiffs in Guard. He breached his duty by
accepting excess fees in the amount of $6,465,621.81.
receive only a portion of the settlement monies they were entitled to.
Plaintiffs also asks the Court to order that Chesley is jointly and severally liable with
Gallion, Cunnigham
Kentucky affirmed Judge Wehr's finding in this matter that Gallion, Cunningham and Mills were
jointly and severally liable to Plaintiffs. The Supreme Court found that Gallion, Cunningham and
Mills breached attorney-client contracts and therefore joint and several liability is not precluded
by KRS 411.182.
The Supreme also found that by the manner in which Gallion, Cunnungham
and Mills combined their efforts in the Fen-Phen litigation, they engaged in a joint enterprise, or
joint adventure, an informal partnership existing for a limited purpose and duration, for which
joint and several liability is properly assessed under KRS 362.220. Abbott v. Chesley, 413 S.W.3d
589 (Ky. 2013).
The Supreme Court enumerated
agreement, express or implied, among the members of the group; (2) a common purpose to be
carried out by the group; (3) a community of pecuniary interest in that purpose among the
members; and (4) an equal right to a voice in the direction of the enterprise. Id. citing Huff v.
Rosenberg, Ky., 496 S.W.2d 352 (1973). The Supreme Court adopted the findings of the Trial
Commissioner
in KBA v. Chesley, and this Court found above that issue preclusion bars the
This Court now finds that no genuine issues of material fact exists, and as a matter of law
Chesley is jointly and severally liable with Gallion, Cunningham and Mills for the $42 million in
damages awarded the Plaintiffs against Gallion, Cunningham and Mills by this Court's Order of
August 7, 2007. Chesley signed on as co-counsel representing the Plaintiffs in the Guard matter
when he entered into his fee-division contract with Gallion, Cunningham and Mills. Chesley
shared the common purpose to be carried with Gallion, Cunningham and Mills. They agreed on
how they would share the work and how they would share the profits. Chesley maintained a
voice in the managerial control of the enterprise. The Court therefore finds that pursuant to KRS
362.220, Chesley is jointly and severally with Gallion, Cunningham and Mills for the damages
the Plaintiffs suffered.
IT IS HEREBY ORDERED AND ADJUDGED that Plaintiffs' Motion
THEREFORE,
for Partial Summary Judgment is GRANTED as to Plaintiffs' Breach of Fiduciary claims against
Stanley M. Chesley.
IT IS FURTHER HEREBY ORDERED AND ADJUDGED that Stanley M. Chesley is
jointly and severally liable with Defendants William J. Gallion, Shirley Allen Cunningham, Jr.
and Melbourne Mills, Jr. for the existing judgment amount of $42 million owed to Plaintiffs,
along with pre-judgment simple interest at a rate of 8% per annum from April I, 2002, and postjudgment interest compounded annually at the rate of )2% per annum thereon from the date of
this Judgment.
IT IS HEREBY
ORDERED
AND ADJUDGED
do r;ay
of October, 2014.
7
COPIES TO:
ALL ATTORNEYS OF RECORD
Plaintiff,
vs.
ORDER
This matter is before the Court on Defendant Angela M. Ford's Motion to Dismiss
the Complaint.
Having considered the arguments of the parties, the Court finds the
_
Honarable Michael R. Barrett,
United States District Judge
EXHIBIT
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
::1:
STANLEY M. CHESLEY,
Plaintiff,
vs.
ANGELA M. FORD, ESQ.
and
UNKNOWN RESPONDENTS,
Defendants.
Respectfully submitted,
Email: brian.sulliv..illl@dinsmore.com
christen.steiIule(a)dinsmore.com
Attorneysfor Defendant
AngelaM. Ford, Esq.
Case: 1:15-cv-00083-PCE
MEMORANDUM
I.
INSUPPORT
Introduction
According to an Ohio state court, the judgment creditors of Chesley, who hold a
valid and enforceable Kentucky judgment (the "Kentucky Judgment"), are prohibited
from enforcing this judgment, at some point in the future, if and when they come to
Ohio to domesticate their judgment against Chesley, even if they follow Ohio lawdespite the fact that there is no stay of enforcement of the judgment and Chesley has not
posted any bond of any kind.
impermissible.
Aside from the egregious nature of the orders at issue, they have already lapsed
under the time limits provided in Federal Rule of Civil Procedure 6S(b)(2). When Ford
removed this case to this Court, it became subject to federal law, including the provision
of Federal Rule of Civil Procedure 6S(b)(2) limiting the duration of temporary
restraining orders. Accordingly, the temporary restraining orders entered by the state
court expired, at the latest, 14 days after Ford removed this case.
Even if this Court were to determine that the orders did not dissolve by operation
of law, they are invalid for a multitude of reasons. As a threshold issue, Ohio courts lack
jurisdiction over Ford, and therefore have no power to enjoin her actions. The orders
also blatantly violate the Full Faith and Credit Clause of Constitution because they
conflict with a Kentucky judgment.
they provide Chesley with relief to which he is not entitled under Ohio law, while at the
same time prohibiting Ford from collecting a valid and enforceable Kentucky judgment
on behalf of her clients-even if she complies with Ohio law regarding the enforcement
of foreign judgments in Ohio. By the same token, the orders interfere with discovery
methods available to the judgment creditors under Kentucky law.
Most importantly, the Ohio state court never should have entered the orders
because Chesley cannot satisfy the relevant factors necessary for injunctive relief. There
is no irreparable harm, which is a dispositive factor requiring denial of injunctive relief.
The only thing at issue in this case is money-collection
Any possible future errors associated with the collection can be resolved through
monetary relief. Moreover, as demonstrated in Ford's Motion to Dismiss (Doc. 9),
Chesley has no chance of success on the merits of his Complaint.
Incredibly, the restraining orders were entered even though a Kentucky court has
already considered the issues raised in both Chesley's Complaint and his request for
injunctive relief.
attorney. Ford, seeking to prohibit her from enforcing the Kentucky Judgment on behalf
of her clients. And incredibly, the Ohio state court has rewarded Chesley's blatant endrun around the Kentucky court's rulings regarding its judgment and effectively granted
Chesley a stay of enforcement of a valid and enforceable Kentucky judgment. This Court
must either declare the restraining orders dissolved pursuant to Federal Rule of Civil
Procedure 6S(b)(2) or dissolve them as improper preliminary injunctions.
II.
Factual Background!
On January 6, 2015, Chesley filed a declaratory action seeking an Ohio court's
order that his judgment creditors could not move to enforce a valid and enforceable
Kentucky judgment in Ohio until they disclosed: (1) the identities of the judgment
creditors, (2) the amount remaining to be paid on the judgment, and (3) the details
related to previous collection activities on the judgment.
Complaint ("Chesley Compl."), at 11-12). Chesley requested such relief despite the fact
that he has not posted a supersedeas bond in Kentucky, which is required under
Kentucky law to stay enforcement of the judgment.
On January 7, 2015 (the day after Chesley filed this action), an Ohio state court
entered an ex parte restraining order. (Doe. 1-1 at 89-97, Ex Parte Order). On January
14, 2015, the court held a hearing at which Ford was not present.
Following that
hearing, the judge issued a second restraining order which, by its terms, lasts at least
until March 4, 2015.
restraining order entered by the Ohio state court states that Ford had "actual notice" of
the J anuary 14, 2015 hearing, it is important to note that neither Chesley's counsel nor
the Ohio state court had any intention of holding a hearing on Chesley's motion for
preliminary injunction on January 14, 2015. The electronic mail exchanges between
Ford and Chesley's counsel and between Chesley's counsel and another lawyer make
clear that Chesley and the Ohio state court wanted to postpone that hearing. (See Doc.
A detailed recitation of the factual background pertaining to this matter is set forth in Ford's
Motion to Dismiss. (Doc. 9). To avoid repetition, Ford incorporates this factual background as recited in
the Motion to Dismiss as if fully rewritten here and will only recite the facts pertaining specifically to the
court's imposition of the restraining order.
Case: 1:15-cv-00083-PCE
1-1at 102-05). Nobody expected Ford to appear or to present any evidence on January
14,2015
The second restraining order provides that "[ujntil further Court order to the
contrary or agreement of the Parties approved by the Court," Ford, any co-counsel, and
"any other Ohio lawyer representing any of the Unknown Respondents" are enjoined
from:
taking any action in the State of Ohio to enforce the Kentucky Judgment or
serving any Chesley asset related discovery on any Ohio resident, citizen or
domiciliary, except that discovery may be served on Chesley in any nonOhio jurisdiction if permitted by the rules applicable to that jurisdiction;
making any filing in any Ohio court that would be or could be part of an
effort to domesticate or register the Kentucky Judgment in Ohio;
taking any action to collect the Kentucky Judgment in the State of Ohio
from any Ohio resident, Ohio citizen or Ohio domiciled entity;
or secreting
[certain]
(Doc. 1-1, at 106-09, Restraining Order). Ford did not agree to any terms of the second
restraining order. (Doc. 1-1at 104).
Chesley certainly cannot dispute that the first order, entered ex parte, is a
temporary restraining order governed by Federal Rule of Civil Procedure 65(b). With
respect to the second order (drafted by Chesley's counsel, see Doc. 1-1 at 100, 104-05,
Affidavit of V. Mauer, at ~ 4 and Ex. C), it is also a temporary restraining order. It
specifically provides that it was to remain in effect pending a hearing whether to convert
it into a preliminary injunction. (Doc. 1-1at 108).
6
The state court entered the restraining orders despite the fact that the very issues
raised in this matter were already litigated before the Kentucky court. In fact, after
entry of the Kentucky Judgment, Chesley filed a motion to clarify the judgment and a
motion to vacate the judgment pursuant to Kentucky Rule of Civil Procedure 60.02. In
both of these motions he argued to the Kentucky court that before the judgment could
be enforced he was entitled to: (1) the identity of the plaintiffs in that action and (2) the
amount still remaining to be collected under the judgment.
(See
operation of Federal Rule of Civil Procedure 65(b) after 14 days elapsed from the
removal of this action from that court. Accordingly, this Court should enter an Order
declaring that they are dissolved so that nothing Ford does could be argued by Chesley
as being in contempt of those orders.
Even if this Court were to determine that the restraining orders did not dissolve
by operation of law because they were converted into a preliminary injunction, they
should still be dissolved because they are invalid. They are void for lack of personal
jurisdiction and as violative of the Full Faith and Credit Clause and other law.
Moreover, the orders do not meet the stringent requirements for entry of a preliminary
injunction.
7
A.
Once Ford removed this case to this Court, federal law, including the Federal
Rules of Civil Procedure, govern the proceedings in this Court. Fed. R. Civ. P. 81(C);
Granny Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423, 438 (1974).
Orders entered by the state court prior to removal generally remain in effect until they
are dissolved or modified by the district court. 28 U.S.C. 1450. However, temporary
restraining orders are subject to the time limitations of Federal Rule of Civil Procedure
65(b) and those orders expire, at the latest, 14 days after the date of removal. Granny
Goose Foods, 415 U.S. at 439-40; Biomedical Instrument
Cordis Corp., 797 F.2d 16, 18 (ist Cir. 1986).2 The date of removal is the date when the
notice is filed with the state court. 28 U.S.C. 1446(d); Anthony v. Runyon, 76 F.3d
210, 214 (8th Cir. 1986).
In this case, the notice of removal was filed with the state court on February 5,
2015, the same date the removal was filed in this Court. Federal Rule of Civil Procedure
65(b)(2) provides that the temporary restraining orders entered by the trial court prior
to Ford removing this case lapsed, at the latest, 14 days later, or February 19, 2015.
Although no extension would be warranted, Chesley did not request that this Court
extend those restraining orders prior to them expiring.
2
There is potentially some question as to whether this COUlt must affirmatively dissolve the
temporary restraining orders upon motion or whether the orders simply expire on their own by operation
of the rule. Granny Goose Foods suggests that they simply do not remain in force longer than the time
limitations of Federal Rule of Civil Procedure 65(b). 415 U.S. at 439-40; see also Carrabus v. Schneider,
111 F. Supp. zd 204, 211 (E.D.N.Y. 2000) (ruling that defendant's motion to vacate a temporary
restraining order filed after removal was moot because the order had expired). Biomedical Instrument
states that the district court "must dissolve any ex parte state court injunction or temporary restraining
order" after the time limits have expired, suggesting that a motion is required, but that it must be granted.
797 F.2d at 18 (emphasis in original).
It does not matter that Federal Rule of Civil Procedure 65 (b) purports to speak of
orders entered without notice and the second restraining order in this case purports to
be entered with actual notice to Ford. (Doc. 1-1at 106). The time limits of the rule still
apply when a temporary restraining order is issued on notice and in anticipation of a
preliminary injunction hearing. See Connell v. Dulien Steel Products, Inc., 240 F.2d
414, 417 (sth Cir. 1957); Riels v. Bank of Am., NA., No. 2:14cv57-KS-MTP, 2014 WL
4964185, at *2 (S.D. Miss. Oct. 3, 2014); Carrabus v. Schneider, 111F. Supp. zd 204,
210 (E.D.N.Y. 2000). The filing of a motion for a preliminary injunction in state court
prior to removal does not result in continuation of a temporary restraining order after
the case is removed. See Western Convenience Stores, Inc. v. Burger King Corp., No.
8:07CV270, 2007 WL 2682245, at *3 (D. Neb. Sept. 7, 2007); Carrabus, 111F. Supp. zd
at 210.
When Ford removed this case to this Court, the restraining orders were subject to
federal law, including the time limitations of Federal Rule of Civil Procedure 65(b)(2).
Accordingly, they expired, at the latest, 14 days after the removal, which was February
19, 2015. This Court must either declare them dissolved by operation of the rule or
dissolve them by this Motion.
B.
Ohio courts lack personal jurisdiction over Ford and she moved this Court to
dismiss this matter pursuant to Federal Rule of Civil Procedure 12(b)(2) for that reason.
(See Doc. 9 at 9-12). Ohio's long-arm statute does not allow for jurisdiction and the
exercise of jurisdiction over her does not meet the requirements of due process. (Id.).
Case: 1:15-cv-00083-PCE
Ford will not repeat those arguments here, but incorporates them from her Motion to
Dismiss as though fully set forth herein.
Tellingly, the Ohio state court never addressed the issue of jurisdiction in the
restraining orders. That court never made a factual finding that it had jurisdiction over
Ford. Indeed, it does not appear that it even considered the issue. Without jurisdiction
over Ford, the restraining orders are void. Accordingly, for these reasons and those set
forth in Ford's Motion to Dismiss, the restraining orders are invalid because Ohio lacks
jurisdiction over Ford.
C.
The Restraining Orders Violate the Full Faith and Credit Clause
of the United States Constitution.
The Full Faith and Credit Clause of the Constitution of the United States provides
that each State must give full faith and credit to the judicial proceedings of every other
State. U.S. Const., Art. IV, 1. If the state rendering a judgment has jurisdiction over
the defendant and the subject matter of the controversy, then the Full Faith and Credit
Clause "precludes an inquiry into the merits of the cause of action, the logic or
consistency of the decision, or the validity of the legal principles on which the judgment
is based." Milliken v. Meyer, 311 U.S. 457, 462 (1940). The judgment is entitled to "the
credit which it has in the State from which it is taken, not the credit that under other
circumstances and conditions it might have had." Morris v. Jones, 329 U.S. 545, 550-51
(1947). In other words, the foreign judgment is not subject to collateral attack in the
enforcing jurisdiction so long as the foreign court had personal and subject matter
jurisdiction.
The restraining orders expressly violate the Full Faith and Credit Clause. Chesley
does not challenge the Kentucky court's jurisdiction in entering the judgment against
10
him, nor does he allege fraud. As such, Ohio has no choice but to acknowledge and
enforce the Kentucky Judgment as a valid judgment subject to full faith and credit. But
instead, the restraining orders specifically stay enforcement and call into question
whether additional information is needed for enforcement of the Kentucky Judgment,
even though the Kentucky court has already decided this exact same issue. Not only do
the restraining orders completely disregard the Kentucky court's rulings on Kentucky
law and as to the validity of the Kentucky Judgment, they challenge the enforceability of
the judgment. This is not permitted. Accordingly, the restraining orders violate the Full
Faith and Credit Clause and must be dissolved.
D.
An injunction should be narrowly tailored to give only the relief to which the
plaintiff is entitled.
Here, the
matter what-until
11
Case: 1:15-cv-00083-PCE
Doc #: 13 Filed:
Moreover, Chesley knows the amount of the judgment, as it is set forth expressly
in the judgment entry. (Doc. 9-6 at 7). This is the judgment that will be filed in Ohionot an amended judgment which accounts for previous amounts collected. Chesley's
demand for the amount remaining to be paid on this judgment is not based on any Ohio
authority.
domesticating the judgment. Chesley has provided no authority for the proposition that
an Ohio court may amend a valid judgment from a sister state. Thus, the restraining
orders grant Chesley relief to which he is not entitled.
More disconcerting is that the restraining orders restrain Ford from engaging in
activities on behalf of her clients she is legally permitted to do. The Kentucky Judgment
is a final, enforceable judgment as a matter of Kentucky law. Enforcement has not been
stayed, and Chesley has not posted the required bond to stay enforcement.
Legally,
Ford has the right, on behalf of her clients, to enforce the judgment in compliance with
Ohio law.
But per the restraining orders, even if Ford were to comply with Ohio law, she
would be prohibited from domesticating the Kentucky Judgment on behalf of her clients
and beginning collection efforts. So the restraining orders preclude Ford from enforcing
a valid and enforceable judgment, even if she follows the law, and it protects Chesley
from enforcement, even though he has not availed himself of the legal remedies to delay
enforcement. The restraining orders cannot stand.
E.
Similarly, the orders prohibit Ford from taking actions which she is otherwise
permitted to take under Kentucky law. Under Kentucky Rule of Civil Procedure 69.03,
12
Case: 1:15-cv-00083-PCE
Doc #: 13 Filed:
Ford, on behalf of her clients, is permitted to "obtain discovery from any person,
including [Chesley], in the manner provided in these Rules." To the extent that the
Unknown Respondents instruct Ford to issue discovery or subpoenas to parties in Ohio,
Revised Code section 2319.09 provides the mechanism to do so. See R.C. 2319.09;
Thomas v. Wade Rome, 8th Dist. Cuyahoga No. 99679, 2013-0hio-4046,
~ 12
(recognizing that R.C. 2319.09 permits the enforcement of foreign discovery orders
requiring the production of documents, including subpoenas).
Thus, the Kentucky Rules of Civil Procedure permit Ford to issue discovery,
including subpoenas,
enforcement mechanism for this discovery. Yet the orders prohibit the issuance of any
discovery to Ohio residents.
dissolved.
F.
The state court orders in this case (Doc. 1-1 at 89-97, 106-09) are temporary
restraining orders governed by the provisions of Federal Rule of Civil Procedure 6S(b).
It does not matter that the second order purports to be entered with actual notice to
continued for almost a year after the plaintiff obtained it) (quoting Simms v. Greene,
160 F.2d 512, 517 (gd Cir. 1947)). A preliminary injunction is also appealable as an
interlocutory order pursuant to 28 U.S.C. 1292. However, orders that are only
effective for a short period of time remain temporary restraining orders. Connell,
240
F.2d at 418.
In this case there can be no question that the first state court order was a
temporary restraining order as it was entered ex parte with no prior notice to Ford. The
second order likewise was a temporary restraining order. It was expressly entered in
anticipation of a hearing on whether to enter a preliminary injunction. (Doc. 1-1at 108).
Even extending to March 4, 2015, it did not continue for a "substantial length of time."
Ford was not left to guess at its duration. Hudson, 3 F.3d at 975 (quoting Granny Goose
Foods, Inc. v. Brotherhood
of Teamsters,
Consequently, the second order was also a temporary restraining order and was subject
to the time limitations of Federal Rule of Civil Procedure 65(b).
However, even if this Court determined that the second order was converted to a
preliminary injunction, it still should be dissolved.
14
these circumstances
is entirely inappropriate.
relief weighs in
of injunctive relief in
dissolved.
1.
"A plaintiffs
Harm.
injunction
by monetary
damages."
is irreparable
Overstreet v. Lexington-
Fayette Urban County Government, 305 F.3d 566, 578 (6th Cir. 2(02).
money damages will suffice, an injunction
Fisher v. Bower, 79
adequate
interpose
by the extraordinary
injunction.").
But when
Additionally,
remedy of injunction.
injunction
must show
Abney v. Amgen, Inc., 443 F.3d 540, 552 (6th Cir. 2(06) (quoting Monsanto Co. v.
Manning, 841 F.2d 1126 (6th Cir. 1998)).
Importantly,
"[r ]esumption
of collection
irreparable
harm."
activity during
the pendency
of an
No. 03-65561, 2005 Bankr. LEXIS 2899, at *11 (Bankr. S.D. Ohio .Iuly 13, 2(05);:l see
also Dornik v. Maurice (In re Maurice), 167 B.R. 136, 138 (Bankr, N.D. 111.1994)("lt is
not irreparably
A motion to stay pending appeal in a bankruptcy case is analyzed by using the same factors which
govern award of a temporary restraining order or preliminary injunctive relief. See Barna v. Haas (In re
Haas), 292 B.R. 167, 180-81 (Bankr. S.D. Ohio 2003).
:3
15
occurs, and an amount in excess of the Kentucky Judgment is recovered, those amounts
can be repaid. Thus, the harms identified by Chesley are fully compensable through a
monetary remedy. Accordingly, Chesley cannot establish irreparable harm as required
for injunctive relief.
2.
For the reasons set forth in Ford's Motion to Dismiss (Doc. 9), Chesley has no
likelihood of success on the merits of his claims. Ford incorporates the arguments
asserted in her Motion to Dismiss as if fully rewritten herein.
3.
The remaining factors also weigh against imposing injunctive relief against Ford.
The order denies Ford's clients the right to collect a valid, enforceable, final judgmenteven if they follow Ohio law. Furthermore, the public interest factor weighs against
injunctive relief. There is strong public interest in final judgments and in recognizing
and respecting judgments issued by other states. That interest is protected by the Full
Faith and Credit Clause of the United States Constitution. U.S. Const., Art. IV, 1. The
16
restraining orders disregard the decisions of a sister state's court and purport to cast
doubt on an otherwise valid and enforceable judgment.
IV.
Conclusion
For any and all of the foregoing reasons, this Court should dissolve the
IslBrian S. Sullivan
747898Jv2
17
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 1 of 114 PAGEID #: 287
EXHIBIT A
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26115 Page: 2 of 114 PAGEID #: 288
STANLEY M. CHESLEY,
Plaintiff,
vs.
II~III\II~
DI09474046
Clerk of Courts
Court of Common Pleas
Hamilton County, Ohio
Please take notice that on this day Defendant Angela M. Ford, Esq. filed in the
office of the Clerk of the United States District Court for the Southern District of Ohio,
her Notice of Removal of this action from the Hamilton County Court of Common Pleas.
A copy of the Notice of Removal, together with all process, pleadings,
and orders
reflected on this Court's docket, which have been served on the parties, is attached
hereto as Exhibit A.
Respectfully submitted,
EXHIBIT A
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 3 of 114 PAGEID #: 289
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing has been duly served by electronic
mail this 5th day of February, 2015 to:
Vincent E. Mauer, Esq.
FROST BROWN TODD LLC
3300 Great American Tower
3D1F. Pourth Street
Cincinnati, Ohio 45202
vmauer(mfbtlaw.com
Attorneq for Plaintiff
MlJ.rian S. Sullivan
7451518vI
:2
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 4 of 114 PAGEID #: 290
vs.
ANGELA M. "FORD,ESQ.
and
UNKNOWN l(ESPONDENTS,
Defendants.
NOTICE OF REMOVAL
Pursuant to 28 U.S.C. 1441 and 1446, Defendant Angela M. Ford, Esq. ("Ford")
gives Notice of Removal of this action to the United States District Court for the Southern
District of Ohio from the Court of Common Pleas of Hamilton County, Ohio. In support of
this Notice of Removal, Ford states the following:
1.
this action by filing a Complaint in the Court of Common Pleas of Hamilton County, Ohio,
as Case No. A1500067. The Complaint is for declaratory judgment and injunctive relief
pertaining to Ford's actions in collecting a valid Kentucky judgment. Ford has not yet been
formally served with the Complaint and summons, but she received a copy of the
Complaint via electronic mail on January 7,2015.
2.
3.
citizen of Kentucky.
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 5 of 114 PAGEID #: 291
5.
As reflected
in Plaintiff's Complaint,
the remaining
Defendants are
complete diversity for purposes of removal. See 28 U,S.C. 1441(b)(1) C'In determining
whether a civil action is removable on the basis of the jurisdiction under section 1332(a) of
this title, the citizenship of defendants sued under fictitious names shall be disregarded. ''),
7,
where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest
and costs, is between citizens of different states (28 U.S.C. ]332), and none of the parties
in interest properly joined and served as Defendants is a citizen of Ohio (28 U.S.C.
1441(1))).
9.
io.
Notice of Removal, Ford is serving a COpyof such Notice upon all named parties, and a
copy of this Notice is being filed with the Clerk of the Court of Common Pleas of Hamilton
County, Ohio.
n.
This Notice of Removal is timely, having been filed within thirty (30) days of
Case: 1:15-cv-00083-PCE
Respectfully submitted,
/sl Brian S. Sullivan
Brian S. Sullivan, Esq. (0040219)
Christen M. Steimle, Esq. (0086592)
DINSMORE
CERTIFICATE OF SERVICE
r hereby certify that a true and accurate copy of the foregoing was served upon
the following via electronic mail and the Court's CM/ECF filing system, this 5th day of
February, 2015:
Vincent E. Mauer, Esq.
FROST BROWN TODD LLC
3300 Great American Tower
301 F. fourth Street
Cincinnati, Ohio 45202
vmmI~r 01.fhll.nYL..c.Q..!I!
Attar'ney for Plaintiff
Is/Brian S. Sulliv(!.n~
name.Er-rort
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 7 of 114 PAGEID #: 293
Judge Ruehlman
v.
VERIFIED
PETITION FOR DECLARATORY
.JUDGMENT AND INJDNCTIVE
RJi;LlJi:J.i'
COMES NOW Petitioner Mr. Stanley M. Chesley ("Chesley"), through tile undersigned
counsel, who in support of this petition states as follows:
SUMMARY OF PROCEEDING
Chesley finds himself in a bizarre sltuation - subject
(0
court the current total amount of which is unknown and which is owed to a list of approximately
400 persons thnt has not been updated in over-t 0 years. Given the virtual certainty that at least
one of those persons died
01'
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assets, are in Ohio, the only w<ly Ford call recover from Chesley is by coming to Ohio and
invoking this Court's jurisdiction and assistance.
In the same
I1HlI\lICI',
whom Chesley hils some affiliation is to come to Ohio and invoke this Court's jurisdiction and
assistance.
Hence, the filing of this case by Chesley to assure that a modicum of fairness prevails ill
respect
10
Ford's collection efforts so that the rights and Interests of Chesley and third parties
this action, the rights of Chesley find others will be Irreparably harmed.
Accordlngly,
Chesley seeks a declaration tllnt Ford and any other counsel acting
01'
OIl
then enforce using Ohio courts, subpoenas, sheriffs and laws a Kentucky judgment against
Chesley without first disclosing to this Court and Chesley (i) the actual total amount now owed
011
thut judgment, (ii) exactly what persons or entities are currently entitled to collect that
judgment
and (iii) the amount owed to each specific judgment creditor after credit for the
amounts distributed by Ford and amounts retained by Ford us her fee. Ford's failure
provide this information
01'
refusal
10
implementation of Ohio public policy imperntives, (c) deprives Chesley of valuable rights, (d)
deprives the judgment creditors of their rights, (c) impairs the rights of other third parties from
whom,
01'
The post-judgment
discovery that
Ford has served on Chesley ill Kentucky seeks to obtain from Chesley
to tlnrd parties (almost all of whom arc Ohio domiciles) in all aucmpt to
rules and deprive those Ihird parties of the protections to which they ore afforded by Ohio
the applicuble
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I IFI 11\1500067
I CONftRMI\TIONNUM8En38336?
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obligations to her clients who me the judgment creditors, and (g) could prevent courts in Ohio
unci Kentucky from making informed decisions on certain issues that may arise in this matter,
INTRODUCTION
1.
Chesley is a resident of Hamilton County, Ohio as are his wife and certain other
persons and entities against which Ford has threatened to issue subpoenas and from whom Ford
has threatened to seek the recovery of assests. Venue of this mailer is appropriate in this Court.
2.
Mildred Abbott et al. v. Stanley M. Chesley, et al. Boone County Kentucky CirCUlICourt Case
No. 05CI00436 (the "Abbott Case"). Some or all of the Abbott Case plaintiffs are Chesley's
judgment creditors and are the "Unknown Respondents" herein.
with Ohio consistent with thi s Com!' s appropriate exercise of personal jurisdiction over F 01'<.1.
3.
On October 22, 2014 the Boone County, Kentucky Circuit Court ("Boone Circuit
Court") entered a Second Amended Judgment against Chesley in the Abbott Case (the "Chesley
Judgment"). The Chesley Judgment incorrectly purports to impose on Chesley joint and several
liability with three other individuals who suffered a prior judgment in the Abbott Case. The
Chesley Judgment is based solely on tile principal of collaterul estoppel and holds that the
Kentucky Supreme Court decided all the factual issues necessary to establish Chesley's liability
to the Abbott Case plaint! ffs when the Kentucky Supreme Court considered disciplinary action
against Chesley. See Exhibit A. Chesley disagrees with this conclusion.
4.
Court
or
Chesley has exercised his righl to appeal the Chesley Judgment to the Kentucky
Appeals and Chesley expects the Chesley Judgment to be reversed.
Chesley's
confidence is based ill pari on lite fact thu! ill 2014 Judge Schrand of tbe Boone Circuit Court
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 10 of 114 PAGEID #: 296
crocheted together Chesley and (he Criminal Defendants (defined below) but (i) Judge Wehr of
that same court previously said, "[tjhe rntionale of the previously entered partial summary
judgment [against the Criminal Defendants] does not apply to" Chesley and (ii) the Kentucky
Court of Appeals agreed when it refused to equate Chesley with the Criminal Defendants in2011
and (iii) the 2013 Kentucky Supreme Court's AMoII v. Chesley decision agreed:
Appellants also contend thut the joint and several liability of COM [the Criminal
Defendants) should extend to Chesley because he acted ill concert with COM.
We decline the invitation to do so. ... Chesley's role ill (he enterprise clearly
differed from tilat of Cunuingham, Gallion, 01' Mills. The agreement itself seems
to trent him differently.
Judge Schrand's decision against Chesley is a clear outlier.
5.
Of
agrees with any particular finding of fact and conclusion of law that led to the Chesley Judgment.
Inter alia, Chesley disputes the Chesley Judgment's holding that he is jointly and severally liable
with the Criminal Defendants
wherein Ford and (he Doone Circuit Court conflated the Issues In a disciplinary matter and those
in the Abbott Case,
II civil
011
Instead, Judge Schrand summarily applied collateral estoppel in the Abbott Casco
6.
liable judgment
Defendants") were accused of federal crimes for their actions that form the basis of the Abbott
Case, For that reason, tile August 2007 j udgment against those three persons in the Abbott Case
is referred to herein
I\S
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After entry of the 2007 Criminal Defendants Judgment, but prior to the entry of
the Chesley Judgment, Ford and her co-counsel collected many millions of dollars from the
Criminal Defendants. As a matter of law, the gross amount of those collections must be credited
against the Criminal Defendants
Reducing the Criminal Defendants Judgment will simultaneously reduce the amount of the
Chesley Judgment since the Boone Circuit Court held Chesley jointly and severally liable for the
same $42,000,000 in damages owed by the Criminal Defendants to the Abbott Case plaintiffs,
8.
seven years after entry of the Criminal Defendants Judgment, the stated amount of the 2014
Chesley Judgment is also $42,000,000 plus 8% prejudgment interest and 12% post judgment
interest.)
Ford Iailed to disclose to the Boone Circuit Court the amount collected against the
a'iminal Defendants Judgment; so the Boone Circuit COUItmade no adjustment when it entered
the stated amount of the Chesley Judgment.
9.
crimtnal case heard by the United States District Court of the Eastern District of Kentucky
Criminal Case No, 07-39- WOH (the "Criminal Case").
us the
Chesley's counsel was nOI involved In rhe determtnatiou of the S42,OOO,OOOamount because il was first
deternilned ill a sununary judgment motior: ngninst the Criminal f)efeHdanw not Chesley.
) The $42,000,000 amount (i) is H calculatlon relating to the Crintinul Defendants aud not Chesley, (ii) is wholly
disconnected from any funds Chesley received, and (iii) fails to reconcile the fOCi thai the Kentucky Supreme COUlt
suggested thAI the rnnxlmum judgment to which Chesley would be $6,465,621.87, the "worst case" amount by
\\'Itich Chesley wns overpaid in the Settled Case.
1 IFI
1 A 1500067
Case: 1:15-cv-00083-PCE
10.
Upon information and belief, Chesley asserts (hat Ford squandered some of the
fUJ1d~ collected from the Criminal Defendants and said funds Were not prudently disbursed,
properly accounted 1'01'01' applied
(0
Examples include:
(iii) The Criminal Case victims included 14 known persons who were not Abbott
Case plaintiffs.
As the Victims Advocate, Ford accepted duties to those 14
persons. To meet he!' duties to those 14 persons, Ford diverted funds from the
Abbott Case plaintiffs into an escrow account for the potential benefit of those 14
persons.
11.
The Criminal Defendants Judgment must be reduced by the total gross value of all
01'
otherwise acquired
01'
Criminal Defendants Judgment at the time (hose assets were seized by Ford or her co-counsel
regardless of (i)
filly
operating losses suffered by the recetvership, (ii) the reduced amount for
which (hose assets were sold after the receivership was rennlmted
liquidated, (iii) the alleged loss of any funds call sed by Ford's co-counsel, (iv) (he diversion of
funds from the Abbott Case plaintiffs to persons who were Criminal Case victims but not Abbott
Case plaintiffs, or (v) tile retention of funds by Ford or her co-counsel." Those legally required
reductions should have been appl led to the opening $42,000,000 amount before the Chesley
Judgment was entered. As applied to Chesley, the $42,000,000 judgment amount is a guess,
nn
funds collected by Ford but not disbursed to the Abbott Cnsc plaintilYs reduce the amount owed
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 13 of 114 PAGEID #: 299
12.
(the "Criminals"),
were convicted by (he United Stares District Court for the Ens (ern District of Kentucky, and
ordered
10
pay restitution to their victims, most of whom arc Abbott Case plaintiffs.
Forfeiture
of certain assets was also ordered in the Criminal Case. Credit against the Criminal Defendants
Judgment and therefore the Chesley Judgment must to be given for all amounts paid to the
Abbott Case plaintiffs as restitution or from forfeited assets.
13.
011
distributions made in the Criminal Case. Despite numerous requests, Ford has refused to provide
to Chesley an accurate accounting of all funds that are legally
10 be
Judgment, including any and all amounts, including but not limited to (hose described above that
were not paid to the Abbott Case plaintiffs,
J 4.
Reductions
Judgment
Judgment in the some amount because the 2014 Chesley Judgment is based on (he amount of the
2007 Criminal Defendants Judgment and the Chesley Judgment is explicitly "joint and several"
with the Criminal Defendants Judgment,
15.
Chesley an accurate accounting or the pre-judgment and post-judgment interest that Ford alleges
has accrued and is accruing under the Chesley Judgment.
accruing interest must be adjusted downward each time Ford made assets seizures that reduce the
$42,000,000 principal balance of the Criminal Defendants Judgment.
and/or accruing interest must also be adjusted downward
(0
1455
Case: 1:15-cv-00083-PCE
16,
The pre-judgment interest rote is one-third lower than the post judgment interest
rate (8% versus 12%), Because 'he Criminal Defendants Judgment was entered ill 2007 tllld the
Chesley Judgment
WEtS
Oil
the
Criminal Defendants Judgment at the higher post-judgment rule of 12% while, as to Chesley, the
pre-judgment 8% interest rate applies, Ford must account for this 7 year discrepancy.
FORD AVOIDS HER ETHICAL OBLIGATIONS
17.
Various filings in the Abbott Case and certain filings in the Criminal Case
disagree with respect to the number and identity of the Abbott Case plaintiffs. The "Plaintiffs"
in the Abbott Case are the stated beneficiaries of the Chesley Judgment and are real parties ill
interest in this proceeding - the Unknown Respondents. See Exhibit A. Despite requests, Ford
has refused to provide to Chesley (i) an exact number of Abbott Case plaintiffs who are
Chesley's creditors, (ii) the name of elicit current judgment creditor, (iii) lin address for each
current Judgment creditor, and (iv) the amount owed to each current judgment creditor after the
distributions of'mllllons dollars to those persons in the Abbott Case and the Criminal Case'
18.
For purposes of this Petition, Chesley has Iisted as respondents herein (In
unknown number of June Doe and John Doe persons or entities (e.g. bankruptcy estates or
estates of deceased Abbott Case plaintiffs).
(0
SO
this action.
Public policy in Ohio and Kentucky both promote the settlement of litigation.
Without knowing the identity of the Unknown Respondents and the current amount owed
Idenlifying the curren I judgment creditors lind the III1H,Hln1 nnw owed each after all proper credits is the most
fundamental clement of u valid judgment. The danger of IIIlowing Ford 10 proceed ill Ohio to collect on the Chesley
Judgment \\'11110111 Ilr st providing this basic iuformation is readily apparent: for exarup!c, if Chesley were Inclined to
consider IlIn~illg any rensnnable settlement offers and if some of Ihe Unknown Respondents wanted to accept, 10
whom would he make 1113tcheck payable and from whoin would he obtain a release or satisfaction of'judgmcnl?
l
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 15 of 114 PAGEID #: 301
cannot
20.
made by Chesley so that those clients can exercise their individual right to accept or reject that
offer,
concerning any
settlement offer made by Chesley so that any particular client can knowingly exercise his or her
right to accept
01'
Unknown Respondents and the amount owed to each of them protects Ford from tile compl icated
work of communicating settlement offers to specific individual cli~nts and advising each of them
individually
011
Ford made several filings in the Criminal Case and in the Sixth Circuit Court of
21.
Appeals seeking to keep from Chesley (i) the total value of assets seized
Criminal Defendants Judgment,
011
account of the
(it) the names and addresses of her clients, (iii) the amounts
distributed to those clients, and (iv) the amount of money she collected that was not distributed
to her clients.
22.
Ford's refusal 10 provide requested information to Chesley (i) impairs Ohio and
Kentucky's
public policy that favors settlements, (ii) deprives Ford's individual clients of the
potential opportunity to receive lind consider settlement offers Irom Chesley, (iii) avoids ford's
obligation to commuulcate
valuable rights and (v) deprives courts ill Kentucky and Ohio of information they may need to
handle certain issues that may urise in connection with this matter.
23.
Ford's actions threaten the rights of third punies in Ohio who Ford lias stated she
intends to depose and whose rlghts Ford has attempted to violate by seeking their private
6 The i\bbolt Case is iI "m;1SS action" ~!ld nOI a class action proceeding.
14:55 I
1"1
Case: 1:15-cv-00083-PCE
financial documents and information from Chesley rather than by pursuing the proper procedural
mechanism for obtaining the information directly from this third parties - n process that would
require Ford to come to Ohio invoke the jurisdiction
subpoenas, and at the same time, afford those third parties the opportunity to protect themselves
and their information under the auspices of the Ohio courts.
24.
Since Chesley was not a judgment debtor until October 22, 2014, Chesley had
110
significant opportunity to participate in any of the above-described actions in the Abbott Case or
the Criminal Case that created all the necessary adjustments to the amount owed on the Criminal
Defendants Judgment and, consequently, the Chesley Judgment.
fOIUl THREATENS ACTION THAT WILL CAUSg HARM
25.
The "res" in this matter, Chesley's assets, if any, are in Ohio not in Kentucky.
Chesley does not have significant assets in tile Commonwealth of Kentucky that are subject to
seizure for collection
Oil
Judgment ill the State of Ohio and lake collection action on assets located in the State of Ohio.
26.
10
that his family members and Ford's other targets will not voluntarily provide information to Ford
thereby requiring Ford to issue subpoenas to those targets, many of whom have
Ill)
presence
Kentucky and are not subject to a subpoena issued by thc Boone Circuit Court.
information and belief, Chesley asserts that
(i)
CflSC
ill
Upon
efforts
are
attempt to seize are used by, held by or owned by entities who are nOI parties to, or currently
10
El.ECmONICALLY
('-IL[O 01/061201514;55
IFI
1\ 1500067 1 CONFIRMIHION
NUMBER 3()3J62
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 17 of 114 PAGEID #: 303
aware of, the Abbott Case. Many of these third parties are Ohio residents, citizens or domiciles
who deserve the procedural protections offered by Ohio law.
27.
Chesley does not have the ability to secure a supersedeas bond in the amount of
$42,000,000, plus millions in accrued interest, the stated amount of the Chesley Judgment.
28.
If any money is owed by Chesley to the Abbott Case plaintiffs, Chesley believes
that an accurate calculation of the remaining amount owed on tile Chesley Judgment may
substantially reduce the Chesley Judgment for the reasons descri bed above. Chesley does not
know and cannot estimate the amount that remains owed
Knowing the current amount owed
Oil
011 account
amount is relevant (a) to any consideration by a Kentucky court of requirements that might be
imposed if Chesley seeks a stay of enforcement of the Chesley Judgment while his Kentucky
appcnl is pending and (b) to limitations this Court might impose on Ford to insure that her
collection efforts do not attach assets in excess of the amount truly owed on the Chesley
Judgment,
Ford's refusal to disclose the current total amount of rhe Chesley Judgment may
successful. Thereafter, any collection activity by Ford against Chesley will have to bc reversed
jl\Gluding the return of (Isseis to innocent third parties
[1'0111
temporary loss of seized assets may cause significant harm to the innocent third-parties who are
the subject of Ford's collection activity.
Declare that before Respondents take any action ill the State of Ohio to enforce
JlIdBJ11Cll(,
II
El.ECTR()NICAl.l.Y
FIl.ED 01/06/2015
Case: 1:15-cv-00083-PCE
Respondent Ford must Immediately disclose to this Court and Chesley (i) the name, address and
amount owed to each of Chesley's current judgment creditors and (ii) the exact
current
amount
owed on the Chesley Judgment in the unexpected event the Chesley Judgment is affimtcd;
B.
Respondent Ford must immediately disclose to Chesley (i) how much money and the value of
assets seized under the authority of the Criminal Defendants Judgment, any nssets forfeited in the
Criminal Case and any restitution paid in the Criminal Case, (ii) when any assets were seized or
forfeited and any restitutlon payments were made so th.at Chesley can check the accuracy of
Ford's pre-judgment and post-judgment interest calculations, (iii) the amount collected by Ford
and not distributed to her clients, an~ (iv) the total amount distributed to each of the Unknown
Respondents in both the Settled Case and the Abbott Case, after reduction for Ford's 40% fees
and Ford's expenses;
C,
Enjoin Respondent Angela M. Ford, the Unknown Respondents and any other
person acting
Oil
lilly
Chesley Judgment ill the State of Ohio until 90 days after Chesley has received all of the
infonnntion that this Court declares Chesley is entitled to receive;
D,
Enjoin Respondent Angela M, Ford, the Unknown Respondents and any other
person acting
OIl
Chesley Judgment
lilly
Ohic, except for Chesley, until 90 days after Chesley has recei ved all of the information IImt this
Court declares Chesley is entitled to receive; and
F
Enjoin Respondent Angela M, Ford, the Unknown Respondents and any other
person acting
On
lH1Y
documents relevunt
12
ELEClRONICALl.Y
11'1 f
A 1500067 f
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 19 of 114 PAGEID #: 305
to any of the issues described in tl)is Petition. 01' Ch~,slcy's other filings made simultaueuusly:
Chesley submits thru this relic!' is required due to Ford's demonstrated efforts to
herewith.
hide
UWl'
eighteen
ytl,UI'(i
Relief (the "Petftion"); (3) I (lin the judgmen] debtor who is the target of the Chesley Judgment
described in the Petition, (4) io the best of my knowledge and belief, the facts set out in
the
is known to
SIGNATURE
Sheryl G,
Snyder,
Esq.
Sqite 3200
Louisville, KY 40202
SSII
vIlHlUe,r@lbllQw,cQ.l.\1
ydej'@J\l.Um:\:~f.ii?m
13
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 20 of 114 PAGEID #: 306
CLASSIFICATION
WINJ<J.F,R
TMCY
FOR""
CASE NlIMIlER:
PURSOANTTO
PLATNTIFF;
SUPF:RINTENDENCE
Stanley M. Chesley
Dy JUOCr. --''--
IZJ
L TORT - A300
Ct[OIl-
Mlllpl'flctlce~ A340
WORKER'S
o A[lp~nl-
CJ
Employer - D410
D420
ADMINISTIlATIVlI,
o MAncJAIIllls
D On Account
API'EALS-17600
- (T610
Appenl MO'OI' Vehicle - r620
Allenl UJlclllpIoYllltnt - FG30
o Apr.!
o AppeAl Zoning
L1rjllOl' - F640
F6S0
- 1<'660
OF QUALIFICATION
-11600
01/06/2015
ATI'ORNIY
-11860
-11850
o Pnt',ltlolI- H870
CI Qlllet Title - HSSO
o RClllovill - IiS90
o Snle of Rcnl Estate - moo
o Speclllc Performnnce -910
o Res'rllining Order -llno
o 'Festirn nny -- H930-21
o Envlrnnmental H940
r=-r Coguovlt - 11950
o M~llnclllg by Siallclng -11960
o Repo Title - Transfer nfTitle Olily - 970
o Rcp o Title - With Money Clnhll -J1980
o Injunetlou Sexual Predator -. 990
Jmlgment - H790
COMPI.NSATrON
o Non-Compllaut
Declaratory
OTHEnCIVIL~1I700-34
(PHINn:
OlllOSUPREME
Termination - H690
Reclnssltlcatlon ~ 11697
Vincent E. Ma~_e_r
------------------
Rt\'I,,~ 0,<./10110 13
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 21 of 114 PAGEID #: 307
Stanley M. Chesley
Petitioner
Judge Ruehlman
v,
VERIFIED MEMORANDUM IN
SUPPORT OF MOTlON FOR
INJUNCTlVJ~ RELIEF
Respondents
Petitioner Stanley M. Chesley ("Chcslcy") seeks immediate preliminary relief and a
subsequent permanent Injunction pursuant to Ohio Rule of Civil Procedure 65(B) et seq, As set
forth in detail below, relief is appropriate
demonstrate that current form of the Chesley Judgment and Ford's actions combine to:
(i) violate the requirement that a non-class action money judgment be in favor of
currently known person(s) in II determined amount per.judgment creditor. The
Abbott Case is a "nHISStort action" not a class action. So, the judgment cannot bc
in the nature of a total owed to a group of persons;
(ii) impede
the operation of public policy ill the State of Ohio and the
Commonwealth of Kentucky in favor of settlement;
(iii) impalr tile proper functioning of this Court and Kentucky courts because
kuowing the true amount of the Chesley Judgment is relevant (a) to any
consideratlcn by a Kentucky court of requirements that might be imposed if
Chesley seeks a stay of enforcement of the Chesley Judgment while hi:; Kentucky
appeal is pcndingnnd (b) to limitations this Court might impose on Ford to insure
that her collection efforts do not attach nssers in excess of the amount truly owed
on the Chesley Judgment;
(iv) prevent Chesley from considering ill the future possibly presenting reasoned
settlement offers that Chesley might make to some or all of the stated
beneficiaries of tile Chesley Judgment, the over possibly 400 plus separate Abbott
Case plaiutiffs, see Exhibit A;
(v) deprive each of the Unknown Respondents of the potential opportunity to
individually recei ve lind consider settlement offers from Chesley;
EI_ECTnONICALLY f'ILW
that
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 22 of 114 PAGEID #: 308
(vi) shroud in secrecy the value and disposi(ioll of tile money and assets the value
of which must be credited against the Chesley Judgment;
(vii) inhibit Chesley's abllity to properly consider all remedies that are available
to Chesley; and
(viii) endanger thc financial privacy rights of third-parties, including certain Ohio
citizens, residents and domiciles whose documents and information Ford seeks to
obtain without. using propel' procedures in Ohio,
All of these rights and principles will be irreparably lost if Ford, on behalf of the Unknown
Respondents,
is permitted to domesticate the Chesley Judgment in the State of Ohio and then
issue subpoenas and take collection action in the Slate of Ohio without providing
10
Chesley the
since the Respondents will have the exact rights they <Ire
entitled to under applicable law after they comply with this Court's requirements imposed after
the COUl1's granting of Chesley's Motion For Order Restraining Registration and Enforcement of
Kentucky Judgment and Document Destruction (the "Motion").
Grnnting tile requested relief herein benefits the public by (i) promoting the public policy
in favor of'sculcmcnts,
inquiries which should all be postponed until Ford complies with applicable law .\IId then Ford's
inquiries will be conducted using proper Ohio procedures,
FAJ~.L~Hl~U:YANT TO FORD'S PLANNED JUDGMENT COLLECTION ACTIVITY
This case arose front the criminal activity of two former lawyers, William 1. Gullion and
Shirley A.
Cunningham
(jointly
(he
"Criminals").
ELEcmONICALL
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Case: 1:15-cv-00083-PCE
(IIMills")1 colluded to misappropriate some settlement proceeds owed their clients ill n Kentucky
pharmaceutical
Company, et al. Boone County, Kentucky Circuit Case No. 98-CI-00795 (the "Settled Case").
Respondent Angela M, Ford, Esq. ("Ford") is a licensed Kentucky lawyer who represents
.!
I1n
capacity as agent for her clients. III 2005, Ford filed an action accusing Chesley, the Criminal
Defendants'
Settled Case. That case is styled Mildred Abbott. et l. v, Stanley M. Chesley, et al. Boone
Circuit Court Case No.05-CJ-436
At about that same time, Judge Weill' declined to enter a similar judgment against Chesley.
I
Collectively, the Crlminals and Mills will be referred to as the "Criminal Defendants" because all three were
accused of federal crimes bill only tbe Criminals wore convicted. Chesley was never criminally charged,
2
As this matter has unfolded, Chesley is ill tact a victlm of the Criminal Defendants since he has suffered
~tie\'O\lsly as 1\ result of the Criminal Defendants' actions,
Tho di(Terence between the supposedly mislllludlcd scrtlemem funds sought by Ford MId the $42,000,000
judgment agahist the Crlminal Defendants nriscs prhnerlly from the recovery of approximately $20.500,000 from
Ihe Kentucky Fund For Healthy Living. a charity controlled by the Criminal Defendnuts funded with money from
the Settled Case. III March 2006, the assets of {his charily were I)laced into a "constructlvc Irust" III favor of Ihe
Abbott Case plninliffs when thru money was transferred 10 0 Qunllfled Seulemeni Fund. Ford controlled III is money
Ilnel this money was used 10 pay certain expenses.
Chesley believes thn: ford retained a 40% legnl fee from the
recovered charily funds and [111111011 ies and ~sSCIS she collected ngniJlSI the $42,000,000 judgment.
Case: 1:15-cv-00083~PCE Doc #: 13-1 Filed: 02/26/15 Page: 24 of 114 PAGEID #: 310
FORD'S COLLECTION
Pard immediately
DEFENDANTS
(0
this Court,
II July
2, 2008
Order, the Boone Circuit Court directed an existing "interim receiver" to take control over the
assets of Tandy LLC,
This was done before any judgment was entered against Chesley so
Chesley does not know why Ford chose not to immediately sell the seized assets and Chesley
had no standing to oppose Ford's decision
(0
Boone Circuit Court, Ford said that the Abbot Case plaintiffs oppose the "usc of funds entrusted
to the Interim Receiver fat any other purpose other than distribution to the Plaintiffs. , .. " Ford
also stilted to that "there are a myriad of questions related to management of assets, , .
,II
See
Exhibit B. The Boone Circuit Court repeatedly approved payment of the Interim Receiver's
expenses from the above-discussed
Exhibit D is the "Tenth lnterim Receiver's Report" filed in the Abbott Case
"deposits" of $43,624 ,81 agnlns: "Approved Expenses Paid" of S27 J ,340,25,
011
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1 MOTI
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plaintiffs. Instead, a receivership was used and th"t receivership managed the assets in n fashion
questioned
by
The assets of Tandy LLC seized by Ford were finally sold for an amount (hat has not
been specifically disclosed to Chesley.
could have been sold sooner fOI'a greater amount than realized by the subsequent sale.
Chesley does 110t know the net effect of the receivership's
Chesley does know, however, that the total value of the assets seized by ford should be
immediately
Judgment
and
thus
HOW
against the
Chesley Judgment. The risk of loss for those funds should fall on Ford, not Chesley.
Ford Chooses Collection Co-Coullsel
Ford needed help collecting the Criminal Defendants Judgment.
Johnston, Esq. of the law finn of Miller & Wells C'Johnston'').
drafted garnishments for the Abbott Case plaintiffs.
Ford describes nil"significant sums" to be credited against the Criminal Defendants Judgment.
The relatlonshlp
Johnston and others alleging the conversion of Over $2,000,000 in a case styled AT! Ventures,
LLC, Villa Parldtsio and Angela Ford v. Johnston Legal,
County, Kentucky Circuit Court Case No. 12-CJ-3758 (the "Johnston Case").
In her second
amended complaint ill the Johnston Case, Ford recites how Johnston helped collect the judgment
against the Criminal Defendants.
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 26 of 114 PAGEID #: 312
funds seized by Ford and Johnston regardless of the ultimate disposition of those funds. The risk
of loss for those funds should fall
011
1'.
Gallion and Cunningham, U.S.D.C. E.D. Ky. Criminal No. 07-39-DCR (the
"Criminal Case").
The charges against the Criminals carried penalties that included asset
funds collected in the Criminal Case.6 Ford sought to change that situation by filing the Victim's
Motion For Order Appointing Victim's Representative
Disbursal of Forfeiture And Restitution Funds, Ford wanted control over all the funds nnd she
wanted to collect her 40% fee
1'1'0111
Under pressure from the federal court, Ford transferred to the United Slates Marshalls
Service C'USMS")
fimds from four bank accountants established in the Abbott Case; those
accounts included, inter alia, funds from the Kentucky Fund For Healthy Living and funds from
l
tlPOIi iliforlllflliorl and belief, Chesley i\SS~JlS Ilia! Ford rcwined n((orney fees trom (he forfeircd Hlld rcsli((ltioll
funds and look advantugc ofthe 1I'0rk performed by employees oflhc United Siales of III11Cflca,
6 See page 4 of the Briefof
IIppcllantllllg~ln
M Ford Illed in the Sixth Clrcuit 011December 1,201 l.
1 A (500067
Case: 1:15-cv-00083-PCE
the sale of assets of Tandy LLC." The USMS got control over funds that
RroSC ill
Case all or which should be credited against (he Criminal Defendants Judgment
Chesley Judgment,
the Abbott
UIlO
thus the
The ultimate disposition and application of those funds lias not been
"Oil
afflrmative duty to
represent the statutory rights of all 421 victims" - not just the Abbott Case plaintiffs.
To meet
her duty to the crime victims'' who arc nor Abbott Case plaintiffs, Ford established a separate
escrow account over which Ford hod control."
money from the Abbott Case plaintiffs. On November 18,2012 Ford wrote:
The United States is correct in stating that the 2 prior distributions made in
the state court civil action [the Abbott Case] did not include the 14 Victims who
are not parties to that actlon. . .. , the undersigned {Ford] agreed to escrow a pro
rata portion of the funds then available for distribution, as though the 14 Victims
were parties to the civil action, as a compromise.
See Exliibit
F, Defendants'
Memorandum
filed by Ford in the Criminal Casco Chesley does not know where the funds in the
escrow account
originated,
Victims'
Response
To United
came
from
one
should be credited against the Criminal Defendants Judgment and the Chesley Judgment.
This discussion of funds distributed through the federal court is relevant to this Court
because ally restitution paid to tile Abbott Case plaintiffs reduces the amount of the civil verdict.
KRS 533.0J0(3)(d).
This reflects the general rule that "a party can have but one satisfaction
for an injury resulting from a tort .... " Burke Enterprises, Inc.
1'.
See Defendants' Victims Motion To Distribute Funds ill U.S. Marshnll's Posscsslon tiled by Ford in the Criminal
Case 01) Sept. 10.20 I 0,
8 The federal COlin siated thlll Ford rcprcscms 407 clients in the Abbott Casu.
? See the Motion For Partinl Lift of Seal of Accounting as to UnitedStates tiled on Aug. 2. 2011 iu Ihe Criminal
Case and see Exhibit E, Defendants' Victims' Response To Proposed Order regarding Restitution filed by Ford ill
,fie Crim iunl Case on Jan. 2. 20 I J,
1
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(Ky.l985).
I
.t
exceed the victim's actual economic loss, recovery of both civil and criminal sums for the Same
harm constitute an "impermissible
The crime victim's restitution and asset forfeiture in the Criminal Case is compensation
for the same harm as
Wl1S
the basis of the Abbott Case. All amounts paid in (he Criminal Case
should be credited against the Criminal Defendants Judgment and the Chesley Judgment and the
01'
restitution pald.'"
(0
collected by Ford including both amounts Ford distributed to her clients aud amounts Ford
retained. The USA also specifically wanted to know the location of all funds collected by Ford
but not distributed to her clients. After several rutile efforts to keep her secrets, Ford produced to
the federal court all thnt information except for "the locution of attorney's fees paid to Ford by
10
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 29 of 114 PAGEID #: 315
her clients,"!'
This did not satisfy the USA lind so Ford continued her efforts to keep secrets by
appealing to the United Stutes Court of Appeals for the Sixth Circuit, Appeal Number 11'0181.
Ford eventually filed under seal a complete disclosure with the federal court, including an
analysis of Ford's attorney fees. The filing by FOI'u was initially for In camera review by the
federal district court,
Subsequently, the USA was granted access to Ford's filing. Despite this
development, Ford asserted to the Sixth Circuit that her appeal was not moot because Ford
On May 17, 2007 the USA filed u statement of interest ill the Abbott Case asserting the
USA's right to subrogation for certain amounts paid to third parties
0))
10
(0
Judgment must be given for any amounts paid to the USA because the amounts paid to the IJSA
were owed to the Abbott Case plaiutiffs and would have been pald to those plaintiffs hut for the
subrogation rlghts asserted by thc USA.
The amount distributed to the USA pursuant is not less than $318,824.95.
Angela M.
Ford filed 01\ Dec. 1,2011 with the Sixth Circuit COlin of Appeals,
Angela M. Ford Concerning the COllr1'S Contilllling Jurisdiction filed with the
Case: 1:15-cv-00083-PCE
CHESLEY
After sepurate trips to the Kentucky Court of Appealsl3 and the Kentucky Supreme Court,
in an Order signed on July 29, 2014 Judge Schrand who replaced Judge Wehr on the Abbott
Case ruled Chesley "jointly and severally liable with" the Criminal Defendants "for the existing
judgment amount of $42 million owed to Plaintiffs" - (he Criminal Defendants Judgment. See
Exhibit A. The Order of the Boone Circuit Court was clarified in a Second Amended Judgment
entered in the Abbott Case on October 22, 2014.
Chesley llahle for "pre-judgment
post-judgment interest compounded annually at the rate of 12% pel' annum thereon from the date
of this Judgment." This is the Chesley Judgment.
Despite (he above-discussed
Boone Circuit C01ll1 an accounting
Defendants Judgment.
ford's failure is obvious from the fact thai the Chesley Judgment refers
to original $42,000,000 amount despite millions collected on account of the Criminal Defendants
Judgment; if' Ford hod provided updated information the Chesley Judgment would have started
with the true amount owed then ruther than repeating the seven year old $42,000,000 amount.
A suuunnry of Ford's actions in the Abbott Case shows this timehne:
(1)
(2)
I)
The Boone Circuit Court initially granted summary judgment against Chesley. That judgment was reversed by
the Kentucky Court of Appeals ill 201 I and (hell reinstated in 2013 by Ihe Supreme CO\ll1 of Kentucky.
10
NUMOER 383362
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 31 of 114 PAGEID #: 317
(4)
entry of tile Chesley Judgment in 2014, Followed promptly by discovery
addressed 10 Chesley that is more rhan 50% focused On financial documents and
infornnuion of third-parties including many citizens and residents of Ohio,
opportunity
$42,000,000 amount of the Criminal Defendants Judgment was determined or how Ford chose to
collect that judgment and disburse the proceeds thereof because Chesley was not a judgment
debtor when all the above-described activity occurred.
CHESLEY'S
APPEAL IN KENTUCKY
WILL DE SUCCESSFUL
Court
On
Respondents imposed by a slight delay ill their collection efforts against Chesley.
harm the Respondents
It does not
forcing Ford to obey the law and only collect the propel' amount now owed since any funds
collected on tile Chesley Judgment will probably be returned to Chesl ey or those innocent third
parties from whom Ford may seize assets.
Imposition
Summary judgment against the Criminal Defendants was granted ill 2006.'4 Contrarily,
Ford's initial motion for SUtl1nlUI'Y
judgment against Chesley was denied."
Criminal Defendants Judgment and acting without any discovery after the 2013 Kentucky
Supreme Court's Abbott
1'.
H
The Kentucky Supreme Court afflrmcd summary judgment against the Criminal Defendants staring thaI the
Abbott Case claims' were "csscntlally contmctunl, based upon COM's !lhl) Criminal Defendants] breach of lhe
attorney-client contracts." Abbott 1', Che".Je)', 41~ S.W.3d 5119, G03 (Ky. 2013). lis all alreruntlve, (he Kentucky
Supreme Court held (ha! the Criminal Dcfcndnnts conductamounted (0 a join: enterprise or joint venture, such thUI
joil1llinbilit), could be imposed under Kentucky pnrmership lnw, ld. at 604.
I) Judge Wehr of the Boone Circuit COUrl denied ford's first motion for judgment against Chesley, stating, "The
rationale or me previously entered partlnl sununnry judgment [against the Cruninal Defendants] does II0( apply to"
Chesley,
II
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Judgment.
The Chesley Judgment is premised solely on collateral estoppel; the Doone Circuit
Court (Judge Schrand) held that Chesley was part of a "joint enterprise" with the Crimlnal
Defendants and thus ruled Chesley jointly and severally liable for the Crimlna! Defendants
Judgment. In so doing. Judge Schrand ignored the distinction between Chesley's ethical conduct
issues in Kentucky (Chesley was not dlsbarred in Ohio) and the criminal acts of the Criminal
Defendants.
The Boone Circuit Court made that 2014 ruling despite the Kentucky Supreme Court
specificnlly staling IhM Chesley's situation
WIlS
011 the
In contrast, the
to the Abbott Case plaintiffs when the Criminal Defendants "paid themselves fees over and
above the fII110Ulltto which they were entitled to (sic) under their fcc contracts with their
cliellts.,,16 Holding Chesley jointly liable with the Criminal Defendants is legally impermissible
because Chesley's
liability is premised
011
ill
12
II.
Case: 1:15-cv-00083-PCE
Defendants ill a I1WIIller that would permit the imposition of joint and several liability upon
Chesley. The Chesley Judgment rests
011
Defendants
Judgment
amount
of .$42,000,000
W(lS
determined
by
calculating the excess legal fees that were diverted to the Criminal Defendants by their fi,\ud. It
had no connection to Chesley.
If a judgment
against Chesley is proper in the Abbott Case, the most that should be
awarded against Chesley would be a judgment Ior fees he received ill excess of the amount he
should have recei ved in the Settled Case. In analyzing that question, the Kentucky Supreme
Court assumed that Chesley was entitled to 21 % of the total attorney's fees that were properly
paid in the Settled Casco The Kentucky Supreme COUl1then discussed what Chesley received
compared to what he was entitled to receive ill the Settled Case. The Kentucky Supreme Court's
discussion lends to n mnxlmnm overpayment to Chesley of$6,465,621.87.
Separntely, tile Kentucky Bar's Trial Commissioner and Board of Govemors asked the
Supreme Court to award nil approximately
1 MOTI
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 34 of 114 PAGEID #: 320
(0
011
Information from Chesley about non-parties who fire Ohio citizens, residents and domiciles.
ford threatens worse than burdensome discovery addressed
10
Chesley. In a December
12, 2014 e-mail to Chesley's counsel Ford stated her plan to inflict pain on, and invade the
privacy of, several innocent third parties. ford wrote:
I'll obviously want the written discovery back from Chesley as well as documents
from subpoenas I'I! issue . . .. III addition, I'll want (I) depose his [Chesley's]
wife and children and several institutions. There are other individuals that I'll
want to depose but I'm not prepared to identify th ose just yet.
Ford's reference to issuing subpoenas is an obvious plan to seek documents from non-parties.
Ford plans to create problems for (i) Chesley's wife, Oi) Chesley's two children, (iii) "several
institutions", and (iv) an unknown number of other individuals. Many of Ford's targets are in
Ohio. Ford must be made to strictly comply with all legal requirements for the registration
01'
domestication of the Chesley Judgment and enforcement use of a valid Ohio judgment before she
begins to invade the financial privacy of so many innocent non-parties.
THE WHO? & HOW MUCH? OF THE CHESLEY JUDGMENT
It is axiomatic as
II judgment
judgment creditor. The Court (Hight wonder how Chesley got into (his situatton. The answer is
that the above-described
Abbott Case: (i) the existence of the Criminal Case and Chesley's co-defendants asserting their
Fifth Amendment Rights (ii) rho appeal to the Kentucky Court of Appeals; (iii) Ford's
subsequent appeal 10 the Kentucky Supreme Court; and (iv) Chesley's disciplinary proceeding
followed by the Kentucky Supreme
COUI't'S
ruling
Oil
14
NUMBER 3133362
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 35 of 114 PAGEID #: 321
proceeding all combined to inhibit the normal discovery process in the Abbott Case. Chesley
never deposed (\ single Abbott Cuse pluintjf[47 so that he might
kJIOW
Chesley owes in total and precisely to whom that amount j s now owed
each particular
judgment
creditor.
011
Defendants and so never had all opportunity to demonstrate that he did not conspire with them.
Without critical Information
policies will be frustrated and Chesley will forever lose important rights:
(1)
the fair und efficient operntlon of courts ill the State of Ohio and the
Commonwealth of Kentucky may be impeded because, infer alia, the true amount
of (he Chesley Judgment is relevant (0 (a) any consideration by a Kentucky court
of requirements that might be imposed if Chesley seeks a stay of enforcement
while his Kentucky appeal is pending and (b) limitations this Court might impose
on Ford to insure that her collection efforts do not attach assets in excess of the
amount truly owed on (he Chesley Judgment;
(2)
Chesley has a right to consider all available remedies under applicable law
if the Chesley Judgment renders Chesley insolvent - but, that right is not available
if Chesley cannot identify his creditors as required by applicable 11Iw; and
(3)
Ohio public policy favors seulements" but Chesley cannot consider
making any rational settlement offer(s) to particular plaintiffs unless and until he
knows how much is owed to each Abbott Case plaintiff. J?
I' Among the unexplored questions rclatccl 10Chesley's alleged liability to the Abbott Case plaintlffs is the benefits
received by rhe Abbott Case r1ni",if(s ill llie Settled Case as a direct rC~lI'tof Chesley's involvement ill the Settled
Case. Chesley believes Ihm his efforts in Ihe Settled Cnsc provided subslantially more benefit 10 Ihe Abbott Case
~lain(jlTs IIJan Ford's efforts in this litigation.
s Ohio Rule of Proressioual Conduct 1.2 and (he Kentucky Rule of'Professional Conduct 3.130(1.2) both mandate
Ihal "(a) lawyer sh.111 nbide by a cllcnts decision whether 10 settle n matter."
Each stare's rule govcrning
communlcatlon between lawyers and clients, fortifies this contention. OH ST RPC Rulc 1.4 and KY ST S CT
RULE 3.130, RPC Rule 3.130(1 A) require that lawyers promptly inform thctr clients of tnosc matters requiring the
client's consent; Ihis rule mid ill conjunction with Rille 1.2 mandates thnt all settlement negouauons be filtered
through the client, Ford avoids this obligation by hiding her cllcnts and how much is owed 10 each thereby
preventing Chesley from considering the option of n!~king 011 Iliformed settlement offer to ro1l1ku/ar Abboll Case
pia inti ITs.
19 Hnviug chosen n "moss action" instead of;, class action, Ford is ctliicnlly bound to transmit Rny seulcment offers
Hinde by Chesley to each offeree and the clients are individually enritlod 10 decide whettrer 10 accept Ihol client's
particular offer. Ford, of course has effectively deprived her clients of their right 10 consider sculernem offers by
preventing Chesley from mnklug nny rntionu: settlement oilers.
15
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 36 of 114 PAGEID #: 322
Chesley has requested but not received from Ford (i) a calculation of tile total amount
now owed
011
thc Chesley Judgment including, but not limited to, a calculation of the pre-
judgment interest and (il) a calculation of the pel' diem post-judgment interest thut Fore! asserts is
accruing. Without those, Chesley cannot know what he owes to any particular judgment creditor
(a/k/a any particular Unknown Respondent)
Who Are The 400 pillS Abbott ellSe Plaintirfs and the Ulllmown Rc.~pondel}ts
The "Plaintiffs" in the Abbott Case are the stated beneficiaries of the Chesley Judgment
lind rea] parties in interest in this matter. In a twist from the Chesley Judgment, Ford asserts that
not all of the "Plaintiffs"
ill the Abbott Case arc Chesley's judgment creditors, the Unknown
Respondents.
All of Chesley's judgment creditors should each be a named respondent and served with
the Petition and related filings flied in this matte]'. Chesley has asked for the current names,
addresses and amounts owed to each of his judgment creditors/".
011
In response to Chesley's requests, Ford routinely points 10 the "grid" aunched to the Settlement \
Agreement
That grid is over 10 years old and contains names that Ford
[1
----------
The 0111011111 owed each judgment creditor by Chesley starts with the amount set in the sculcmcm grid of the
Sell led Case prepared over to years ngo nnd makes adjustments required in th~tcase the source of the $<12,000,000
"baseline judgment" against the Criminal Defendants; thereafter, there must be credits for amounts (i) distributed by
Ford 10 the Abbott Case plaintitfs, (ii) distributed to the Abbon Cnse plaintiffs through the Crtuiinnl CHSC, (iii)
retaiued by Ford as fees ~ml expenses, (iv) transferred 10 the USMS, (v) paid 10 the USA ns subrogation, and (vi)
collected by Ford but dissipated through a bad receiver and supposedly corrupt co-counsel, etc.
20
16
J63362
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 37 of 114 PAGEID #: 323
the persons listed on the 10 year old grid has died or filed bankruptcy -. it is true that Chesley
docs not know the
names of
his
current
judgment creditors.
COlll1S
statements by two courts before which Ford represented the Abbott Case plaintitTs. A summary
of only statements ill the Abbott Case (and its appeals) concerning Ford's clients is attached as'
Attachment I. Tn total, those filings list 463 separate individuals as plaintiffs in the Abbott Case.
I30th the following table and Attachment 1 show a wide variety of beliefs concerning the
number of Abbott Case plaintiffs,
Ford and others have stated that the following numbers of persons
01'
In Howard et O/. ~. Angela M. Ford, et (II., Fayene Circuit Court Cnsc No. 14-CI-3988 plnintiffs allege
malpractlce by Ford nnd others. This complaint asserts Ih~1 there should be over 500 plaintiffs in the Abbott Case.
11
17
1 MOTI
Case: 1:15-cv-00083-PCE
-_______
l)ATE._~I-
-_ ......
NUMBER OF PLAINTIFFS
DOCUMENT
--
'-----'-
"A judgment record or docket should afford definite and reliable information as to the
parties for and against whom the judgments contained in it arc rendered."
415 AM,
IUR. 2D
18
MOTI I A 1500067 I
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26115 Page: 39 of 114 PAGEID #: 325
01'
49 C.J.S. Judgments 117 (2014), And see Montgomery v. Viers, 130 Ky. 694,114 S,W. 251
(1908) ("In specifying the relief granted, tile parties of and for whom it is given must, of course,
be sufficiently identified.") (citation omitted).
An Accounting
Upon Informaticn and belief, Chesley asserts that by February J 4, 2012, Ford had made
at least three distributions to the Abbott Case plaintiffs and retained attorney fees as supposedly
permitted by Iter agreement with those clients. All of these distributions were made before the
Chesley Judgment was entered. Chesley is entitled to credit against the Chesley Judgment for all
those amounts.
Public policy in the Commonwealth
and time associated with prolonged litigation. Kentucky law specifically recognizes discovery as
a means necessary to promote settlement, LaF/eli/' v. Shoney's, Inc., 83 S,W.3d 474 (Ky. 2002).
Ohio law similarly favors settlement.
(199 I).
This Court
IHIS
10
suggest a procedure
I'.
01'
Case: 1:15-cv-000?3-PCE Doc #: 13-1 Filed: 02/26/15 Page: 40 of 114 PAGEID #: 326
[4-5.000] Manual for Complex Litigation, DOJML Comment 45.000, Section 22.R. Since this
COUl1 could order discovery of each victim's dum ages in
CUll
[I
order Ford to now disclose how much is owed to each of the current Unknown Respondents.
Chesley seeks only information to which he is entitled lind that information is similar to that
which courts regularly order plaintiffs to provide to defendants in normal discovery processes,
Because Ford decided to make the Abbott Case a "mass" action instead of a "class"
action, Chesley may have 400-plus individual judgment creditors and public policy promotes
~eltlements with as many of those creditors as possible.
start with an understanding of how much is owed to each particular judgment creditor. The form
of the Chesley Judgment combined with Ford's actions prevent Chesley from possibly making a
rational settlement offer to any of the individual Unknown Respondents who each have the right
to individually determine If they want to settle with Chesley.
173, 182 (1956) (in action by 30 plaintiffs for loss of horses, trial court's "lump sum" award of
damages
was inadequate for appellate review and case remanded for apportionment of award
There is
110
Based upon the foregoing find npplicable law, Chesley respectfully requests that this
Court:
I.
Enjoin POId(and any other counsel working ill concert with her) 110m seeking 10
enforce the Chesley Judgment in (he State of Ohio until 90 days after sire provides to Chesley a
20
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 41 of 114 PAGEID #: 327
complete list of the current names, addresses and amount owed to each specific Unknown
.,,
II fail'
(\11Y
asset seizure
on (he Chesley Judgment and to whom those amounts are owed so that (he above-described
rights ore not irreparably lost. Further, this relief Is necessary to smooth the operations of' courts
in the Commonwealth
of Kentucky and the State of Ohio as they might face issues concerning
the Slaying or limiting of Ford's collection efforts against Chesley. Finally, Chesley respectfully
submits that this relief is necessary to enhance the opportunity for some settlements and will
preserve the rights of the Unknown Respondents
settlement offers. This relief is appropriate under the facts and circumstances before this Court
and applicable low;
2.
Given Ford's efforts to keep information from Chesley, Chesley needs injunctive
relief preventing
or entity affiliated
or electronic iuformati
011
01'
collected and/or credited against the Criminal Defendants Judgment, (ii) restitution obligations of
the Criminals, (iii) forfeiture of uny assets
ill
Of
any affiliated
entity transferred to or from Johnston, (v) funds transferred to or for the benefit or any Criminal
Case victims who are not Abbott Case plaintiffs; (vi) amounts distributed to the Abbott Case
plaintlffs;
subsequently by the United States Marshall's Service related to the Criminal Case or the Abbott
Gse;
21
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 42 of 114 PAGEID #: 328
3.
needed
10
[n
10
provide information
permit Service of Process on each of the Unknown Respondents or to cause the Iil ing
(L
Ohioresidents orcirlzens (exceptChesley), or to seize Ohio assets, until 180 days after the last
to occur of the steps listed ill itemsI thl'ollgh:3, above ..
vmUmCAT!~
Stanley M. Chesley' swears or ilffll;lllS <is fallows: (I)
have. never been declared mentally incompetent; (2)
folth in the' above-written
r have
ot
Relief
(tl.lC Sup)l()lting Memo"); (3) 'I all) the j't!~g.tllCiJtd~b.to);who is fhe subjecr (Jf. the Chesley
Judgment described .in the Supporting. Memo; (4) to the best oflhy knowledge and.
belfer; the
Memo me true, correct and, except .as .stated, complete copies ()C CCI'!nill .documeuts .flled lu the
Abbott elise or tho Criminal Case,
10
me.
22
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 43 of 114 PAGEID #: 329
Respectfully submitted,
lsi Vincent E, Mauer
Sheryl G. Snyder
FROST BROWN TODD LLC
400 West Markel Street
Suite 3200
Louisville, KY 40202
ymauer@fbtlnw_Ql11
snx9~r@!ht!aw..!.~oJl1
23
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 44 of 114 PAGEID #: 330
Attachmellt
r--------.---:O-A-cT--E---.---------December
__j
0118087.0619701 48SI953J.S!H9v5
24
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 45 of 114 PAGEID #: 331
_..__,._.:.",;_-
"
.
r-'.. '"- --EiiTfT\{u.--'--~~
...- .....
".
.,
"
"~""
/,
. (;UG 0 1 20111 .
.!:y~::Jt~J:~~~,::~q
CAfi1!: NO,.i,I.~,'C!,()Q(IJ()
T'LAlNTHt'FS
\I,
'
I1wttr,r
'.
~nd tfon.
r"rnllk'
f);I1!1
.'
h'i1Yi~.\g,1,(;;Yi~VI'C(\ Plait;tJfft.'
(1,
Snyder
Motion, Chesleyts
tolto\\r~11
"
This Court, by the 1\1~ltch'R, Z()()6()nlr~' ClfS~nio'r StCltilS Jv.dp,~Willi.HIll \V~br, pbwjoilsly
gt';IJ.1t,~d ~''.JIYIl~.'L'Yjtldem~nt,
:~J')il)i>\ n~i,:n~lft'r,(tiWilllam
inj[jrk~ Pll1.;nLiIf:; (11,lt't~iedQ?' a result' of il)rlr,~',iHfl tha "feu-phen" dl(',( drug, The Court awarded
damages
ill the
QrdeJ: of AU!JtllJt:I,
.
1'1;(; ;~\lpl";m~
Court I,lt' Kentucky aflinned the
......
.COMlY10N\.v.EJ~LTlf OF K{i:NT~lCKY
HOONl!~c:n(('un: COUIH
nA'V~SlONm
",
11()W
SUlrtl;l111'Y
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 46 of 114 PAGEID #: 332
,0'-
, ..
-~.-
__ ._
---.---
-,
.. -
',._
....
__
severally liable with Gallion. CUJ1nill?,')l3J,n and Mi!!s for tiKI amounts owed to PI8in~iir~,aud that
, !
,~ol;,:h!0led.a
ill,
Kentllc/:y
hl':('.rin~. and
,R':II'
pr(!d:i(/~ ."f'le,w in Kerituckv, find that h\~ pay $7,55 5,OOO,O~ in restitution
clients.
Chesley's
G<"Vt;"11'(O:'~'of
to th('}'Guard case
The
trJ
(:(I1r.rnis'~,il)ll',~r'1lh~
:111(t
.ttl~ ~;'l.\r)('Kn(~
Come
, The Trii:ll Commissioner (mild, ElnrJ t!.:,.: :;\;:';r':'l'ili: Coun rarified, that Chesley violated the
followint..:
('O\1[j'nCIS
and
~'t')r)t'(,)(;~:;
,!
NUMBER 383362
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 47 of 114 PAGEID #: 333
--........ ~---.,.~--~--.---.-...
.,
,-~-
-_ ....
,'_
.....
'the
...
-~".,.-
to the client nnd the method of its determ inat ion , The'
rr.nliltl?'n':e
II
1~0t1lr;\(:f~'
for
(he
c1k.nf~;W~T<:':
either
,
[(I;:'
should heve
b(':I~Ji
.'
:';:1~~,941,m~.46
expenses
..
~.Ild. ))0"
'..
'.
He was paid
8CR 3.1305,1 (<\)( I.) by knowingly mtj~yins .spociflc misconduct of other lawyers,
S'CR 3. P.(I..1)!.(g) by
claims,
Mills
.r7iJrr.:.<eriti.~lg
1:\',".:: r
Uil,J
,!)'.(',rt'}
'
to his
ft:l ~,!:h~iil.
with
Clit;I\!l in
(':)nld'1g en
I\grr.~Il'IClltwith
~ugregE\te settlement
Oallion, Cunningham
and
of ,s(:P.. 3.130-
1.8(g),
','1(".
.." ~ I,:\(l~;,J
q
L.
, .. n, _), ..
("'II'
d, It&,.,\,
'''1';''
rl'''''('''~';?'
cf
1I1i1(t'd~ll
f) the
till
earlier judgment
action," .~1illel' II. A.dli'C,~t~,Office vfCourts. :161 ~).'I,V;lJ867 (Ky. 20) l}. A non-party in tile former
action may assert
EU:C,RONICALL
.l'I;S
jurtir.ata, a
FIl.ED 01/0612015
14:55
(:/(1:;1'.
cousinio
td the
former
..
-_._
Case: 1:15-cv-00083-PCE
__
.....
_._
acriorr
,_
:1.<;I"lllg ,13
opportunity
(0
the
...._
~_..---.
,_~
__
.--_.
_._
........
",
M ....
_~_~
---~-. ..
. _- ---
I\.ddirir)rlhll;t, lIlr:
')tlpr,:m(:
judicial cepnclty
e entitled t.o rho $,1010 res ju<li~,Ja dfer.,t r,:!l,iudgmC'.Ilt,"! of a court... fi,l;iing that
Ill('.ydo.
(l t
Court
l'
fair
J)lIS flddl'~:j.')<;dwhr.the!'
Harris. 2{~9~l.W)r,I
i\ .1/1
WIU' held
agcncic acting in a
(Ky. 200\\),
administrative
!'.' !~~~)Iemqcr'lI,
'.
.,
William L. Gr(1hfJ.lti. Chr.:S!'''.i' VIl\~r!:.yrCscllt<'(\ at ,:'m:icnls times by Kent Westberry, Esq ..' James
O;~J'y 8:;<;., Prank H~'r;10n.IV: Esq., Sc('II' Cox. b~ .. MInk MiltP.f. Es(J., Sher:I'1 Snyder. Esq. and
H~n, Susan pIon .:' Prior to the he::Hing, tht~t~~'jhw;1\Y(Ii:' five out (If state witnesses 'was !provided
'.
It
tota]
submit briefs at thf. conclusion of the }:k~J'ip.g. TIlt: C01.1.'.1 finds Chesley had
and fair oppcrtunity
\1:1 PIC.'lfllt
n realistically
full .
"( I) at least one party to be bound in (he second case must have been a party in the first case: (2)
the issue
'aelual[y
ill
the second
<':IISC
must be: tile same issue as the first case; (3) the issue must have been
\\'[IS
issue ill (hI': prior action must have been necessary to the court's judgment and adverse 10tile pan)'
to be bound." fd. quoting Yeoman v. Commonwealth Healtt: Policy Bd. 983 S.W.2d 459 (Ky.
1998).
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 49 of 114 PAGEID #: 335
.~
_.
._w
'
~ __
u;nttel'lInd
_...J_~~"",,
~~-
__
'
-_
-~_,
f(]~,t:l 11'11.;1
Clt'()!.1!n:ltrtllt'eSwere. ,!itigalwJ .'in
I..
-,._,
II party
-.---
~-"
~--
.. --.-
..-..--
n\l!
GO"l?tI10ril
J'.(HA mnIt~r.
This Court finds C.:bf;1s!~yif, bound hy l'h,~'it,ctual finding;,', m1~1ler,ill conclusions hi the
KBA l'(,l'i1tter. The ~I,l[.l~('lmf)Court
any
f(l\)lIr.\
GILaI'd.
nwtt:;:I'., Fie,
HICl'~r.)T(,\,
rlS G:3.l1ioII, C!,mni:ogJmm anrl Mills, and rhe same responribiiitles he would have,
I' Chesley.
(,h~~,l()~1'hod
"
respnujiiliilities
.
t:'! (Ii~dk.nln,
~p~cifi(,<'1!lythnt.llt
\i!!l~
10
)'~~r.i\'~ixo more
,
'
than 21 % of one-third of
,
'
R Sc11CI11C 10
in excess attornev's fees from unknowing (:j)elitfl,"i~~ I.h~l b~ received and retained fees that he
,knew were improperly rakcn, Id.
attempted
to avoid conversation
and correspondence
-.-~~
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 50 of 114 PAGEID #: 336
, n(~H\Cj()lI_'::',Gh("lljt:!~~
<If hi. CQ"C01msel. Ii. Tbj';;: CCI);'! fillrl:; i,hat no.genuine
'~xht, md
:1\1\rllYlRiy ,indp,,"m,'o'tis
entered Into
r;pnI'Oflri~tt1
'Ol~,PJl\int,ift~~r..,\\~p.~hof
ltt'JJ'Ilf:y-etknt
n'\,If1t;,(.I~3hiJl 'with the P.lnilltiJfs iii Guard He 'brr,uche(J his duty. by.
,
.
fill
:1'-::Hkl1)('r1.t. monies
"
(i~~
J.?l. Ci)l~~!,r:Y'3conduct
caused Pl~,:h)liffs to .
C0(1lt
to ceder
rJl?~ (,Kef-.leyis
~Jf1l1;r.'n>
Cnnnigham ~t\d ~.tfill~'fq:', qn~ 1)1?7:ir.~,
1)\\'t,~J to PIr.irH!f!-'l.
.
Kentucky n[f?.rlD(yl J\1.I.ig0 Wl'}~r'f) (:,tl(llng in lh;~ m\ltf(!f tlil,'f. Gallion, Cunningham
,
'.
1:1
"
'
mf!~Jn~l' ill
and MiI!:l (:ornhinnrl th>~ir'dffl~tf.'in (:~eFr.I1..?h(~:;1!,i,tJg:-ll1011, they engnged ,in a joint, enterprise, or
,
jo'lnt mJ'i'!:I.;tQn\ fin )nf.,)\'mi.lJ pMln(!r~hip, e.:r,ini1:e, for ',~ limiier! purpose and dl:,;il1ton., for which
.
."
joint and several ~i:+i.lji;'yj,~.J'Il:-.))eiJ~1 :.',ss~!:sed l'I;<!f;l: KH8 1<52,220.'Abbott ,I'. Chesley,413 S,W.3d
,Sg9(Ky.
~()f3) .
.8g,I'(o(;I1'lt,
carried
.C;V,(
~l]'I~()tlg
be
by lh(~ gr',:'.tP; (A) u 1:0illJl1unity 01' p~o::uni,il')' interest .in that purpose, aniong the
members, ;llld (-1) 11,1' equal dgllt 11.' :~ voice h ,ill: .:iir.-:\;,iOrJ oHhc enterprise. Id. citing Huff v,
"
Rosenf)(H'p.,
"
Com!Tti:,~',iom;;' in
I([J,ry'
\I,
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 51 of 114 PAGEID #: 337
,.
.__, _~_
.._._~-
__._... :_._._~
"
,'.
__ .... _. __ ._~
......:.
..... _.".
~_.--
_"._'
._ ... _ ....
.:.--...;...._
__ ........
:_._.........,_l
Thill C()uri ~:II)W nJ)(I~(hi~t no ,gF:liuine l,ri.\;r.s of rr.r(t~)'i"Jfact (':xi~ts; and as II matter of law
Chesley i', jointly 1iild s{)vcr;;I\y linble with (l;~llklll.(\!Ildn~hllm
dao:mg:cl3 Q.w~j',k.d rl.'H:P1D.inl.i.,f('!; (jg'~i!litGaHh'D, Ctli1lijl1.~.b~1nMd Mills by this Conn's Order 'of
Augr,gt'l, 200'!. Ch:.d\~)' si[!~F:d I~;:J
,
'.
!I.'l 'eo-c(,iJl1(;(~l
.'
.'
shared
G11)C~rr.lli(ll~
I!.~f;Plaintiff:::
,',
and Mills.
M.ii'ls.
Chesley
(~Ir,~;('<l\Vlt\ ()!~~li'Jn',
ClltlIl1il?,h[J)ll and
::-"
.'
"
PU'1.os(:'10 be
wpf\':-sentillg
Th~'y l1~rer.d
on
I'
how
th(:y would th'J.\(') ~h-o.vtc..rk, lrd h,:,v)! t.\~)' I,Y"llIlri
.
',;,,\lfa'~ thl)
proflts.
Cht:.,:,I(~y Ill.runl'ained a
yoke in ~;le wflllflgcrhl control nfttie enterprise. TLe Court therefore finds that
,
pursuant to KRS
.
IT IS JJURnmR
.jointly
~4.Chesley
is
and severally liable with Defendants WIlHam J. Gallion, Shirley Allen Cunningham, Jr.
and Melbourne
rr
Mills, Jr.for the existiug judgrnent rimoun! 0[$42 million owed to Plaintiffs.
1.S Hf~RI2:RV ()I~.i.nCf<ED AND A.J:)JVDG~~D t!J'it Plaintlffs' Motion. for Partial
14:55 / MOTI
1 A 1:'00067
--.
__
.._~_.
__
_,..__~
~-.
_.. ~.
._--~- __
~~~
__
r-
__
(X)PlES TO:
.
.ALL ATIORNEYS
OF REtORD
.:
1 MOTI
1 A 150006/
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 53 of 114 PAGEID #: 339
BOOl',,\'ECmC()IT COURT
5rlTH JUDICJALDJSmICr
Case No. 05CI:q36
MICDlumAnnorf,
PLAINTiFFS
et al.,
v.
FOR J)ISTR.fBUTION
PFJLlll'IDKTO PLAINTIFFS
Plaintiffs
,U~
again opposed
DEFENDANTS
(0
for anyptlIJ?oseother than f9r a distribution to the ,f.lhiinlifW on the same grounds set forth
in the Plaintiffs Response
to Interim ReceiversReport
Plaintiffs
110le thai
(Q
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 54 of 114 PAGEID #: 340
J. Stephen Smith
Graydon Head & Ritchey, LLP
2400 Chamber Center Drive
Suite 300
Ft. Mitchell, KY 410 11
14:55 1 MOTI
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 55 of 114 PAGEID #: 341
COM.1\10NWeALTH OF KENTUCKY
EO ONE COUNTY C.[RClJIT COlJH'!'
CASE NO. 05crc00436
ANNMURR/l.Y. GLEP,K
0
Yd~~ .. __
._O_oOO
O.__
OJWER
through .Augusr, 20.08, for.services rendered ill this matter as more ll,atilcufnrly
described in.the attat;hcd invoice,
Signedth;~
QI;HIJElQAIlZ
~p.2!:1_
DII\Nf/E MU'IRAY
80RH~OISTRIOi/S~\CIJIT
COURl'
(o':JJ~1f'i?';;; /Jd<<i./o-
1 MOil
RECEIVEO
D,C.
OCT 14 Z008
Case: 1:15-cv-00083-PCE
(~"
or
C()lV~1VIONWF,A.LTf[
KENTUCKY.
BOONr~ COlJNTY cmcurr COURT
54'h .]UmCfAL'nrSTJUCl'
CA~KNo. 05Cl00436
,MILlmEDbJ31l0'l\ et.al
v.
STANLEYlVi. Cl:lES,LEY.; et at
DEFENDANT
TENTH INTERIJ\'~RE9ErVER',SREPQ~T
von
011AprilB,
2009, asking IR
Name
Reason
$6,848:71
t~<?~~~~~,
+-
7/1Si2009
S;2,OOO,()O
LO<lir.d11llolJ.GrsemcI.l'$
"R;ce'~tl;i;-ill'g!\ fro~i'(GjTt'(),~i'''':
4P..el1dad find Others
7115/2009
_.
, Teacher
ll~~~;'~:;i'i~~:;;;
C;;;;;';.7t;j;;'-' '--s29;i'o'O:o-O- ,'---"'-"'--:-9'-3""'/').--=,0-=-0""'9-+; "';-R'(!ceearnillgi"frolll Einstein
El!is'Pi.lrl~Race Coni's,e
$555.00
Court ':;;Allg11st
't, :;00'-) 0,
9/3/2009
der, instructed iIs HZto <!i rcctly 1>"y for any subsequent
.. ] ..
ELECTRONICALLY FILED 01/06/201514:55
/ MOTI / A 1500067
""
Case: 1:15-cv-00083-PCE
(0
maintain, protect and preserve Tandy's assets without further order from this Court,
thereby precluding the necessity for Tandy's Operations Manager, Patricia Cunniugham,
to make any such payments [rom Tandy accounts and permitting prompt payment by IR.
Following that Order, IR prepared letters to each such vendor, identifying a list of horses
known by IR. to be Tandy horses
811d requesting
services authorized by Tandy horse trainers and/or stable manager, Mr. Terrazas.
Accordingly, IR has reviewed invoices sent to IR by the vendors. m ..used all objective
ordinary and necessary business expense test; duly taking into account this Court's
restriction of use offunds held by lR to preclude reimbursement for expenses that would
personally benefit Tandy's owners or their family members, and to preclude application
of receivership funds
with respect to the modified ninth set of expenses, per the August 7, 2009, Order (Chart
2) and the tenth set of expenses received by lR (Chart 3), copies of which (Ire attached to
this Report.
FUND BALANCE
As of September 11,2009, the KYFP Receivership's
including accrued interest (since the filing of IR>~Ninth Report) of $<1. 12. This balance
includes nil of the approved expenses paid in charts 2, 3 and 4.
-2FLECTRONICAL'~YFIl.FD01/0G/201!;>1455
I MOTI I A1500067
I CONFIRMATIONNUM[lFR383362
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 58 of 114 PAGEID #: 344
[lJl1rl~
LLC account to pay the following expenses listed in Chart ?- below totaling $14,957.66.
These expenses are related to corporate assets shown to be owned by Tandy through
documents submitted to IR and are necessary to preserve and protect Tandy's assets,
including but not 1imited to its interests in the stallion Curlin, the thoroughbred Einstein,
and Tandy's twenty-six other horses.
Expenses
Trainer Total
Amount
Purpose
Reimbursement of Ackerman
$7,200.0q. __" ....Jll~ice to I::_Gul1nillgham
__
$7J.57c_ .____ ~lax2: for el~_e_
Emplo~e Expens._e_
-C;:;;-ld Total:
$14957.66
it
expenses arc related to corporate assets shown to be owned by Tandy through documents
subm itted to JR .
.!>~1?~cD!~:;;_s
C::_:I..;.Jj
P""'ll:..:;io::_:n.:;___-r--
Trainer Total
Veterinarian Total
Transportation Total
1----:-:-_-:----:-
Rcceivcrs
f:1illCl:e:'it
:--_1-
Fee Total
-j,''il:;11-'-- _ .. --
-'::A;:.:I,llc,7-'0ll
~\ f
---:-.__
J~~>.'.?
..3-
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 59 of 114 PAGEID #: 345
Misccllanccnis---"--
$6,720.50
~C~"='_l'o'~t-a-'I---==-~'-'
--
_._E~1..,218.68::.....L
APPROVED
EXPENSES
--~~___
.--.
_
lIZ has also approved and directly paid the expenses listed
ill Chart
4 below
totaling $95,163.91, a breakdown for and copies of which are attached as Exhibit B.
These expenses are related to corporate assets shown to be owned by Tandy through
documents submitted to Ik,
E
n
'_;;!J~.s.9~.iption
Trainer Total
Transportation Total
A moun e
._518 %5,50
Veterinarian Total
Breeding Total
Farrier Service
Receiver Fees
r:-::---:~--
Attorney Fees
Stalliou Exwise
Horse Sales Expenses
Real Estate
J3..~Ci.llg.Fe.~ __
Hillcrest Parrn
.@2E_elt~
..~--.-'--"'-'---'~'-""-'---'-~_:_._. _
._. $100.00 Entry Fees (Churchill Dqwllsl
-..$994.Bt!- Feed for the horses
.
-,----
__
-..'.-.--.-----=.~~]-.
_._----_.Total
--_._-, __ ,_--. ----
$951163.91
-----,----",.._--_ ,-_.-
-4
ELECTRONICALI_Y flLEO 01(06/2015
NUMGEH 383362
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 60 of 114 PAGEID #: 346
lJlll
(0 pay
three horses,
this Court's orders, creating a sub-account held in the KY},P Receivership to hold
sale proceeds. In subsequent Reports, m. will report the account balances for tile general
and newly created "Equine Sales" account. IR intends to use the Equine Sales subaccount to pay for applicable sales and income taxes, but otherwise, to treat this account
as a payment account of'Jast resort.
IR has also entered Tandy's broodmares, along with their foals and any 2008 or
2009 foals in either the Fasig-Tipton Select sale, or the Keeneland Breeds tock sale, to
lake place in October and November, 2009, respectively, To the extent Tandy's Tier HI
horses remain who have shown any ability to race, IR. is actively seeking private
purchasers, including having its
the extent
m cannot sell
expert
a Tiel' In horse before year's end, and with the knowledge and
consent of counsel, this Court and following its expert's reconunendations, IR may be
left with little choice but to give those horses away if suitable homes can be found for
those horses.
Given the current proceedings in this Court, and in (he United Stutes District
Court, E.D. Kentucky, N, Division, Covington (Criminal Case No. 07-39-DCR)(the
"Federal Court"), lIZ has also been working with counsel, as well as the United States
Attorneys and United States Marshals Service
[0
(0
protecting and preserving assets under the supervision of!R is developed, and subject to
further
COUl1 order,
lR continues
(0
ill a manner which best protects Tandy beneficiaries, taking into account the forfeiture
Order issued by the Federal Court.
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 61 of 114 PAGEID #: 347
ill Ott
from Tandy's failure to pay an outstanding balance clue on file airplane based 011a .
mortgage 110teexecuted and personally guaranteed by the Defendants Mr. Gallion and
Mr. Cunningham. As this Court is well aware, IR was precluded from paying the
monthly mortgage amount due for the airplane based
011 this
business purpose existed. Accordingly, the mortgage became in default, the Defendants
did not make further payments, and the Default Judgment ensued. On August 17, 2009,
the Fayette County Circu it Court issued an Order of Garnishment, received by IR on
August 19, 2009. On September 8, 2009, TR filed an Answer with thaI Court. and counsel
fOI
First National Bank Midwest. Following its Answer, IR also discussed this matter
(0
point in time, counsel will communicate with IR about the next steps to toke.
6
ELI~CTRONICALL y FILED 01/C()/20~ 5 '4:55
Case: 1:15-cv-00083-PCE
10
the Federal
COli
It.
Submitted:
.'/ .
ELECTRONICALLYrILED01106/201514:55
I MOTI
Case: 1:15-cv-00083-PCE
CERTlF!CATE
A
this the
OF SERVICE
Oil
of_~~2009,
HOll.
HOll.
Andre F. Regard
Lexington, KY 40507
aregard@aol.c.Qlll
COl'S
PO Box 72218
Newport, Kenrucky 41072
Frankfort, KY 40601
~_~~-&
1 MOTI
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 64 of 114 PAGEID #: 350
PLAINTIIl'F.
v.
FILED
DEFENDANTS'
VICTITvIS' RESPONSE
m:FENpANTS
AL.
the state
court
J" Victims
in
action ill older to allow those Victims to be brought into payment-parity with (be
remaining Victims. The (lnfted'Stntes ha:l abo raised issues related to the payment of altorneys'
fees.
The Victims Advocate
for restiuuion.
recommends
lilt United
(ron)
SliMS lh~l
nlJ. Victims are entitled to a pro rata portion of funds distributed as restitution by (his Court,
The Court's Restitution
w)m!
the Defendants
510lc from
the contructual Icc each victim would have been hligatcd tc pay bad nocrimiuul
El.ECIHONICALLY
FILED 01/061201514:55
MO'II
amount plus
offense been
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 65 of 114 PAGEID #: 351
Case: 2:07-cr-00039-DCR-JGW
committed.
Those amounts di ITer among Victims, even among Victims whose settlement
$23,500,000.00
February 20 J 0
$12,800,000.00
Oct ober 20 I 0
$ 4,500,000.00
Escrowed
257,021.00
33,664.00
funds
Attached hereto are the total individual distribution amounts that arc necessary for the Court to
calculate deductions
The United States recognizes that the majority of Victims have fee contracts with the
undersigned who has represented
them ill multiple actions based upon the same basic facts and
evidence, However, the United States suggests that it may be necessary for the Court to
determine "whether and to what extent a fee has been earned from the assets collected by the
United States" find points out that certain assets are exempt from execution in the stale civil
action.
The United States also suggests that the Court may need to notify the victims of issues
related to Stich Ices And its' proposed Order provides for restitution
payments
10
be mode directly
to tile Victims, without dcducrion for attorney fees pursuant to tile Victims' Attorney's
14:;;5 1 MOTI
lien.
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 66 of 114 PAGEID #: 352
Case; 2;Q7-cr-00039-DCR-JGW
24443
The payment of the Victim's attorney's fees has been previously discussed in this action,
initially at the Sentencing Hearing on August 17,2009 and on several occasions thereafter,
\Vhether an attorney's fcc is owed by the Victims, as the United States has noted, is a contractual
issue but it is also a component of the Court's Restitution Judgment Order as the atcomey'a fee is
part of the restitution owed by the Defendants. The pertinent tenus of'the fee contract were set
forth in Defendants' Victims' Response to the United States Pre-Hearing Memorandum. Doc.
l367. The terms of that contract extend to the Victims representation in all actions.
The Victim's attorney's lien arises from contract, Kentucky statute and at cquiry.
Kentucky's attorney's lien statute provides: "Each attorney shall have a lien upon all
claims .... upon which suit has been instituted, for the amount of any fee agreed upon by the
parties .... If the action is prosecuted to a recovery of money or property, the attorney shill! have a
lien upon thcjudgment recovered .... for his fee." KRS 367.460. The state court action against
Gallion and Cunningham was prosecuted "to a recovery of money or property". An attorney's
lien is superior to the government's restitution lien. USA v, Brosseau, 4461;. Supp, 2d 659, 661
(N.D. Tex. 2006) All attorney also has an "equitable lien" on amounts recovered in a state
proceeding. USA p. Kantieniecki, 261 F. Supp. 683 (D.N.H.
court found that equitable principles supported an award of attorney's fees to the lawyer who had
obtained a judgment Ior his client (the defendant in a civillRS proceeding) in
court found tllat because the
attorney's
fund III
question, which
would nut have existed but for the lawyers efforts - equitable principles entitled the lawyer to his
fee.
While this Court may find that the restitution judgment in this action has priority if the
Kentucky Supreme Court were to overturn the tria!
COWl;
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26115 Page: 67 of 114 PAGEID #: 353
Case: 2:07-cr00039DCR-JGW
244<14
alter a determiuation
Regardless, at present, the state court judgment remains in force until the Kentucky Supreme
COUrt were to overturn the trial court judgment,
v,
indicated, lind the United Stales agreed, that the amount of restitution should be calculated to
include the Victim's payi ng a single attorneys fee to their current attorney while the Defendants
were entitled to no fcc. The Court reasoned, and the United States agreed, that the Victims were
obligated to pay at least One fee. The Restitution Judgment includes the contractual fee the
Victim's were forced to incur to recover the settlement funds that were taken from thcrn.2 While
the United States has pointed Out un interesting issue, it has indicated that it is not taking a
positlon on the ultimate disposition of the fee issue. The undersigned believes this issue would
create another accounting factor that unnecessarily
with collaborative
efforts on collection of the restitution judgment for the benefit of the Victims.
As to the present funds, the majority of funds currently available for restitution are derived from
assets the Victims in the
timportantty, the future prosecution of the civil cusc would be affected if the Vietims/Rl!orney's lien is not honored.
If the United States could always claim that the restltution judgment has priority over any additional recovery under
Ihe ~xi~lingJudgment and any future judgment on tho rernainlnj; claim for punitive damages and claims against
other lawyers, lite civil ease would end. Without a means 10par their lawyer, the Victims who chose to pursue a
civil case would effectively be dcnied Iheir riglu topursue those claims.
1 "[11e United StaleS argucU lhat attorneys' fees incurred to uncover and litigate ihc defendants' fraud were
reasonable and Ioreseenole costs and f.hat the victims "bad no other alternative bllt to rel<1intile services of a civil
attorney for purpose5 of seeking recovery of their settlement money the defendants Iraudulently took from them."
(Sentencing Memorandum, It 914. pp. 9l2)
.
Case: 1:15-cv-00083-PCE
Cas~: 2:07-cr-00039-DCR-JGW
Doc #; 1375
Filed: 01/02/13
24445
(0
attorney's fee is limited to assets that lire not exempt from execution in state court, a list
.
.
01' those nssets would be required along with the funds derived from their liquidation.
The Victim's Advocate recommends
funds available for restitution.
The Victims'
Respectfully
submitted,
~ERTIFICATJ<~ OF SERVICE
Oil January 2,2013, II copy of the foregoing was served electronically on all parties of
record ill nccordance with the method established under this Court's CMIECF Administrative
Procedures and Standing Order.
lsi Angela M. Ford
VICTIMS' LEGAL REPRESENTATIVE
1 MOTI
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 69 of 114 PAGEID #: 355
Case: 2:07-cr-00039-DCRJGW
Doc
tt:
_. r--.---s-------,.-.--A-M----.
1
r-:::- ----~--.---.-----
~ ----------------r-------4
4
1----.
Total Gross
_~..!.~~~mentB
last Name
:::ro
Abbott
7 Abne~,c/o Carol Barnes on b
8 Abraham'
9 Adams
I~ Adams_
~
Adams
,._
~
Adam:;, c/o Gloria Little
13 Adamson
14 Adkins
15 Akers
10 Alsip
17 Alton
18 Alvey
19 Applegate
50,198.45
f.{nl~tron~TE
22 Atkinson
23 Back
24 Bailey
25 Bailey
~ Ba1l6L,_
27 Baker
~
~?.!J.-.::).0
29 Barnes
30 Bartley, Jr.
31 Baumgardner
~
BaysPlybon
6eJl.~_
_ .
34 Belcher
14 ~~ldlng_
..orry
37 BerrY
36 Bingham
f-~
40
41
42
43
f~
f~
"22 704.13
26~~
1
.I:l!~~~..
... .....
Blair
Blair
_.
Bgg9S
Boono
!3.{}t!.<!f.l~ .. ".
~?wlln_g__
~?~n
Braden
.:16Brame
t~
--:i9' Brantiam
29104.33
23.646.39
23,646.39
_23646.39
23,646.39
53,556.90
23.646~~
61.362.53
23 646.39
50,198.45
57761.73
23,646.39
23,646.3~_
23,646.39
23,6~~
48162.93
6,706.14
1 139,681.20
23,646.39
__. 23:646.3'9
8'O~595'lt
23646.39
~Q,198"~
57,761!g.
23,646.3_~
23,646.39
23,646.39
?}.!646.~.~
22.704.13
,41. Arvin
-~704.13
.
.
23,646.~~
23 646.39
53,556.90
23,646.39
60272.81
23,646.39
24,5~3.39
22.704.13
46~~.Q;~.
22,704.13
- ~646.3-g._--,--
2~!958.?l.
25.90~:2l
( MOTI
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 70 of 114 PAGEID #: 356
Case; 2:07-cr-00039-DCR-JGW
~:------
AM
t.ast Nama
Total Gross
Disbursments
1
2
4
5
152 Brewer
23,646.39
25,903,73
545t orown~--------------r----4~~
235,120.36
66" Browii~--'---
5f :::,;.;._-------
=-"2~~646._~~~
.--
153,556.90
- , ___ ~707.3'L
68 Browflln9,-~o_E!.arahBal~novl
~60 ~mfJeld,
Brumley
c/o NathanielBrurr
61 ~f\Jmrey-Bradford
Brummett
~ Bruner--64 Bryant
~66 Bunock-Penn~~
Burgess
67 Burton
68 Bush
Butler
~70 Cal1}P~
___
71 Cariada
~'
Cantrell
.___
'-'-~ Carma'n-Staton
carter
75 Carter
Cason
Caudill
Centers
~79 chndrees
80 Clark
-------81 Clark
Click
83 Clift
~,
-1t
1[
rw
50,198!~_
23,646.39
23,646.39
2~,646.39
23.646.39
23,646.39
50,196.45
25,903.73
23646.39
23646.39
57,761.73
__ ~~,~~~~I
__
23,~
50,198.45
i,139cS8_~
____J,6.304.93
23646-:39
53,556.90
-, --23-;646:39
__?7.948.14
23,646.39
__ 2~~
'23646"L
.___ g558.90
~='
~~~:~an
'--~~_
=-==--=
186
'84
-85
Coleman
_g Comer.._--
... --------
166,402.86
5~t1~ii45_ __?1,~~~,
39_
57,761.73
~,(46)9
23.646,39
25,903.73
..-.---22:704-:13
~91 f_oo~ ---_____ ... ,,_ __ '--'.~
6,.!..8S6,1_?,
__ 2_~,646.3.lL
02 C;or~.fl.. , ___ ,__ .._
20,207.94
io~on~Q11~_Y_
__
.~.._
__.._]~J646,39
Couch
owlsx',_",,,,,,,,,,,---,_,,
23.6~4
~
~3,482.54
Cox
~97 Cr~-'
------.-------'--291 04'~1
~o"ier
_
Colvin
Combs ------
~.
~.
it
94
ELECTRONICALLYFILEDOlf06f20151tl55
f MOTif
A150006'1f
CONFIRMATION NUM8ER383362
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 71 of 114 PAGEID #: 357
24448
AM
1
2
------Total Gross
'p16bul'.!'~
Last Name
'Sa Creech
'---'-.
--
T9 Criswell
g<?we
~101 Curtis
..
102 Dabriw
Hi3 Daughtery
~105~dson.Glbson
Davis
106 Davis
...~.--.
DaWson
rw7 Dean-'
We
109 Delaney
110 DeSpain
111 Dlle
112 Doser
113 Dots'on
.-- 53 556.90
---t],646.39 .
23,646.39
'-57,761.73
5~6.90
53,556,90
. --23.646.39
23,646r,~~
~646.39
15.204.00
--:r3,646.~~
57.761.73
_'_'23;64,.~
23,646.39
23,646.39
23,646.39
Duff
57.761.73
114317.62Dunaway
~~
23,646.39
116 EdwardsEn9!~.
Edwards-Wood
23,646.39
~.g
23646.39
118 Elliot
..
23,646.39
119 Erp
-_ --s-7Ts1.73
120 EsteE
Estes
23,646.39
122 Ezell
53,5~~~
23,646.39
~124 ~e-6eamon
Pentress
__ ~~,64e.3~_
FitCh, c10 Jason Fitch. Admfiil
1,086.789.65
.
126 Flannery
48'1~
16.929.49
127 FlYnn
26,903.73
128 Foster-Gifford
Franklin
.---......
'--2-3.646.39
129
Franklin
--- ..-------""22)04.13
--.- ....
--.-~
~131r:=-:---..
Frizzell
23.646.39
~ Fug.~J~. .-. ., ..
_. __ 51,~~
6,706.14
Fulks, cJoJames E. Stl.l1'...E.s
....- 975.j.@~~ .
't34 Gaunce
Gay
____~--.-135
57.161.73_
136 Gayheart
23,646.39
137 Gibson
.--------2"'-;646.39I
- _.
rill
.gJ.
-m
rm
:m:
GlbsO.D~E.~._!)ean
139 ------.----Gllbert
-;.7,':140 Gist
s.i\v~~f-_
53,556,90
23.6.46.39
...-.- ..-_.- ...... _ .. _._--.-
141 God~~=~.:==-_
~
9odbY-~ln.:()I1:;____
..___
.lli&tf-W~~ ____
..
50,198.45
._jJdg81:~
.._ ~~,646.~
. !Qc.~
1 MOTI
1 A 1500067
Case: 1:15-cv-00083-PCE
. Case: 2:07-cr-00039-0CR-JGW
24449
B
r+
u, --
__ ..... , . ..".-.-
.....
~-
_.
..
- ..--- ..~.
Total Gross
Last Namo
4
5
144 Oocde-Oruz
Go.",,,,
146
147
Green
Green-------I
Tiall------
151 Hall
~ Hall
~164 Hamelon
Hancock
165 Handley
156 Hanley
157 Harris
~ Harrison
159 Hassler
'160 'HaYden
Heizer
~.
162Hellmualler
Dfsbursmonts
-:l..._."_."~~,.~~~;~
23.646.39
J~5
3.,76L'hl.
.~;~t
rm
1m
23,646.39
53556.90
.
777,007.71
2364'6.39
897449.53
53,656.90
...--- --22)04.13
53,656.90
---~.~-""'Vi49376.68
501 H18.45
23,646.39
. 23,646.39
23,6~~
23,646.39
50 198.45
__ ._
__ ~. 23,6~~~
~164 I:!l!~l!
443,403.63
~ndrlckson, cJo1~ulse Du~
i65 !:i.~.ry_. ___ ,,__ ._
29,104,33
!:!_lg_IJley
--------gor1~~
~167 Hili
50,198.45.
166 Hillard
23!64{l.39
Hllton
511362.53
~
53556;90
~ ~!nkle
H02~er
____ __ 23,646.39.
172 Hood
23,646.39
Hood
..- 23,646.39
"14 Hoover
22,704.13
~5 !:!o.Ektns --- .._----1,139&.~1.20
Horn
176 "Ro'
23.646.39
171 rnio9 _-231646:3'9
178 Hoskins
16,929.49
17$ Hoskins
25.903.73
.l:l.2_ward
_____ ..____
16.929.49
rroo
rm
~
~.
162
~~0~~TNaka-9am~.==l
__ ~.;:~~;.:;~
.
16"3Hughes
164 ~~.Harnass
Hulse
f-186 Humehre~s-----187Hunt
.~ Hunter._~~_
"~J:!.!!tchcraft
20267.94
23,646.39
~11304,2~'
50,198.45
22,704.13
Te5
..____
~~~2:27
22.704.13
ELECTRONICALLYFILEOOI/06/201514:55
I MOTI
I A 1500067 I CONFIRMATIONNUMBER383362
Case: 1:15-cv-00083-PCE
Case: 2:07-cr-00039-DCR-JGW
24450
.-,-----_-----.--~_--~--------~
B
I
AM
"T '----.--:::.._----f---.:..:!,:.:_.--I
~-r--------------l--------~
_L .
. 1
-1
4
Total Gross
Disbursmonls
Last Name
23,646.39
~.~-1Jlli.tChISo_C~====
.~16:e29.49
192 leon
53 656.90~c::=:.,..-.-----....
-----=193 Jacksoh
23,646.39
194 Jacksot]
-_.- ... -2"3.646.39
195 Jackson
50.198.45
- . 7!2.489.6[
~
~
Jacl<~tty_o.~~ldsonJ
James
198 Jeffrey
199 Johnson
~
Johnstclne
f!!}. Jones
202 Jones
203 Jones
204 Jones
205 Jones
._.
50 198.45
16,929!~
23,646.39
23,646.39
--23]46.39
23646,39
~~~s
~
607.946.14
22,704.13
23,646.39
50198.45
Jordan
22704.13
~~
~
~
KellnorNuxoll
Kennedy
41,763.73
25903.73
15,204.41>
23,646.02
23 646.02
_ 25,903.89
53,557.33
-1.468~767.87
212 Kin!:!
m~t1s
..
214 Kluck
215 Krey
216 Larkins
22,70"470
25,903.89-
illLewis
~
__
5:t_5t~~_
i~
Lewis-Mullinix
LltUet
._-
57,76.L3J_
~. ~
._.
" .....__. _.
.____g~
~~-,E.~r:}l_
~
Lon.9.!.....~An\lel~ ~:.?_hack_I~I.<:... ~~._~~:2~
~~\,an-Day
2.2,79j_).Q.
1~J:_oveU, pia P~~__~ljvan & Stl
1 19_!?93.~_
225 Lush
... "
23,646.02
~ ~;~~-~E>.~~a~_~~_-I--~~gHt_
~~
Marlowe
Marro
=1_~46.02
._l4,OB9.11
230 Martin
23' Martin -
50.198.71
---s3:557.33
~~~lL.:_=:-_._..
_._
m
Mason
rm.McClanaha~_.
235 McDaniel
=---- 53.557~I:[
2),64~Q~_
._""
_.'
~,646 ..9~
51~~
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 74 of 114 PAGEID #: 360
Case: 2:07-cr-00039-[)Cf~JGW
24451
B
AM
r-........ ....... .... ,---
2'
Total GrOGS
PIs bu rsmonts
Last Name
-~--'---.-.
M~g!rf.____.__. _..._._____
__ I[!O,_~
~?7 McGuire
238 McGuire
239 McMljrt~_'______
~ Meeco
241
242 Miller
23846.02
23846.02
__
25!I~
_~557.33
50198.71
33,408.62
'Mme;:------23,646.02
. . ___ ~~646.li2
244 Miii6f"----1'(J_~
245 Miller
---- __
246 Miller
_
22,704.30
50,198.71
~ Miller
Minton
25,764.64
~
249 Mlrac~C!o Wllllam_Mlraela0
9261987.63
250 Mitchell
23,~
.
251 Montgome~~. ______
23,646.02
252 Moore
23,646.02
253 Moore
22,704.30
254 MOrris
23.646.02
255 MUddlma~n.Cornlsh
50,198.71
256 Napier
20,288.41
257 Neace
53,557,33
.______~_?.5,93
~ Neal
259 NElVels--- ..---~ ~3~6.02
__ 53,557:~
l~iddle)
~261 Newlin
Noe
6,865.93
~.
6,706,38
Nolan-Dinsmore
Me~s~r--------
_ __ _
,W
-----
263 Pace
264 Parks
Parris
~
~
~
~
~
~
- ---------r5,903.89
__
Peck
---
Peek
~(!nnlngt2~____
Perl<lns
--=
--
53,557.33
50,198.71
-._46,e4i.O(
1,468,767,87
==~,646,02
21,631.32
Peikiiis--'-~'~-------46.840. g-g'
---'
-'_'-(~e(kins) ~~~
_______ =~~~1_~~.:_4,
~
63,557.33
~ Perkins
---23,646~i52274 _.
Pickett - ----- ..,....~-.--.- =~2~?e4
..
275 Pickett
57,761.39
.ill
.m Pht?_lp~~==-=-'=:-'-=
__
?i.
m
.._~-----23~64O{
277 ;~J;;i~-_~~=~~=~-:~~_
.~~ -?~,.?q~-,}~
278 Preston
II}
280 Pro~H-Norman----
f-28i" Pursel
-.-----
...
""-_-,,_,,
57,761.39
___ ~)646.02_
21,798.02
12,276.38
Case: 1:15-cv-00083-PCE
Case: Z:07-cr-00039-DCR-JGW
24452
B
AM
'1
'2. ----------1----1--:"
------------1-------Total Gross
Olsbursments
Last Namo
5
282 Rainwaler
283 Reese
28~ Rentas.c/o Brenda Renlas or
1~~!!9_~es
I~
,!'hodes
287 Riley
288 Rivera
~
Road~_
290 Roberts
291 Roberta
~
Roberts
293 Robinson
54 039,39
29,646.02
72,630.65
23,646,02
__2!_J~~
23,646.02
60,272.57
___21,6~~
975,138.81
25903.89
57,761.39
50,198.71
57761.39
23,646.02
~~:.~
.
22,704.30.
294 Robinson
295 Rogers
296 Rose
.
297 Rose
298 Roseberry. sr.. clo La!!Y..B~ __
1m .~_~ms
~
San.E.L_._~
301 Sapp
~..g_charold
~
Se~_~
304 Seals-Gibson
Sexton
306 Sextor
307 ~l!aron
~
Sh~~Roberts
I~
1,_33.310.56
Short
Sh2_r!.sl..oLinda G. Caudill, E
I~
311 Sidwell
I~
_!3izell.Efe
~
Slilt1en-Jon~~
~
~
~~
Smilh
l!~~(JJ_l!mes
~ nowd~
320 Spears
~! ~!~eleIO!}
322 Iauffer__.._.
J3~_g.!_e51ms__
~hens
__ 23.646.02
43.482.48
646:1i'f
23,646.02
Weslsl.._Sm 1.202817.6t
, .....
16,656.20
26.903.89
. - _. --22.704.30
50,198:71
1,_991.7b1:~1
_
?3,646..:..9_~_
.
.Q, 198].1.
,23
~-
~1!
32!i _~I'!p.h.~~
23.646.02
53,557,33
53,557.33
25,903.89
--23,646:02
~-___
316 Smith
~_ll1ilh
3..1646.02
_~~646.02_
.
23,646.02
__ .-_ 16,656,2_Q_
50,198.71
...__ _'
._J.J61.3~_
5'1.761.39
..
25,903.89
53,557.33
23,646,02=
~~vens_l?n
327 stewart
38.1OO:~_!!
25,903.80
1455
1 MOT I I
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 76 of 114 PAGEID #: 362
Case: 2:07cr00039-0CR-JGW
AM
B
1
--.
..... -- ......
t.z,
_--------
Total Gro55
Di~~..!nls.
Last Nama
5
~
Stidham, c/o M..2!lonalS:.J_onei--' 22,064.16
329 Stone
23,646,02
330 __
Stou(~--50198Tf
~.
.
._.."._._J
..._._
331 Stromow~b:.__
50198.71
Stu~uW
50,H18.71.
~
Sudduth, c/o ShIrley Sudduth _._.1.M1:~.
~ Swl.ll~!:_.
__ .__
...__ 1!.!.63,
t~
335JIlckett
~
53,557,33
~J!!~Y
}.2~r~
23,646.02
338 Taylor
23,646,02
339 Taylor
I
50,198.71
340 Taylor
57 761,39'
341 Thomas
20,286.41
~
ThOIl).Eson
. --'2'3,646.0:[
343 Thompson-McClain
22.704,30
344 Thurma-ri-- ..---2~~
345 Toler, cio Marguerite Tole r, A
53,557.33
~
.!~le!J..9'o Sieve TolC{'on beh
926,987,63
347 Trenl
23,646,02
f3;j8 Tn mble
--23,646.(i2
~
TUCker _.
57.7~~
350 Turner
276,660,95
351 Tumer
16.930,11
~ lumer
-~4.30
~
Tumer
".
.. _ '?:Q_.903.B~
~ Vance
._.25,9~,89
~ Van.!:~.q~~i2l!i:!~
23646.02
356.Y9I-Schneider
'__ .' 23,646,02
~
Walker, .
.
_!!.~!.557
33
~.~ ~,sJ_9_G_h_1.lrlol!.~!2.~.~C!!t_( _~ ~Q,.1.~~.J1.
359 Wallen
f
23,646.02
_~=~--.-
~~~tEl_!S-----=-:-== __
~d==3~,.64Q,02
~
W?!.d_,E_o B.!!UYWard, Admin
~ ,'N,!l!h.purn
363 Walkins
364 Watson
~~Itaker
i~Wh~.
367 While
368 Whit!)
~
Whitlock
~ WhTIt
371 Widner
-----_.---
_ 3OJ67.24
23,646,02
51.362.22
---23,646~O2
~_'
.------
- .'.
.. -
21,63(~
23,646.02
23,646,0;r
--897..i9.eT
---51,761,39
23,646][
810.595.11
J~
Williams, do Todd Williams 0
20,288,4T
373 W~---.. ----r---2590~f89
ELECTRONICALLYFILED01/06/20151455
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 77 of 114 PAGEID #: 363
Case: 2:07-cr-00039-0CR-JGW
24454
h+-
_;;:..B
__
AM__
_------_
~- ---_
..
Total Gross
Disbursments
last Namo
,~,-----.
~1 YY!!!9.ry_.
375 Winer
376 Wolfe
~
Wombles
378 WoOOs
379 Wooten
380 Wright
~
~illlht
382 Wright
383 Wright
~ ~h!_,~
365 Yates
386 Young
387 Zemal1_~_
388
389
.~_~?,.761.3t
23,646.!R_
23646.02
23,646.02
22,704.30
23,646.02
23646:02
23646.02
_
'"
:22 704.30
57,761.39
],761.39
~?t761. 3Jl._
6,706,38
58!794~!L
40799,988.32
,------1
t"""- ...."..",,,,
l-"'--~~--
i.".
1----I
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 78 of 114 PAGEID #: 364
Case: 2:07-cr00039DCRJGW
B
1
r~
.. __.
t2- -.
AM
.--
____
_._-_-
I------~.~---
._-
Total Gross
o 10 bu.rsmc~.!!.
Last Namo
--
w
r;m
,i_._
~
~
g
I~
427
428
f---.
f~
430
431
432
433
434
435
.~ .-.. -._-- .. -...-...
437
438
439
_ ..
I
440
~
442
443
444
[LECTf10NICAl.LY
....
_,..----"'_-
FILED 01/06/2015
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 79 of 114 PAGEID #: 365
ElECTRCNICALLvrILEDolf06f201514:55
MOTif
Case: 1:lS-cv-00083-PCE
Case: 2:07-cr-00039-0Cf~-JGW
24389
CRIMINAL ACTION
NO. Q7~CH.,?9-DCR
'
ELEG'l'JWNI'cALf;.Y FILED
v.
DEFENDANTS
The Victims undersigned leg~l representative, designercd by the Court's Order of Aug US I
16; 2007 (DN 54), states the folloWing ~ Response
10
Hearing,Memorandum,
The United States-is correct in stating that the 2prior disrrlbutlcns made in the .state COW!
civil action did not include the 14 Victims who are not.parties to Ihilt nction, Based uponIssues
raised by the government us to those individuals iltZOlO; the undersigned agreed to escrow.a pro
rata.portion ofthe funds then available for dislriblltioJI, as though the 14 Victims were parties to
{he civil action, as a compromise.
funds to the 14, That
iSS\IC
TIle undersigned,
10
distribute those
was left for the Court to decide. DN 1270 In short, the issue for the
Court.is whether funds collected for the judgment creditors in the clvil action may be paid.to the
14 Victims who are not parties .. Paying judgment funds
10
nonparties
issue of payment parity for the 14 Victims is not. When this issue was initially wised, it was
pointed out that a single Vanguard retirement
nCCOUJl(
of'Defendant Gallion
the undersigned to the United States i~in excess of the amount needed
.-. ~,..,.
10
[hill
was referred
"
ELECTF10NICALl.Y
FILED 01/061201514'55
by
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 81 of 114 PAGEID #: 367
Case: 2:07-cr-00039-DCRJGW
24390
Exhibit I\.
held in escrow in the civil case to be paid to the civil action Victims while also insuring that the
,
14 Victlms who are not plaintiffs receive the same payments under the restitution judgment of
this Court, Under the calculations established by this Court fer restitution payments, the 14
Victims are automatically brought up to payment parity with the victims in the civil action when
this Court orders a distribution of funds.
The United States has raised the issue of whether the fee agreement of the Victims in the
civil case extends to distributions in this action. The fee agreement, available to the Court if
requested, states:
1, Representation of Client by Attorney. The Attorney hereby agrees to represent
the Client in all claims that may arise from an investigation into the distribution of
funds for charitable or other unknown purposes from settlement funds paid by (be
Defendants in the class action filed in Boone Circuit Court, ...
7, Lien on Proceeds, The Client hereby expressly grants the Attorney a flrst and prior
lien on any proceeds of any litigation in which the Attorney represents the Client to
secure the payment of any and all fees or other amounts due under tbe tenus of this
Agreement,
Substantial work was performed in this action. Post-judgment, information related to all
assets discovered in the civil case, including the Vanguard accounts and Sanibel properties, was
provided to the United States after the restitution judgment was entered. The Vanguard accounts
were the subject of a civil action f led in Pennsylvania as Vanguard is registered as a
Pennsylvania company. While not necessarily important here, the Victims who obtained private
Case: 1:15-cv-00083-PCE
Case: 2;07cr00039-DCRJGW
counsel do believe they lire entitled to collect restitution under the MVRA,and obtained and filed
Abstracts of Judgment beginning in September 2009. (Exhibit B). As u result of attempts to
cooperate on the sale of assets and requests by the United States for state court actions to be
dismissed, held in abeyance or for no new actions to be filed, at some point additional action
related to the same assets was put on hold. Regardless, substantial discovery and assistance was
provided to the United SUItes and the fee agreement extends to all lltlgation in which the:clients
were represented.
Correspondence
The United States attached correspondence provided in response to an email exchange
with the undersigned .: Exhibit C. The issue related to the correspondence, other than the fact
thut it was sent, is not clear. Correspondence to plaintiffs in the state civil action is a regular
event, All such correspondence is clearly privileged but this letter
WIIS provided
in good faith as
the attached email exchange suggests and was redacted with encouragement by the United
States. Neither the letter nor inadvertent attachment of client expenses was provided for
publication. As to the sharing of information related to funds collected and distributed in the
state civil action, there is complete agreement. Those amounts must be deducted from restitution
/
distributed
by
this Court.
As to correspondence the United States sends via the victim notification system, the
Victims Representative was not on the service list and has been consistent in her requests to be
copied on the correspondence. Exhibit C.
Litigation was fil ed by Defendant Gallion's ex-wife against the undersigned's escrow
account, as referenced by the United States. A motion to dismiss is pending. Dr. Gallion waited
Case: 2:07-cr-00039-DCR-JGW
10
her ex-husband, despite her knowledge of the annuity and, later, her knowledge of the existence
of the garnishment against the annuity in the civil action, Neither the annuity company nor Dr.
Gallion raised any issue as to Dr. Gallion's claim in its response to the civil garnishment Dr,
Gallion's claim
subject
10 a set
10 half
of the annuity payments may well be valid. The claim may also be
off from transfers made to Dr. Gallion by Defendant Gallion after the civil action
was filed. Any input from the United States on the litigation, their appearance
Or
their
Respectfully submitted,
/sl Angela M, Ford
ANGELA M. FORD
Chevy Chase Plaza
836 Euclid Avenue, Suite 311
Lexington, Kentucky 40502
(859) 268-2923
ELECTRONICAlLY
ru.so
01/06/20151455
1 MOTI
I A 1500067
Case: 1:15-cv-00083-PCE
_--
-_._
Page
or
COMMONWEALTH
lwmlF:
CIVIL
~1.uJDRED ABBOTT
et
CIRCUIT
KGNTUCKY
COURT
DIVISl()N In
NO. 05-Cl~'136
ACTION
Wr.,AIN'l'IFF$ .
a L,
V3
$'l'ANLEY CJl1i:SU~Y,
et ai,
***
TI~NSCRIPT
OF PROC~EDJNG~
Nov ember
He ar d befon'\
Scln'and,
Lane',
the
Doono
Circuit
IU;PORTER:
,Jud.ge jamc;~, R.
Court,
County,
k 'k~'
2014
Honorable
54:tb -Judicial
3UL'lingtc;r),
13,
6025 il.ogerB
l<cntLlcky
on Hovemb~r
11:00 a.m.
* *~:
~"},'
.J_'
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 85 of 114 PAGEID #: 371
._---------------_----_
.._---------,
Page 2
A P PEA
RAN
C E S
2
3
5
6
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 86 of 114 PAGEID #: 372
-_.-----------,
Page
1
will be.
MR. SNYDER:
in the settlement
conference is confj.dantial.
MS. FORD:
MR.
MS. FORD:
SNYDER:
--
10
MR. SNYDER:
11
MS. FORD:
12
MR. SNYDER:
13
settlement.
14
you.
15
16
as to the
--
I talked about
--
releases.
--
I didn't
prior
is inappx-opriate.
17
THE COURT:
18
MS. FORD:
Let's address
The Plaintiffs
let me see,
19
20
in this case, and what the damages are, are also very
21
c10ar.
22
23
attachment
24
that identifies
2 .)(-
And it
the record
2,0
Case: 1:15-cv-00083-PCE
Page 21
1
numbers.
A was to receive X
8
9
The distribution
calculation
He
10
process.
11
first distribution
12
13
ltl
15
methodology
16
17
approving
18
19
time.
it.
There
and
20r
21
22
b8fo~e
23
case.
It was discoveccd
24
25
I MoTI
in
I A '500067
I CONFIRMATI()NNUM8ER38336?
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 88 of 114 PAGEID #: 374
Page 22
1
and Alabama.
So, there are, in tact, additional Pla.intiffs
judgment.
Settlement Agreement,
Plaintiffs.
12
13
10
11
THE COURT:
14
MS. FORD:
Yes.
15
If
16
1'7
18
19
20
21
22
23
24
Lawye
2.5
they may
ELECTRONICALLYFILED01/061201511155
Case: 1:15-cv-00083-PCE
r---------------------------------------------~--------.----------------~
Page 23
1
the people who have money stolen from them that are
Sett.lement Agreement,
THE COURT:
So, it's
10
on the grid arB the ones that are to get the money?
11
MS. FORD:
12
13
1<1
15
16
17
would be entitled
18
19
to that perhaps.
award, they
20
),5,
in
21
22
23
24
25
their settlement
ElECTRONICALI.Y
rilED
What was
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 90 of 114 PAGEID #: 376
Page 24
1
2
]
THE COURT:
grid is enough
MS. FORD:
create confusion
various documents.
is havi.ng the
10
11
12
13
14
15
16
17
18
those calculations.
19
20
c l ea re r .
21
And
11m relying on
The calculations
are in the
22
23
24
25
ELEcmONICALL
Y FILED 01/06/201514;55
MOTI 1 A 150006J
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 91 of 114 PAGEID #: 377
Stanley M. Chesley
..
Judge Ruehlrnan
Petitioner
v.
Oil
whether the particular facts warrant the requested relief, the attached Supporting Memo
primarily deals with the facts that warrant the requested relief.
An injuncticn is an equitable remedy. An application for
sound discretion of thi:, Court.
I
Chesley's
Verified Memorandum
simultaneously. Terms
1101
Perkins
I'. Quaker
injunction is addressed
1 MOTI
(0
the
fill
~CI
Case: 1:15-cv-00083-PCE
N.E.20 595. Whether an injunction will be granted depends on the character of the case, thc
peculiar facts involved, and other factors, among which arc (hose relating
convenience.
(0
Id. It applies ill those instances when the law has failed to make provision 101'
some right about to be violated. Ricard Boiler & Engine Co. v. Benner (1904), 14 Ohio Dec.
357, 1904 WL 729. It is, therefore, a preventative remedy, which guards against future injury
rather than affording redress for past wrongs.
](I.
This Court must consider the following When ruling on a motion for a injunctive relief:
"whether (I) the movant [Chesley] has shown a strong or substuntlal lik ellhood
01'
probability of
success on the merits, (2) the movant [Chesley] has shown irreparable injury, (3) the preliminary
injunction could harm third parties, and (4) (he public interest would be served by issuing the
preliminary injunction."
Johnson v. Morris (1995), 108 Ohio App.3d 343, 352, 670 N,E.2d
outweighs any potential harm to the [nonmoving purty] if on injunction is issued." ~Q,.quoting
111 re Del.orean Motor Co. (C.A.6, 1985), 755 F.2d 1223.
The facts detailed in the Supporting Memo show the siguifieunt irreparable harm that
awalts Chesley, innocent third-parties and (he Unknown Respondents if the ongoing behavior of
l-ord is not corrected by this Court's granting the requested relief requested before Ford is
allowed to register or domesticate the Chesley Judgment, issue subpo enus and take collection
action in the State of Ohio.
ELEcmONICAlL
Y FIL[D 01/06/2015
14:55 / MOTI
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 93 of 114 PAGEID #: 379
Respectfully submitted,
lsi Vincent E. /yf.m!.>:((J:....r_~_
Vincent B. Mauer (0038997)
FROST BROWN TODD LLC
3300 Great American Towel'
301 E. Fourth Street
Cincinnati, Ohio 45202
51365J6785
Fax 5) 3-651-6981
vmauer@fbtlaw:com
Sheryl G. Snyder
FROST BROWN TODD LLC
400 West Market Street
Suite 3200
Louisville, KY 40202
snyder@fbtlaw,tonl
ElECTRONICAllY
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 94 of 114 PAGEID #: 380
Case
Stanley M. Chesley,
No.A_j_S- 0'00 6 7
Judgc Ruehlman
Petitioner
v.
EN ERED
JAN 072015
R espondents.
mlm II
DI09138670
EX PARl'ETEMPORARY
RESTRAINING ORDER AGAINST CERTAIN ACTIONS BY
RESPONDENTS ANI) ORDER SETTING HEAJUNG
This matter came before the Court on January 7, 2015 at an ex parte conference. The
Court's record includes the Verified Petition For Declaratory Judgment And Injunctive Relief
(the "Petition") and Petitioner's
Petitioner's Verified Memorandum in Support of Motion for Injunctive Relief (the "Supporting
Memo"). Both the Petition and the Supporting Memorandum are verified and thus are treated as
affidavit evidence at this early stage in the proceeding.
terms
in this EX PARTE
TEMPORARY
RESTRAINfNG
ORDER
(I).'
substantial likelihood or probability of success on the merits, (2) the movant [Chesley] has
shown irreparable injury, (3) the preliminary injunction could harm third parties, and (4) the
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 95 of 114 PAGEID #: 381
Johnson v. Morris
(1995), 108 Ohio App.3d 343, 352, 670 N.E.2d 1023. Moreover, relief is appropriate if Chesley
shows serious questions going to the merits and Irreparable harm which decidedly outweighs any
potential
10
the known
Respondent, Ford, is impossible, impracticable or might prompt Ford to quickly take action to
cause the very harms that are the subject of the Petition.
argument - if Ford receives notice of the Petition and Motion without prior entry of ex parte
temporary protection, ford might as a clerical matter cause the registration or domestication of
the Chesley Judgment and issue discovery to Ohio citizens, residents and domiciles before this
Court's hearing on the Motion.
2014 e-mail
10 Chesley's
counsel and given the easy and clerical nature of the efforts Ford might
possible discovery and collection action. Chesley, Chesley'S wife, and WSBC are Ohio entities
resident in Hamilton County, Ohio.
After a hearing the arguments
prelimi nary Findings of Fact and Conclusions of Law concerning the relief sought in the Petition
and the Motion.
All of the following preliminary findings of fact and conclusions of law an:
subject to further review by the Court during this proceeding, particularly since this Court may
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26115 Page: 96 of 114 PAGEID #: 382
.Iater direct addition of certain parties to this case who may revisit any of the following
preliminary findings of fact and conclusions of law,
FINDfNGS OF FACT AND CONCLUSIONS
A,
OF LAW;
this matter. It seems likely that Ford or other counsel for the Unknown Respondents will seek to
register or domesticate the Chesley Judgment in Ohio in part because Ford has stated that she
intends to demand depositions
depositions.
Hamilton County, Ohio due to the residence of Chesley and certain of Ford's stated targets, in
that event the Chesley Judgment will be treated by this Ohio court as an Ohio judgment.
The
Court believes that it will ultimately conclude (i) as a matter of Ohio Jaw that as a judgment
debtor, Chesley is entitled to know the total amount he owes on the Chesley Judgment and (ii) as
a matter of fact that Chesley has been denied access to this information,
B.
himself and third parties to be suffered if the Chesley Judgment is used as an Ohio judgment
without first being provided the information sought in the Petition,
opportunity to stay proceedings
filing of a voluntary petition under the United Stales Bankruptcy Code, or (iii) by settlement with
some Or all of the Unknown Respondents damages Chesley and has the potential to damage
third party from whom Ford seeks informatlon
any
The requested
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 97 of 114 PAGEID #: 383
. Petition and Motion has a strong likelihood of benefitting the Court and
COl1l1S
in Kentucky
because the actual total amount owed on the Chesley Judgment will be relevant to issues that
courts
parties and represents only a minor harm to the Respondents because Ford should have ready
access to most of the information
to
D.
The public interest would be served by issuing the requested relief. The process
of administering justlce fairly in Ohio and Kentucky will be enhanced if relief is granted. Civil
litigation is conducted with the full disclosure of relevant information and the information sought
by Chesley is relevant.
damages suffered by particular the Abbott Case plaintiffs if that case had been pending in this
Court and the need for that disclosure (including the enhanced possibility of settlement) is just as
present and important
ORDERS AS FOLLOWS:
I.
For the next 14 days, Respondent ford, ally co-counsel acting with her and any
any action in the Slate of Ohio to enforce the Chesley Judgment or (ii) serve any Chesley asset
related discovery
2.
OJ)
For the next 14 days, Respondent ford, any co-counsel acting with her and any
\
other Ohio lawyer representi ng any of the Unknown Respondents are enjoined from making any
Case: 1:15-cv-00083-PCE
. filing in any Ohio court that would be or could be part of an effort to domesticate or register the
Chesley Judgment in Ohio;
4.
. For the next 14 days, Ford, the Unknown Respondents and any other person
acting on behalf of the Unknown Respondents arc preliminarily enjoined from taking any action
to collect the Chesley Judgment in the State of Ohio from any Ohio resident, Ohio citizen or
Ohio domiciled entity, other than Chesley;
S.
For the next 14 days, Ford, the Unknown Respondents and any other person
acting on behalf of Ford and the Unknown Respondents are preliminarily enjoined from issuing
any subpoena seeking documents or testimony to any Ohio resident, Ohio citizen or Ohio
domiciled entity (other than Chesley) if the purpose of the requested documents or testimony
would be to obtain information related to any effort to enforce the Chesley Judgment;
6.
For the next 14 clays, Ford, the Unknown Respondents and any other person
acting on behalf of Ford or the Unknown Respondents are preliminarily enjoined and prohibited
I
from destroying, damaging or secreting any documents or electronically stored information
relevant to any of the issues described in this Petition, the Motion or the Supporting Memo
including but not limited to any document Or electronic information that reflects any (i)
collection' of funds collected and/or credited against the Criminal Defendants Judgment, (ii)
restitution obligations of the Criminals, (iii) forfeiture of any assets in the Criminal Case. (iv)
funds Ford or any affiliated entity transferred to or from Johnston, (v) funds transferred to or for
the benefit of any Criminal Case victims who are not Abbott Case plaintiffs; (vi) amounts
distributed to the Abbott Case plaintiffs; (vi) operation of the Tandy LLC receivership; (vii)
funds transferred to or subsequently
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 99 of 114 PAGEID #: 385
Criminal Case or the Abbott Case, and (viii) the legal fees and expenses of Ford and her cocounsel in (he Abbort Case; and
7.
Restraining Order
improperly or irreparably damages (heir position and relief cannot wait more than 14 days, Ford
is invitcd to contact the Court and set this matter for a hearing prior to the hearing set below.
ISSUE TO BE CONSIDERED
or some of them as
apparently asserted by Ford, are Chesley's judgment creditors and real parties in interest in this
proceeding.
Therefore, this Court will first consider if steps must be taken to make those persons
or entities parties
(0
The Court is considering the following plan and the parties should be prepared to address
it at the next hearing in this matter:
Should respondent ford be offered the option to either (a) provide to the Hamilton
Cou
Unknown Respondents-so
Court
Memo can be served on the Unknown Respondents by the Hamilton County Clerk
of Court, I orIb) facilitate the filing of a Notice of Appearance with the Hamilton
County, Ohio Clerk of Court for each and everyone
Respondents
the
appearing Ohio counsel will certify to the Court that said Ohio counsel provided a
copy of the Petition, Motion and Supporting
Respondents for whom that Ohio counsel appears ill this Court.
I
If option "a" is chosen. Ford shall notify Chesley's counsel who will provide
Court adequate copies of Ihe Petition, Motion and Supporting Memo for service by
Ford.
10
Clerk of
listed by
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26115 Page: 100 of 114 PAGEID #: 386
. If'Rcspondcnt ford wants to agree with either the "a" or "b" option described in this paragraph,
the Court invites her to so indicate and the Court will conduct a telephone conference at which
the Court will extend the prohibitions in this Temporary Restraining Order for a period of time
sufficient to cause the Unknown Respondents to receiver service of Chesley's filings and
possibly become parties and then set a briefing schedule as discussed below.
Criminal Defendants Judgment, (it) if any assets were forfeited in the Criminal Case and if any
restitution was paid ill the Criminal Case, (iii) when any assets wen: seized or forfeited and any
restitution payments were made so that Chesley can check the accuracy of Ford's pre-judgment
Case: 1:15-cv-00083-PCE
... arid post-judgment interest calculations, (iv) the amount collected by Ford using the Criminal
Defendants Judgment and not distributed to her clients, and (v) the total amount distributed
10
each of Chesley's Judgment Creditors in both the Settled Case and the Abbott Case before
Respondents (i) take any action in the State of Ohio to enforce the Chesley Judgment or (ii) Serve
any Chesley asset related discovery On any Ohio entity, except Chesley;
Whether Ford, the Unknown Respondents and any other person acting on behalf of the
Unknown Respondents should be permanently enjoined from taking any action to collect the
Chesley Judgment in the State of Ohio from any Ohio resident, Ohio citizen or Ohio domiciled
entity ( other than Chesley), until 90 days after Chesley has received all of the information that
this Court declares Chesley is entitled to receive;
Whelher Ford, the Unknown Respondents and any other person acting on behalf of the
should be permanently
from destroying,
damaging or secreting any documents relevant to any of the issues described in this Petition, the
MOtion or the Supporting Memo including but not limited to any document or electronic
information that reflects any (i) collection of funds collected and/or credited against the Criminal
Defendants Judgment, (ii) restitution obligations of the Criminals, (iii) forfeiture of any assets in
the Criminal Case, (iv) funds Ford or any affiliated entity transferred to or from Johnston, (v)
funds transferred to or for the benefit of any Criminal Case victims who are not Abbott Case
plaintiffs; (vi) amounts distributed to the Abbott Case plaintiffs; (vi) operation of the Tandy LLC
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 102 of 114 PAGEID #: 388
. - rctcivership;
The ex parte relief lasts for no more than 14 days, unless extended by the Court or by
agreement of the parties. This matter will come on for a hearing on the Motion's request for a
preliminary injunction and consideration of (he status of the Unknown Respondents on January
Petitioner did not request and the Court does not currently intend
to combine this hearing with the hearing on the merits of the Motion us permitted by Ohio Civ.
R. 65(C).
Chesley'S
counsel
will electronically
Restraining Order on Respondent ford. The H amilton County, Ohio Clerk of Court shall serve
this Temporary
Restraining
Order on Respondent
-Wo
15
JVOG
Copies to:
Vincent E. Mauer, Esq.
mOST BROWN TODD LLC
ROBERT P. RUEHl.MAN
Co t of Common PIOB!)
Harruuon County. OhIo
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 103 of 114 PAGEID #: 389
M cHESLEY
STIINLEY
PI.A1N'l'1rF
Use below
all
...-
vs
0"
pleadings
.. No.
]\(~GELII
number
future
II 150006'1
SUMMONS
11 fORD
---I)-~'l'
ANGEL/\ ~l FORD
636 EUCLID AVENUE
D-l.
SUITE 311
LEXINGTON KY 40502
You a r e no t t f i e d
that you have been
named
Defendant
(s) in a complaint
riled
by
M CHESLEY
SThNLEY
45243
OH
in the HamLltDn
County,
COMMON PLEAS CIVIL
Dlvioion.
TRACY WINKLER, 1000 MAIN STREET ROOM 315,
CINCINNATI, OH 45202.
You are hereby eummooe d a n d required
to s e r v e upon the plailltiff'~
attorney,
o r up on the p l e ant r r r , if he/~h~ hl\~ no attorney
or record,
a
copy of an an3we~ to the complaint
within twenty-eight
(2B) dilY~ aft"r
s e r-vt ce of t.h Ls s ummon s on you, exclusive
of t.h e day of. service.
Your
answer mus t, be tiled with the Court within three
(3) day. after the
service
of a copy
Further,
It
aq
ou
a Noti
fil~
you fail
i
t.
u
vou
an
of the an~wer
c to
~ic~tion
Local
Rule
Form to r
to appeAr
and
for
the
relief
on the plaintifr'~
LO of Hamilt.on
notice
of
ce
Lv
defend,
deme
nd
judqument
in t
h
attorney.
count
illl
future
yO~J
he
by defdult
will
complaint
tt.a
ch
0.11so
nq
required
be rendered
THA<;'Y WINKLER
Cl~rk.,
Court
of
\.omJllon
Plc()!'>
Hamilton
County,
Ohio
4S202
By
RICK
HOfMANN
Depllty
Do t e .
111111111111111111111111111111111111111111111111111111111111
January
8.
201S
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 104 of 114 PAGEID #: 390
Stanley M. Chesley,
Judge Ruehlman
Petitioner
v.
AFFIDAVIT OF VINCENT E,
MAUER RE NOTlCI~ TO
RESPONDENT FORD
I am over 18 years of age and have never been declared mentally incompetent.
have personal knowledge of the facts set forth herein. Iam one of the counsel representing the
Petitioner in this matter. This affidavit is made for use in the ubove-captioned case.
2.
On January 7, 2015 I caused the mailing of a (me and complete file stamped copy
POl'
Petitioner'S Motion For Order Restraining Registration and Enforcement of Kentucky Judgment
and Document Destruction
in
Support of Motion for Injunctive Relief (the "Supporting Memo") to Respondent Angela M.
Ford (,'Ford") by first class United States mail, postage prepaid, See Exhibit A.
3.
PARTE TEMPORARY
RESPONDENTS
See Exhibit B,
RESTRAlNTNG
r know
ORDER
AGAINST
CERTAIN
ACTIONS BY
that Ford received thls e-mail because she responded to it, see Exhibit
[3,
A copy of the Temporary Restraining Order was also mailed to ford by first class United Stales
mail, postage prepaid. Ford has actual knowledge of tile hearing Set for January 14,2015 ill the
above-captioned matter,
./
AFFD
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 105 of 114 PAGEID #: 391
4.
(Ill
11
10 that
send Ford all,)' documents she hail notyct reecivcd, sec Exhibit D.
iii
r certiiy that acopy of the foregoing was served on, Angela M. Ford, ESCh Chevy CIHt~e
Plaza, 836 EUclid. Avenue, Suite 3 J I, Lexington, KY 40502 by first class ~Ji\it(~dStates mail,
postage prcpa!.d,
Oil
JanuaryI 2, 2015.
.
lsi Vince/.'f_E. J\1f!llill.:_
2
RECTRONICALLY
FILED 01/121201514:21
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 106 of 114 PAGEID #: 392
!r~'T'""
k\~
J[1fOStf
Brown lOd(iu.c
A T
r o k Ii
~ \.
s'
Vincent E. Mauer
Member'
513.651.1i785 (t)
513.6St.G981 (f)
.1
vrnauer@fbtlaw.coni
January 7, 20J 5
Angela M. Ford, Esq.
Chevy Chase Plaza
836 Euclid Avenue, Suite 311
'Lexington, Kentucky 40502
Rc:
Stall{")'}.if.
Enclosed pleaseflnd copies of three pleadings I flied 011 behtdfof Stanley M: Chesley in.
th.~Hamilton County, Ohio Court-of Common Pleas y~ster(hry.
Enclosures
Case: 1:15-cv-00083-PCE
Sont:
1'0:
Cc:
Subjocl:
mO In case A1500067
,
Ms..Eqrq, att(\dle~ please fhKhHl order entered in response to the pleadings I e-mailed
yo'il (;JII see,'nlia,lrlng has./jeen senOi.Januiiry 14,2015 at 9:00AM oefdre J(ldge R(le/ilnwri,
AS
The jud~ewill be on vacation the last two weeks In Januory. III! dtrected'us to; tell that far;tto"YoU emu to lnvltr-i
of tile heari'ig.j~to rchnmry jf vou so choose. so thar YOll would have tune to react to. our flllngs. If you
wont to move the hCllring into febf\laIY, please let me know and give me some dates convenlent for yO\1and any Ohio
counsel vou ret'dn ....1wHi then address tl1\, change with the Court's .~taff.
~11 adjournment
1.1,(;
;)/).
1 t;~H f'cw: $f!R')I, ~I~c;nt)..'~, (HIA:;.<n
,t:J..O~.'ij-i'6'i ,()'fHIl $l'l.e-!lf
16tl,~).?~
I~!):!" i {i1:.~~1.4'~'rIM
JR'~~~I,f}~lty,.Q.)('!l
J.tW~J)~
..W~~j~
,
, "
'~~90ri~!f,)l.\rl"'..,t\r;Ml~/~/l
t~.o".""
Case: 1:15-cv-00083-PCE
uonald J, Rafferty
COHEN TODD KITE & STI\NFORD, UC
250 E, Fifth Street, Suite 2350
Cincinnati, Ohio 45202
Direct: (5l3) 333-5243
Mobile: (513) 703-2462
NOTICE: This electronic malt transmission is for the use of the named Individual or entity to which It is directed and may
contain information thai Is privileged or confidential, It Is not to be transmitted to or received by anyone other than the
named addressee (or a person authorized to deliver It to the named addressee). It Is not to be copied or forwarded to any
unauthorized persons. If you have received this electronic mail transmission in error, delete II from your system without
copying or forw<lrdingIt, and notify the sender of the error by replyIng via email or by calling Frost Brown Todd LLC at
(513) 6516800 (collect), so that our address record can be corrected.
1421
ArFD
Case: 1:15-cv-00083-PCE
Maller, Vincent E.
From:
Sent:
To:
Co:
Snydl!r, SherYl
Subject:
hearing in Feb,
[ have not been properly served with your pctitlou and no effort was made (0 provide lilly notice prior to (he
hearing, /.1..') your ci vii rules require, Since r am nol yet a party and have.not retained counscl.l.will not.agree
any orders,
Sent Irom Illy iPh0.llC
3:24,PM, "Mattei"
Vinceut
E," <Y.1x1~11.~J.@tlltlaw.C<:im>wrote:
M~,Ford, attachet] l>lensc find III)RAFT fOI: your-review of a limited. Agreed Order extCI1\.Hllg
ihc restrlctionsin I.hC TRQ lind settlngthe hellring ill, Feb, 2015, I have 11\)1 yet contacted tlie
court In actually resetthe hearing because 1 have not yetreceived your.list'of.preferred dates,
This DRAfT has not yet.been npprovcd by the cllcntso lmay have minor ndjustmellt:>; but given
the need to track ihc TI(O; l.do Hot expect at:ly~i.gt1.ificaIlUsstles,
.
..
Please review this and give my yOIIl'tho\lghts .Also,j)lc'ise send AsAl> dales for the baring ill.
February iJS we want 10 ~et on the judge's calendar SOOI1-- he will be busyafter returning from
vacation.
..
,
......
~~ ,.,
_..
_."".~.w"".."_._., __ __ ,.",."",,,,,,,,,,,,,,..,,.,,,
, "" ..,...,
~":''''.~." ._ .."
"..'''''''''
...
NOTICE: This electronic mail transrnls sion Is torthe \ISO of the named Individual or entity ,0 which it is
cuected and may contain mforrnatlon that is privileged or confidential. It is not to be trqilsmilled to or
received by. anyone other than ttl'e.named addressee (or a person authorized to deliver It 10 the named
ad0ressce), "is norte be copied or forwarded 10 any unauthortzed persons. It you have recetved this
elecuonrc mail transmission in error, delete It'from your system without copying or forwardIng it, and notuy
I'la sender of tho error by replying via email or by calling Frost Brown Todd LLC at (513) 051-6800
(collt':ct), so that our audresu record can be corrected
<Al;rced Orderdelaying
1 AFFD
10
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 110 of 114 PAGEID #: 396
From:
Sont:
Mauer, Vincent E,
Friday; January 09, 2015 3:25 PM
'Angola Ford'
To:
cc:
Snyder, Sheryl
"
'
DRAFT of Agreed Order setting h,earin!Jin Feb,
Agreed Order delaying hearing On TRO - 4820-7858-230,5.1.docx
Subject:
Attucl~lilC,nts:
Ms. FO.!'d, ~ttacil~d ptease hnc;! Z,t.' DRAFT 'fot' YolW i'evlelol of' a limlteq AgJ~eedQrcler
ext,en'ding'the
i'estricUon's'
In the' mo and setting the ti'ear'irig in feb. 2915.' r have iio:t yet
dates
i'
This DRAFT has not yet been approved by the crlent $0 I may have minol' adjustments,
given the need to track' the TRO, 1 do not expect any significant
issues.
Please fevi(!i~ this und g ive my your' thoogtrts , Also, p l ee se send ASAP dates few tile
homing in r:ebruary as, we \~<lntto get on the jllqge "s c<llend,w soon he Nill be busy after
r'eturning fr-om vacat lcn .
'
AfFD
nut
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 111 of 114 PAGEID #: 397
Stanley M, Chesley,
Petitioner
v.
JAN 1 4 2015
Respon en s.
This matter first came before the Court on January 7, 20J 5 at on ex parte conference.
Thereafter,
RESTRAINING
ORDER
Respondent Angela M. Ford was given actual notice of the hearing on January 14: 2015,
see
Affidavit
of'Vincem
E.
011
Fact ond Conclusions of Law set forth in the Temporary Restraining Order continue to be the
Court's preliminary findings and conclusions and are incorporated herein by reference.
Until further Court order to the contrary or agreement or the Parties approved by the
Court:
I,
Respondent Ford, any co-counsel acting with her and any other Ohio lawyer
representing any of the Unknown Respondents are enjoined from (i) laking any action in the
I
Capitalized
terms in this Order dlOl are nor defined herein have the meaning set forth in ihe Verified Petition For
Dcclanuory
Memo"),
Case: 1:15-cv-00083-PCE Doc #: 13-1 Filed: 02/26/15 Page: 112 of 114 PAGEID #: 398
"
State of Ohio to enforce the Chesley judgment or (ii) serving any Chesley asset relatec discovery
on any Ohio resident, citizen or domiciliary, except that discovery may be served on Chesley in
any non-Ohio jurisdiction
2.
Respondent
representing any of the Unknown Respondents arc enjoined from making any tiling in any Ohio
court that would be or could be part of <ineffort to domesticate or register the Chesley Judgment
in Ohio;
3.
Unknown Respondents are enjoined from taking any action to collect the Chesley Judgment in
the State of Ohio from any Ohio resident, Ohio citizen or Ohio domiciled entity;
4,
Ford, the Unknown Respondents and any other person acting on behalf of Ford
and the Unknown Respondents are enjoined from issuing any subpoena seeking documents or
testimony to any Ohio resident, Ohio citizen or Ohio domiciled entity (other than Chesley) if the
purpose of the requested documents or testimony would be to obtain infomiation related to any
effort to en force the Chesley Judgment; and
5,
Ford, the Unknown Respondents and any other person acting on behalf of Ford Or
the Unknown Respondents are enjoined and prohibited from destroying, damaging or secreting
any documents or electronically stored information relevant to any of the issues described in this
Petition, the Motion or the Supporting
electronic information that reflects any (i) collection of funds collected and/or credited against
the Criminal Defendants Judgment, (ii) restitution obligations of the Criminals, (iii) forfeiture of
any assets in the Criminal Case, (iv) funds Ford or any affiliated entity transferred to or from
Johnston, (v) funds transferred to or for the benefit of any Criminal Case victims who are not
Case: 1:15-cv-00083-PCE
Abbott Case plaintiffs; (vi) amounts distributed to the Abbott Case plaintiffs; (vi) operation of
the Tandy LLC receivership; (vii) funds transferred to or subsequently by the United States
Marshall's Service related to the Criminal Case or the Abbott Case, and (viii) the legal fees and
expenses of Ford and her co-counsel in the Abbott Case.
This matter will come on for a hearing on the Motion's request for a preliminary
;t1Q,r c.- J... '-f
. It f"1
injunction on ~ll!.8'
_, 2015 at ~~
o'clock. At that hearing, the Court may consider,
any or all of the issues discussed in the Petition, the Temporary Restraining Order or this Order
including, but not limited to;
(a) All evidence, testimony, and exhibits to be offered by Petitioner and Respondents at
this preliminary stage of this matter relevant to any continuation of the prohibitions
set forth in the Temporary Restraining Order or this Order;
(b) Whether to convert the existing Temporary Restraining Order and this Order into a
Preliminary Injunction;
(c) At the next hearing, the Court expects specifically to address whether the Court
should grant the relief outlined on pages 7-9 of its Temporary Restraining Order,
including without limitation, whether the Unknown Respondents should he made
parties to this proceeding and whether or not the Court should order Respondent Ford
to identify by name and
Address
(d) Ordering Respondent to disclose the amount alleged to be owed to each of the
Unknown Respondents, and directing Respondent to provide a complete accounting
of all funds received by the Unknown Respondents In the Abbott Case, all funds
received by the Unknown Respondents from Respondent Ford, all fees and expenses
received by Respondent Ford or paid by Respondent Ford to third parties on account
Case: 1:15-cv-00083-PCE
of thv Abbott Case matter, and all accounting records Respondent Ford has prepared
for the Unknown Respondents all as may be needed to permit Chesley to confirm any
calculation of the current totul amount of the Chesley Judgment that the Court may
order be provided to Chesley.
Petitioner did not request and the Court does not currently intend to combine this hearing
with the hearing on the merits of the Motion as permitted by Ohio Civ, R. 65(C).
After considering
Petitioner's
Temporary Resrraini ng Order and this Order, the Court will address the status of the Unknown
Respondents as that issue is described in the Temporary Restraining Order.
Chesley is not required to post any security for this Order to be effective.
Chesley's counsel will transmit a courtesy copy of this Order to Respondent Ford both
electronically and by first class United Stales mail, postage prepaid.
Entered this 14<h day of January, 2015
Plaintiff,
vs.
ORDER
This matter is before the Court on Defendant Angela M. Ford's Motion to Declare
the Restraining Orders Dissolved or to Dissolve Them.
arguments of the parties, the Court finds the Motion to be well-taken. Accordingly,
IT IS ORDERED that Defendant's Motion to Declare the Restraining Orders
Dissolved or to Dissolve Them is hereby GRANTED.
hereby DISSOLVED.
Date:
_
Honarable Peter C. Economus,
United States District Judge
1
1
COURT OF COMMON
HAMILTON
COUNTY,
PLEAS
EXHIBIT
_zS
OHIO
STANLEY
M. CHESLEY,
)
)
PLAINTI FF,
)
)
vs.
ANGELA
M. FORD, ESQ.,
)
)
DEFENDANT.
10
TRANSCRIPT
OF PROCEEDINGS
11
12
APPEARANCES:
13
14
15
Vincent
Mauer, Esq.
On behalf of the Defendant.
16
17
BE IT REMEMBERED
18
Hearing
of this cause,
19
Honorable
20
21
had.
Robert
P. Ruehlman,
the following
a said judge of
proceedings
were
22
23
24
25
EDITED
FOR EXPEDITED
PURPOSES
ONLY
2
1
MORNING
THE COURT:
this
SESSION,
All
MR. SULLIVAN:
motion.
steimle
Ford.
procedural
same
Brian
from
Dinsmore
on
page.
They
on behalf
it worked
12
system,
13
complaint.
They
14
complaint
pursuant
15
order.
filed
18
MR. SULLIVAN:
19
THE COURT:
20
MR. SULLIVAN:
22
agreed
23
here
24
applicable.
-- I think
is our motion
THE COURT:
EDITED
to dismiss
the
an amended
to the Federal
Because
it
I was --
Equity
Equity
court's
originally
when
judge.
judge,
yeah.
complaint,
when
the Federal
a motion
in here as a
an amended
chesley
THE COURT:
21
all on the
stanley
of Angela
so we're
filed,
a complaint
it's my
and Christen
background
11
25
So we're
Honor,
filed
came
Your
Sullivan
10
17
right.
motion.
16
which
yeah.
So they
filed
we all
was still
Yeah.
FOR EXPEDITED
PURPOSES
ONLY
3
1
MR. SULLIVAN:
opposition,
couple
The
motion
a motion
we filed
of days.
second
THE COURT:
MR. SULLIVAN:
Court
grants
10
that's
11
12
a moot
But obviously
14
THE COURT:
16
if the
to dismiss
Right.
to dismiss
argument
then
issue.
MR. SULLIVAN:
full
the first
the TRO.
our motion
13
15
thing.
Hmm-hmm.
THE COURT:
the motion
in the last
I think
the second,
an
was first
which
to dissolve
filed
a reply
That's
thing,
moots
They
Let's
deal with
first?
Yes.
well,
for both.
MR. SULLIVAN:
They
are somewhat
17
intertwined,
18
our purposes
here
19
Ford.
20
her clients,
21
clients
22
this
is we represent
chesley's
for
Angela
represent
formal
now defendants
in
case.
23
THE COURT:
24
MR. SULLIVAN:
We represent
And that's
a significant
25
the
lawyer.
EDITED
Okay.
FOR EXPEDITED
the
point,
PURPOSES
ONLY
4
1
Your
Honor,
case,
nor,
there
such a case
to be filed
civil
lawyer.
8
9
because
I'll
Angela
creditor.
11
12
creditors,
13
domesticate
14
15
moment
16
not a lawyer,
17
Court
There
what
chesley.
against
if they
of arguments
ever wanted
that
to
here
in ohio,
is at issue
lawyer,
money
I mean,
she's
on behalf
24
THE COURT:
And that's
25
MR. SULLIVAN:
FOR EXPEDITED
just
Stan
of her clients.
Yes.
1S
to the
though,
from
well,
at the
who aga1n
on behalf
EDITED
with
the judgment
the judgment
MR. SULLIVAN:
yeah,
dealing
are plenty
to collect
as a
the chase,
21
for
we're
through
trying
is
capacity
Yeah,
20
no
a lawsuit
lawyer
THE COURT:
cutting
23
allows
their
is a Kentucky
19
cited
to the Court,
that
Ford
10
22
have
for carrying
And that's
18
submit
against
liability
here.
they
-- correct.
But I'll
PURPOSES
ONLY
5
1
THE COURT:
MR. SULLIVAN:
Supreme
a lawyer
liable
clients,
exceptions;
relationship.
That's
a lot of money.
and the ohio
Court decisions
is not liable
and cannot
become
there's
two
a privity
example
there
10
11
estate,
12
seller,
13
14
of the contract
15
seller.
16
17
liability.
between
The lawyer
in some instances,
can be exposed
18
19
Honor,
20
which
21
intentional,
22
exceeding
23
representation,
24
that that's
25
allegation
as
to
Your
the balance
conduct,
it's
certainly
and there's
it's
of the
no allegation
The
EDITED
FOR EXPEDITED
PURPOSES
a
ONLY
6
1
judgment
minute ago.
there.
to survive
that they
as they've
said, and I
1S
to dismiss,
you have
no.
1S
if you
their amended
10
complaint,
11
action.
12
she's violated,
13
breached,
14
15
declaratory
judgment,
16
are arguing
17
declaratory
judgment.
18
19
20
21
22
23
24
25
a tort that's
that
that she's
she's committed.
entitled,
that's the
PURPOSES
ONLY
7
1
domesticated
5
6
7
8
9
10
it's going to
in Kentucky
judgment can be
in ohio.
THE COURT:
Yeah.
really about.
MR. SULLIVAN:
statute provides,
THE COURT:
It
And ohio
1S.
it's 2329
Hmm-hmm.
MR. SULLIVAN:
-- which is the
11
uniform Enforcement
12
going to domesticate
13
14
15
16
17
judgment.
18
19
plaintiffs
20
21
defendant.
22
23
for 30 days.
24
25
that
of the
and you
to the
PURPOSES ONLY
8
1
lawyer,
lawyer is retained
creditors
whatever
improper,
anything
by the judgment
to go domesticate
pleading
an ohio
the judgment,
they didn't
of that nature.
So we're way,
10
11
12
collect
on this judgment
13
there's
a 30-day window.
immediately,
14
and try to
15
16
17
agree.
18
Kentucky
19
post-judgment
20
Kentucky,
21
you obtained
22
that's
23
creditors
goal here lS
you have to
collection
procedures
in
improper.
And that's where we are here today,
24
25
lS a big issue
FOR EXPEDITED
PURPOSES
ONLY
9
1
between
talking
about a judgment
interest
about collectibility,
assets,
So I would
Angela
dismissed,
probably
you're
now with
exceeds
$75 million.
submit that
should be
10
case against
their formal
11
their prerogative.
12
dissolution
clients
that's
13
THE COURT:
All right.
14
MR. MAUER:
15
16
17
don't disagree
18
19
against
20
any.
21
petition
22
against
23
with.
just said I
He said that we
There's
no damages
against
request
in our
her clients.
because
24
25
the questions
EDITED
that we believe
FOR EXPEDITED
to
ohio law
PURPOSES
ONLY
10
1
total.
how much is
6
7
think correctly,
interest
just said, I
10
neither
11
12
13
the collective
14
she's
15
advocate
16
17
Mr. chesley's
18
19
20
today,
21
22
23
24
sullivan
25
work around
represented
she's done
Kentucky.
in the Federal
case in Kentucky,
case against
co-judgment
debtors.
she
owes
If Ms.
EDITED
FOR EXPEDITED
I don't
PURPOSES ONLY
11
1
she's a defendant.
e-mails
threatening
people,
Judge Dlott.
Angela
1S
to Stan chesley
and Hackett,
financial
10
for personal
11
12
entities.
13
the Federal
14
court in Kentucky,
15
public
16
she wanted
17
protective
18
Kentucky.
It's Angela
19
those things.
20
subpoenas
21
Bank, asking
22
Financial
23
issued
24
companies,
25
information
It is Angela
Ford
asking
information
on at
third-party
Ford who has told
generally.
the
in
It's Angela
Ford issuing
Bank.
subpoenas
about First
It's Angela
to seven insurance
for
EDITED
FOR EXPEDITED
but,
PURPOSES
ONLY
12
1
agaln,
other
THE COURT:
2
3
about
ohioans.
why insurance
companies?
MR. MAUER:
with
third
members
stop there
Because
some of those
parties,
says,
12
have ever
had with
13
companies,
seven
14
some other
entities
15
are entities
16
parties.
17
entitled
18
activities.
I want
every
Third,
First
23
she didn't
24
Stan,
she asked
25
these
other
she
you've
lnsurance
that
-- and then
from
-- wanting
banks?
banks,
U.s.
Fifth
Bank,
information
for information
entities
are
from Angela's
And banks
Yeah,
These
are not
that they
Financial,
EDITED
over
not stated.
on assets
22
of them with
to be protected
MR. MAUER:
family
policies.
your
We believe
information
had
communication
in ohio,
THE COURT:
policies
that
perhaps
as beneficiaries,
11
21
entities
like
Mr. chesley's
19
she believes
had insurance
10
20
nonparty
and
about
about
as well.
FOR EXPEDITED
PURPOSES
ONLY
13
THE COURT:
might
have
With
investments,
MR. MAUER:
any of those
you mean?
yeah.
she's
done
that,
knows
what
Stan
5,000
pages
Judge,
Mr. sullivan
is right,
there's
in Kentucky,
and we're
complying
Kentucky
has.
is attacking
11
other
ohio
12
Stan,
not owned
13
and we believe
14
it's Angela
15
and that's
16
someone
entities,
who's
why
she's
THE COURT:
18
MR. SULLIVAN:
right
issues
21
has done,
22
across
23
the lawyer,
24
motion
25
Court
the
river
where
And
things
here and
relief
about
from.
that,
Honor,
yeah?
it sort
If she
in Kentucky,
which
she
is not to come
and seek
relief
by sUlng
is to file a
the Court
the subpoena
EDITED
by Stan,
a party
the remedy
from which
not
all these
get
the
doing
improper.
Your
the remedy
with
all these
that's
what
over
activity
she's
a subpoena
given
nonparties,
doing
17
20
What
or controlled
that
she
in Kentucky.
collaboratively
who we could
of fits
We have
order.
10
19
is because
of discovery
court
he
-- ln the
is issued.
FOR EXPEDITED
PURPOSES
And
ONLY
14
1
of all of those
remedies
serve objections
under Kentucky
to that.
burdened
it's in Kentucky.
law, they
IV of the
10
constitution
11
you to essentially
12
court, Angela
13
clients
14
discovery,
15
16
17
Kentucky
18
the participants
19
20
argument
here's where
21
unfortunate
22
Kentucky
23
24
Kentucky
25
in October
Court.
EDITED
FOR EXPEDITED
PURPOSES
ONLY
15
1
briefed
think you're
1s
in front of Kentucky
Kentucky's
your motion
court
is denied,
court that
under Rule 60
10
in Kentucky
11
judgment
12
13
14
15
the Kentucky
16
17
across
18
Kentucky
19
20
21
the judgment
or modify it because,
agaln,
If
the
s ln Kentucky.
22
23
we sued Angela
24
things.
25
because
EDITED
FOR EXPEDITED
she's
PURPOSES
ONLY
16
1
fully briefed,
They've
asked an
10
judgment,
11
12
Kentucky
13
14
15
action against
16
17
18
a Kentucky
lawyer, and
her.
19
creditors
and his
20
former clients
21
22
23
judgment,
24
for a different
25
EDITED
day.
1S
issue
FOR EXPEDITED
PURPOSES
ONLY
17
1
lawyer
efforts
in Kentucky
Kentucky
judgment.
THE COURT:
Kentucky,
in carrying
well,
it's
over
motion
it's
here.
things
MR. SULLIVAN:
to restrain
out a
not
here,
right?
They
can file
improper
because
it's
an ohio
10
and your
serVlce
on a Kentucky
11
invalid,
or some
other
12
if she's
going
15
jurisdiction
16
17
banks
18
is
reason.
I mean,
in ohio
so she availed
herself
over
well,
from
into
ohio.
actually,
did not,
Your
20
entities
in Kentucky,
as you might
21
imagine,
Fifth
U.S.
22
Bank,
23
that
24
can say --
25
have
all these
Kentucky
THE COURT:
EDITED
she served
Third,
she
all the
Bank,
other
well
Kentucky
entities
operations,
FOR EXPEDITED
and
the
19
there's
Honor,
to ohio,
to ohio
records
she came
MR. SULLIVAN:
--
of ohio's
by coming
and stuff,
resident
to do anything
14
looking
over
the subpoena's
THE COURT:
She's
to say that
13
her
so they
is in
PURPOSES
ONLY
18
1
n ohio.
well, ultimately
MR. SULLIVAN:
discovery
THE COURT:
it
resisting
Do
10
MR. SULLIVAN:
11
MR. MAUER:
Judge.
okay.
Just a couple points,
12
briefly,
Mr. Sullivan
13
some post-judgment
14
motions
15
ruled on them.
16
17
because
18
1S
19
course,
in Kentucky
is correct
of
law.
20
THE COURT:
Judge who?
21
MR. MAUER:
Judge schrand.
22
THE COURT:
Yeah.
23
has
24
MR. MAUER:
S-C-H-R-A-N-D.
25
THE COURT:
Thanks.
EDITED
FOR EXPEDITED
I know.
PURPOSES
I
ONLY
19
1
know.
MR. MAUER:
doesn't
law,
mentioned
all,
courtesy
matter.
purport
And Judge
to have
so that,
10
say,
Judge,
11
tell
nonparty
12
personal
13
to seeking
14
in Kentucky,
15
that
16
the Kentucky
17
amenable
about
that's
The other
ruled
just
ohio
law at
a red herring
Ford's
thing
side of this
I would
like to
is it is not reasonable
ohio
financial
residents
and that's
have
what
to jurisdiction
They
19
why Angela
20
the entities
themselves
21
our pleadings
identify
22
them,
23
Kentucky
24
be here.
25
has clients
and they
more
filed
don't
than
well,
in ohio.
EDITED
then
today,
of
I become
that's
subpoenas
against
in Kentucky,
at least
want
Angela
Angela
she wants,
1n Kentucky.
Ford
themselves
because
18
is subject
by Angela
to go avail
Court,
to
whose
information
and disclosure
they
on ohio
talk
of Angela
schrand
ten of
to be 1n
Ford wants
Ford 1S here.
she's
FOR EXPEDITED
and
to
she
1n
PURPOSES
ONLY
20
1
communication
with
those
clients.
has contracts
with
those
clients.
3
4
THE COURT:
She's
MR. MAUER:
And she's
the river,
about
financial
wants
she's
ohioans
data
about
permission
11
that.
Thank
12
seeking
that's
10
come across
information
-- personal
ohioans
private
that
she
this
will
court
prevent
you.
I'll
last word.
MR. SULLIVAN:
15
Your
16
carrying
Honor.
17
All right.
You know,
maybe
Thanks,
we're
out the
THE COURT:
18
himself
19
Kentucky.
Because
he had to avail
-- he had to avail
20
MR. SULLIVAN:
21
THE COURT:
23
the
to publish
THE COURT:
14
22
come across
river.
13
She
has a right
24
Mr. Chesley
25
jurisdiction
She's
come to ohio.
he
himself.
Correct.
has already
EDITED
to
Right.
to defend
MR. SULLIVAN:
himself
of Kentucky
But
submitted
court,
FOR EXPEDITED
to the
that's
PURPOSES
ONLY
21
1
not an issue.
believes
you interpret
interpretation
10
if a third party
Kentucky
--
that
have jurisdiction
in Kentucky
over
to
subpoena's
invalid.
12
13
14
Ruehlman's
15
retrain,
16
participant,
17
That's
18
is invalid
-- you say by
That's
11
Again,
ruling,
but the
with here.
19
going to highlight
20
motions
21
Kentucky.
22
Kentucky
23
24
to determine
25
essentially
because
We don't know
their identities,
for judgment
EDITED
in
that's
to be effective.
FOR EXPEDITED
PURPOSES
ONLY
22
1
motion that
says:
is void
because
creditors
plaintiff,
reliably
be determined
record.
Kentucky
10
Kentucky
awarded to each
cannot
11
12
creditor
13
retains
14
cannot domesticate
15
16
clerk's
17
judgment.
18
judgment
19
the judgment.
20
21
Kentucky
22
don't,
23
24
attention.
25
office
the judgment,
she's
to go down to the
and domesticate
the
will
in
PURPOSES
ONLY
23
1
Kentucky,
argue
they
every
week
order
and documents
they
of stuff
the Kentucky
argument
the proper
over
12
case.
13
for me.
14
goes
15
had a case
16
made
17
availed
18
this
19
and I think
20
himself,
21
motion
25
court.
THE COURT:
briefed,
It's
lawyers,
well,
it's
interesting
impression
1S if jurisdiction
the borders.
like this.
herself
of
our
right.
a case of first
point
sort
to MS. Ford.
All
good
a good
stuff
So that's
The issue
across
whether
is the province
as it relates
well
24
frankly
which
protective
produced,
fully
to
do it almost
in Kentucky,
are produced
11
23
now, they
over
which
and forum
is in Kentucky,
are doing
10
22
that
remedy
It's
-- never
But I think
though,
I mean
1n ohio.
over 1n ohio,
She's
she
doing
or trying
he has a right
so I'm going
you
to,
to protect
to overrule
the
to dismiss.
So what
about
the
MR. SULLIVAN:
dissolve
the TRO,
EDITED
the motion
to take
restraining
We will
Your
order?
also move
to
Honor.
FOR EXPEDITED
PURPOSES
ONLY
24
procedurally,
back in January,
you entered
a TRO against
you extended
it another
period
14 days or some
of time.
THE COURT:
well,
it was an
emergency
emergency
thing, that's
10
Ford
MS.
not uncommon
to
do.
MR. SULLIVAN:
11
Is not.
But we sit
12
13
the January
14
7th order.
THE COURT:
15
because
16
continuances.
17
guess,
18
right?
19
there's
for a permanent
MR. SULLIVAN:
injunction
really,
20
21
temporary
22
dissolved,
23
24
forever,
25
And we're
restraining
because
without
the
order has
having
a hearing
on it.
EDITED
FOR EXPEDITED
PURPOSES
ONLY
25
the extension,
so I think
THE COURT:
Yeah,
kind of an agreement
we are going
a motion
thought.
to put this
but we never
10
that they
11
TRO.
12
your
13
we briefed
14
Federal
15
declined
16
issues
17
preliminary
18
cannot
19
be dissolved.
20
another
21
evidence
22
don't
23
agreed
Court
we said
again
in front
is it's,
injunction.
1S
get to continue
SO I think
Court
One of the
the TRO
long.
If they want
1S
It should
back,
stuff,
EDITED
put on
but you
ad nauseam.
it's clear
by Rule 65 it
the Court
not a
to have
can come
of the
By rule a TRO
that
injunction,
extent
this
Your Honor,
be extended
25
ago,
January
to extend
to rule on it.
has expired
was an
since
there,
24
is what
of weeks
that
can continue
that
There
as of a couple
was
everybody
right,
MR. SULLIVAN:
agreement
but there
among
to dismiss,
by its term
doesn't
want
FOR EXPEDITED
To the
to
PURPOSES
ONLY
26
dissolve,
that
comply
violation
said nobody
judgment,
know,
anybody
that's
I submit
if she were
with
ohio
to -- or her clients
law there
and that's
I don't
from
be a
Because
you
the
the problem,
you
how far,
11
that's
12
have a problem
13
should
14
the overbreadth
with
you know,
they
submitted
15
to
would
the entry
two-fold;
be dissolved
the law.
But
unfortunately
to the court
So I think
time
they
period
on its face,
and then
is clear.
THE COURT:
want
it is so broad
of your order.
10
16
that
okay.
All
Yeah,
just
right.
You
to respond?
17
MR. MAUER:
18
Judge.
Mr. Sullivan
19
some
20
matter.
21
here
22
was entered.
23
January
14th of which
24
notice,
there's
25
by affidavit
briefly,
recited
correctly
in your
EDITED
was an ex parte
room,
after
which
in this
hearing
the TRO
on
evidence,
in the record
FOR EXPEDITED
real evidence
of her actual
PURPOSES
ONLY
27
1
notice.
THE COURT:
March
hearing.
We continued
MR. MAUER:
not to attend
time
Yeah.
entered
Hmm-hmm.
MR. MAUER:
-- that
11
it was,
12
but the
you're
13
THE COURT:
14
MR. MAUER:
15
date,
that
16
chose
to take
17
they
18
19
didn't
removed
order
restrained
--
some
activities.
And
14th
March
4th.
to the March
go on this
4th
because
THE COURT:
have
worst
right,
at which
a second
THE COURT:
injunction
14th,
10
until
on January
the Court
that
they
court,
court.
So we couldn't
the hearing.
20
MR. MAUER:
21
economist
decided
22
23
heard,
24
now.
25
have
and then
Judge
one of which
the one that
economist
jurisdiction
EDITED
not to rule on
you just
is heard
decided
he didn't
it came back
FOR EXPEDITED
here.
PURPOSES
I
ONLY
28
for a hearing
court's
on a permanent
convenience
THE COURT:
injunction
prepared
at the
dissolve
essentially
it, that's
exactly
right, yeah,
caused it to be continued,
10
and we couldn't
11
Federal
12
13
hearing.
14
15
that,
rule on it because
So let's set it
injunction
MR. SULLIVAN:
Your Honor,
I'll set
before
16
17
its security,
18
19
20
approximately
a $75 million
21
outstanding.
22
circumstances
with a judgment
23
magnitude,
24
security
25
you required
no security
of the injunction.
a few moments,
your requiring
As
there's
judgment
of that
zero dollars
ln
EDITED
FOR EXPEDITED
PURPOSES
ONLY
29
substantial
they
pretty
they're
recourse
around
the company
That's
all we ask.
brought
this
good about
wrong,
about
of security,
action,
their
rather
trying
they must
feel
And if
country
well,
them
finances.
you want
to talk
MR. MAUER:
I would
THE COURT:
I don't
require
that
security?
say
12
13
security
14
never
15
of security,
on these.
always
I've always
been an advocate
17
any is necessary,
Mr. chesley
18
hiding
today,
19
like
20
21
impressed
22
a -- set a prompt
23
just
24
We don't
his assets
some affidavit
to them
anybody?
EDITED
believe
that
that
isn't
to that effect,
I can
But I've
the Court
hearing
from where
THE COURT:
affect
a lot
but go on.
MR. MAUER:
proceed
-- I have
to require
16
25
Slnce
success.
at least
THE COURT:
10
11
amount
will
do
and we should
we are.
FOR EXPEDITED
really
out I don't
PURPOSES
ONLY
30
1
said before,
Actually,
I don't
As you
it yet.
MR. SULLIVAN:
10
11
trying a domesticated
12
different
13
14
sometime
15
16
is valid,
17
18
and so they've
19
enforcement
20
things.
judgment
are two
in the future,
she's entitled
so if they say,
judgment
to collect, we
of a proceeding.
Now this
1S
significant
because in
21
Kentucky
22
judgment,
23
effectively
24
pending
25
but they've
come to ohio to
appeal.
PURPOSES ONLY
31
1
THE COURT:
Kentucky
what,
If they
how much?
You would have to
judgment.
THE COURT:
judgment,
10
yeah.
million
well, it was 42
at the time.
THE COURT:
11
75 million?
MR. SULLIVAN:
12
cruel.
13
14
15
to come in?
16
you think?
17
in
MR. SULLIVAN:
had a stay
All right.
MR. MAUER:
well,
Judge I, can't
18
does or
19
doesn't
20
21
we would
22
23
affidavits
24
documents
25
present
majority
is already
and in various
from Kentucky,
I can
of what
in the record
certified
so I don't know
PURPOSES
ONLY
32
1
presentation,
s 1 r.
THE COURT:
you need
during
okay.
How much
time
this?
How much
time
to argue
MR. SULLIVAN:
We 11 , I would
submit,
have
right
to cross-examine
we're
not going
Your
Honor,
an evidentiary
10
affidavit
11
opportunity
12
would
submit
13
time,
glven
14
opportunity
15
June
16
the week
17
if we're
q o r nq to
hearing,
we have
Mr. chesley,
to rely just
because
we don't
that's
giving
going
of June
THE COURT:
June
24th
would
19
June
24th
open.
some
had an
him.
of June
22nd
so I
to require
we haven't
the week
so
on the
him,
to cross-examine
8th,
the
have any
to cross-examine
18
8th
1S
After
fine,
is fine.
I got a murder
be open.
20
MR. SULLIVAN:
21
THE COURT:
That
MR. MAUER:
The only
22
do
case
--
I have
okay.
That's
would
fine.
be a good
day.
23
24
know
25
availabiity,
for sure,
EDITED
Judge,
thing
I don't
is Mr. chesley's
ONLY
33
1
within,
by noon tomorrow.
THE COURT:
okay.
MR. MAUER:
If Mr. sullivan
like
that.
him present,
MR. SULLIVAN:
are we talking
8
9
10
we will
about,
THE COURT:
at nlne.
day.
Yeah,
Let's
11
24th,
what
time
let's
we will
just do it
do it early
that
get it done.
12
this
effect
13
have
the wlnnlng
14
You want
to give
me entries
to
I usually
do the entries.
to do the entries?
MR. MAUER:
16
entry,
17
Mr. Sullivan
18
I get that
19
that
Judge,
We will
to you,
21
THE COURT:
23
hearing
24
24th.
try to confirm
continue
on preliminary
So put it down,
MR. MAUER:
that day.
okay.
on preliminary
EDITED
And before
is available
MR. SULLIVAN:
injunction.
I will
an
it to
Mr. chesley
22
prepare
and circulate
20
25
accommodate
nine or 9:30?
Yeah,
Do you want
15
June
would
Andy,
injunction
for a
on the
Judge?
FOR EXPEDITED
PURPOSES
ONLY
34
1
THE COURT:
yeah.
MR. MAUER:
There's
that we filed
an order
February
opposed
but I don't
that's
5th, which
and it's
in Federal
suspect
really
side,
11
13
MR. MAUER:
like
It's
application
15
motion
16
order
and it addresses
17
Judge
thinks
19
Hold
20
go on.
21
on just
a second.
MR. MAUER:
22
to do, Judge,
23
tell
24
respond,
25
I would
me that
is either
they would
even though
like
EDITED
of restraining
just
what
I'm sorry,
I would
like
they
to present
or not the
a second.
okay.
well,
seeking
a verified
whether
Hold
or
it?
the order
application
THE COURT:
to let it
to ask her
1S
we filed
seeking
that
to respond,
What
14
of
or here,
intent
I was going
if they would
on
not been
court
Ms. Ford's
12
matter
in all honesty
10
18
in this
removed,
either
a chance
haven't
an order
FOR EXPEDITED
to
yet,
or
if they
PURPOSES
ONLY
35
1
MR. SULLIVAN:
2
3
going
position,
5
6
to oppose
to oppose
it.
it, given
the respective
but --
THE COURT:
Do you want
to do it on
If can we do it on the
fine.
10
MR. SULLIVAN:
11
THE COURT:
12
right, guys.
Yeah,
That
that's
sounds
be
fine.
good.
All
Thanks.
13
MR. MAUER:
14
MR. SULLIVAN:
15
(proceedings
Take
care.
Thank
you.
concluded.)
16
17
18
19
20
21
22
23
24
25
EDITED
FOR EXPEDITED
PURPOSES
ONLY
36
CERTIFICATE
I, BARBARA
undersigned,
Hamilton
thereafter
a true, complete,
10
11
12
13
14
15
16
an official
Court Reporter
for the
transcribed
said stenotype
and
Transcript
of proceedings
1S
of my
notes.
IN WITNESS WHEREOF,
I hereunto set my
~uu~~J~_
BARBARA LAMBERS, RMR
Official Court Reporter
Court of Common pleas
Hamilton County, ohio
17
18
19
20
21
22
23
24
25
EDITED FOR EXPEDITED
PURPOSES ONLY
EXHIBIT
;;.
ENTERED
COURT OF COMMON PLEAS
HAMILTON COUNTY, OHIO
JUl 072015
STANLEY M, CHESLEY
Case
Nt,
A1500067
Judge Ruehlman
Plaintiff,
I
I
v.
ORDER
I
Defendants.
This matter is before the Court on Defendant Angela M. Ford, Esq.'s Motion to
Dismiss the Amended
Complaint,
Temporary Restraining Orders, and oral motion !made during the hearing on May 14,
I
2015
Having consrdered'the
I ~ ~ ~ I m IJill
~~
II ~I II ~
D111180253
Date:
of the
I
Honorable Robert Ruehlman
H&e1\rn~a~
~~van,
Esq. 0040219)
Christen M. Steimle, Esq. (0086592)
DINSMORE & SHOHL, LLP
255 E. Fifth Street, Suite 1900
Cincinnati, Ohio 45202
Phone: (513) 977-8200
Fax: (513) 977-8141
~'711~
Email: brian.sullivancsdlnsmore.com
christen.steimlecpdinsmore.com
Email: vrnauerCwtbtlaw.colT!
At-tOl~ey
Chesley
Iov
Plaintiff
Stanley
M.
~
E'
.ll
EXHIBIT
L
I'
WJNDwUP AGREEMENT
This WIND-UP AGREEMENT
.,'
l'Effective Date") by and between STANLEY M. CHESLEY (the "Transferor"), and THOMAS
F. REBME (the "Transferee"),
the "Parties." .
WHEREAS, the law firm of Waite, Schneider, Bayless & Chesley CQ., L.P.A. (the
"Corporation") is all Ohio legal professional association formed and maintained under Chapter
1785 of the Ollie Revised Code.
WHEREAS, Transferor is the sole shareholder of the Corporation and serves as its
President,
WHEREAS, Transferee is the secretary of ti,e Corporation and an attorney in good
standing and licensed to practice law in the State.of Ohio.
\VHEREAS} effective April 16,2013, Transferor is retiring from the practice of law, and
tendering to the Ohio Supreme Court the notice necessary to effectuate such retirement.
WHER}'1AS, under Section 1785.05, a professional association may issue its capital stock
only to persons who are duly licensed, certificated, or otherwise legally authorized to render
within the state of Ohio the same professional services as that for which the association was
organized.
----~"---~R;~~~:n~e~-Scctj~-J785.07
;h~-;io
~f'
Revise{j
professional essooiation may sell or trnnsfet thai shareholder' 8 shares in the essocietlon only to
another individual who is duly licensed, certificated, or otherwise legally authorized to render
withln the State of Ohio the same professional services lIS that for which the association WfL'l
organized.
WHEREAS, under Opinion 2002~12 of the Board of Commlssioners OIl Grievances and
Discipline of tho Supreme Court of Ohio, an attorney may not practice in a legal professional
association in which II non-attorney has an interest.
WHEREAS, Transferor desires to transfer, on the terms and conditions set forth. below,
his sharesill the Corporation to the Transferee to be held in trust so that tho Corporationmay
avoid a premature or involuntary dissolution and Transferee may conduct an.orderly wind-up of
the Corporation for the benefit of its employees, creditors, and Transferor.
NOW, THEREFORE, in mutual consideration of tho promises and performance of the
other, and for other good and valuable conslderatlon, receipt and sufficiency of which are hereby
acknowledged, Transferor and Transferee hereby agree as follows:
:'
1.
Section
Transferor hereby transfers and assigns his 225 shares in the Corporation (the
"Shares") to Transferee to be held in trust for the exclusive purposes of winding up the
Corporation for the benefit of its employees, creditors, lind Transferor.
Section 2,
Transferor hereby resigns from uti position with the Corporation, including that
of Prest dent and
rID employee.
Section 3.
WilHU.mrJJl?..0f
OperllLions.
4.1.
Wind-llv..l.
As contemplated under Section 1701.8a of the Ohio
Revised Code, Transferee agrees and shall proceed with winding up the Corporation's affairs, It
is the Intention of the Parties that the winding up of tile Corporation's operations be conducted in
a way as to maximize protection of the Corporation's clients' interest, including protecting
the confidentiality of all privileged communications and otherwise maintain as appropriate under
the Ohio Rules of Professional Conduct all client files. As part of the wrindiug up of the
--------eorporutiun;'l'ransfcrecshllll-procccd-to;-
--,...__. -'- .. "
_ __
- -- -
such
(u)
(b)
(c)
agreements;
Corporation;
counsel;
(d)
identify and account for all assets reasonably to be owned, used, or in the
.possesslon of the Company, of every kind whatsoever and wheresoever located, Including but
not limited to furniture, books, papers, computers, data processing records, evidence of debt,
bunk accounts, savings accounts, brokerage accounts, certificates of deposit, and stocks, bonds.
debentures and other securities;
(e)
terminateemployees;
(f)
terminate all employee benefit programs and provide for their proper
disposition;
(g)
to creditors
as required
and the remainder to Transferor; provided, however, Transferor may not receive or participate in
any legal fees relating to his own efforts or these of other attorneys except for services performed
prior to the Effective Date and may not participate under any circumstances in any legal fees
earned from the efforts of any attorney undertaken after the Effective Date; and
I
I
(11)
cause Corporation to maintain professional liability insurance. coverage or
report endorsement coverage insurance for a period (if' time not less than the applicable statute of
limitations for any legal services provided by Corporation or any of it,~current, former or retired
individual attorneys.
4.2. 1!se of NlIl1lC. Pending the dissolution of the Corporation, Transferor
authorizes Transferee. to continue to use the name of Transferor pursuant to Rule 1.17 of the
Ohio Rules of Professional Conduct However, any specific reference to Transferor shall
~nmificatiou
By The COl'uol"lltion.
such action.
Section 6.
Successors .l.I.!!:d A,2.signs. Transferor may not assign this Agreement.
Except as otherwise expressly provided in this Agreement, the terms and provisions of this
Agreement shall bind the heirs and executors of Transferor; provided, however. Transferor
reserves the right to amend this Agreement, including substituting a new trustee, provided the
aharea in the Corporation, if not dissolved, are held by 811 attorney in good standing licensed to
practice ill the State of Ohio.
Section 7.
~ontroIJ.ing Lmx. The various prevlslons of this Agreement shall be
construed under, and the respective rights and obligations of the Parties shall be determined with
reference to, the laws of'the State of Ohio.
Section g.
.Captions. Thecaptions of the several Sections of this Agreement are for
reference purposes only, und do not constitute II part hereof. Such captions shall be ignored in
construing this Agreement,
Seetien 9.
each of which shall be deemed to be n duplicate original, and all of which together shall
constitute one find the same Instrument; which shall be binding upon all the Parties hereto,
notwithstanding the fuct that all Partiee did not sigl).the same counterpart. This provision shall
also apply to any and all amendments or modifications to this Agreement.
Scetlon 10. r:oInJ)Jinncc With, AnnHcnble hAlt. It is expressly understood that the
terms and conditions of this Agreement are subject to all applicable statutory provisions, ethical
rules, case law, and advisory opinions relating to the subject matter of this Agreement (the
"Applicable Law"), In the event
M issue
of this Agreement, the Parties shall meet and amend this Agreement as necessary to ensure full
compliance with the Applicable Law,
~L~(/~~~~.
~
----.:;..
__
,. Chesley
v--.-
----
Thomas R. Rehme
---
_, .. - - "- __
"'
Its:
",h,
__
'"
1;;
zd
j
~
'"
EXHIBIT
PLAINTIFFS
v.
STANLEY M. CHESLEY, et al.,
llEFENDANTS
NOTICE
OF HEARING
Respectfully
submitted,
(859) 268-2923
Email: amford@windgream.net
William T. Ramsey
NEAL & HARWELL, PLC
TBA No. 9248
150 Fourth Avenue North
Suite 2000
Nashville, TN 37219
(615) 244m1713
Email: hram~~.Y(~i),nealharwelLcom
COUNSEL "'OR I'LAINTIFli'S
CERTIFICATE
OF SERVICE
The undersigned hereby certifies that a true and correct copy of the foregoing was served
~1._day of May, 2015, to the following:
::I
PLAINTIFI?S
l>EFENI>ANTS
previously
Gallion,
See Order (Aug. 1, 2014). This Court then ruled on multiple post-
judgment motions which resulted in this Court making the Judgment final pursuant to CR 54.02
and awarding prejudgment and post-judgment interest against Defendant Chesley.
See Order
(Sept. 19, 2014); Amended Order (Sept. 19, 2014); Order (Oct. 22, 2014); Second Amended
Judgment (Oct. 22, 2014). Defendant Chesley did not post a supersedeas bond to secure a stay
of enforcement of the Judgment and Plaintiffs are free to execute on his assets.
During post-judgment
_
(HWSBC").
for his former law firm, Waite, Schneider, Bayless & Chesley Co" L.P.A.
copy attached hereto as Exhibit A, filed under seal). The
Supreme Court of Kentucky permanently disbarred Defendant Chesley on March 21, 2013 for
his conduct
584 (Ky. 2013). Shortly thereafter, Defendant Chesley retired from the practice of law in Ohio
to avoid also being disbarred in Ohio. Prior to his disbarment and retirement, Defendant Chesley
was the sole shareholder of WSBC. See Ex. A at 1; S. Chesley Dep. Vol. I at 15: 1-10 (part of
this Court's record). Since Defendant Chesley was no longer going to have a valid license to
practice law, he obviously could not continue to own a law firm. See Ex. A at 1. Consequently,
Both prior to and after Defendant Chesley's Kentucky disbarment and his retirement of
_Se~
seal).
_IQ.c
Even though Defendant Chesley can no longer own a law firm,
ARGUMENT
This Court "has the authority 'to enforce its own judgments and to remove any
obstructions to such judgment.'"
(Ky. Ct. App. 1991) (quoting ,t\kers y. Stephenson, 469 S.W.2d 704, 706 (Ky. 1970.
This
Court may also compel the surrender of property in the execution of a judgment pursuant to KRS
426.384, which provides as follows:
The court shall enforce the surrender of the money or securities therefor, or of any
other property of the defendant in the execution, which may be discovered in the
action; and the court may use its contempt power in enforcing surrender of the
property.
KRS 426.384.
Defendant Chesley is unquestionably before this Court and is the
This Court has the authority to enforce its Judgment against him and to
compel surrender of Defendant Chesley's property.
CONCLUSION
For the foregoing reasons, Plaintiffs respectfully request that this Court order that
Respectfully submitted,
Email: .illllf9r4.@.)Yillg~trf\~n.nf.~
William T. Ramsey
CERTIFICATE
OF SERVICE
The undersigned hereby certifies that a true and correct copy of the foregoing was served
via electronic and U.S. Mail this the ~1_day of May, 2015, to the following:
Frank Benton, IV, Esq.
Midway, KY 40347
Mitzy L. Evans
Evans Law Office
177 South Main Street
P.O. Box 608
Versailles, KY 40383
Luther C. Conner, Jr., Esq.
103 Cross Street
Albany, KY 42602
Sheryl G. Snyder, Esq.
..ExhibitA
......
--.,,-------''--- --------,,,-Exhibit B
EXHIBIT
'"
:;;
zd
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.!l
E
iii
ENTERED
BOONE CIRCUIT,'DISTRICT COURT
COMMONWEALTH
OF KENTUCKY
BOONE CIRCUIT COURT
DIVISION III
CASE NO. 05-CI-00436
JUN 23 2DIS
BY' DIAmlE r,q:J~y'~I(
,
. ..rl'
. '
V D,C
I
PLAINTIFFS
v.
DEFENDANTS
This matter comes before the Court on the Plaintiff's Motion to Transfer Beneficial
Interest in Property Held in Trust. The Court having read the memorandums filed by the parties,
reviewed the tile, and being in all ways sufficiently advised, hereby finds as follows:
This Court entered judgment against Defendant Chesley on August I, 2014, finding him
jointly and severally liable as a matter of law for the $42 million in damages previously awarded
to Plaintiffs against Defendant's Gallion, Cunningham, and Mills. Said Judgment was made final
pursuant to CR 54.02 and Defendant Chesley did not post a supersedeas bond to secure a stay of
enforcement pending appeal.
As part of post-judgment discovery, Defendant Chesley disclosed the Wind-Up
Agreement for his former law firm, Waite, Schneider, Bayless & Chesley, Co., L.P.A.
("WSBC"). The Wind-Up Agreement provides that Defendant Chesley would transfer his shares
in WSBC to Thomas F. Rehme to hold in trust for the exclusive purposes of winding up WSBC
for the benefit of its employees, creditors, and Chesley. Per the Agreement, Mr. Rehme is
authorized to liquidate corporate assets and distribute proceeds to creditors as required and the
payout the remainder to Defendant Chesley as long as Defendant Chesley does not receive any
legal fees other than for services performed prior to the effective date of his retirement.
Both prio~'to and after Defendant Chesley was disbarred in Kentucky and his retirement
of his Ohio bar license. he transferred more than $59 million dollars from his personal accounts
to WSBC. $1.322,000 of that amount was transferred on or after the date of the Wind-Up
Agreement.
Defendant Chesley still owns a beneficial interest in WSBC. PlaintitTs argue that this
interest is subject to execution for the purpose of satisfying Plaintiffs
Defendant Chesley. To this end. PlaintitTrequests
Judgment against
that would be
There is no dispute that this Court has personal jurisdiction over Defendant Chesley. He is
a party to the case at hand and a valid judgment has been entered against him, ajudgment which
the Plaintiffs are within their rights to seek the Court's assistance to collect.
The law is clear that when the Judgment state has personal jurisdiction over the judgment
debtor, that state may exercise that jurisdiction to take action on that judgment. See Estates of'
Ungar ex reI. Strachman v. Palestinian Authority. 715 F.Supp.2d 253, 262-64 (D.R.1. 20 I0). The
Restatement (Second) Conflict of Laws 55 (1971) states that, " a state has power to exercise
judicial jurisdiction to order a person, who is subject to its judicial jurisdiction, to do. or not do.
an act in the state. although the carrying out of the decree may affect a thing in another state."
Furthermore. K.R.S. 426.384 gives the Court the authority to enforce the surrender of money.
2
securities, or any other property of the defendant in the execution and enforcement of a
judgment.
1~ay
of June, 2015.
JA
R. SCHRAND, JUDGE
BOONE CIRCUIT COURT
COPIES TO: ALL ATTORNEYS OF RECORD
2015~08-25 13:07
P 2/6
EXHIBIT
'"
~
iii
(!tllttrt of j\ppeals
NO. 20 15~CA-OO1066
STANLEY M. CHESLEY
v,
MOVANT
BOONECIRCUIT COURT
ACTION NO. 05-CI-00436
RESPONDENTS
ORDER
DENYING INTERMEDIATE RELIEF
** ** *. ** ** ** ** **
Stanley Chesley has moved this Court, pursuant to Kentucky Rules of
Civil Procedure (CR) 65.0'7(1), for interlocutory relief pending the appeal of an
order of the Boone Circuit Court which directs him to turn over any and all
disbursements he receives from his interest in the law firm Waite, Schneider,
Bayless & Chesley Co., L.P.A (WSBC) to the attorney for Mildred Abbott, et al.,
in enforcement of the judgment rendered against. him on October 22.2014.
With
his petition, Chesley also filed a motion for emergency intermediate relief under
CR 65.07(6) to stay the order pending this Court's decision on his motion for
interlocutory relief. We deny intermediate relief.
1
The October 22, 20 J 4 judgment against Chesley stems from his role
in what has became known as the "fen-phen" diet drug case (the Guard case).
Briefly stated, Chesley breached his fiduciary duty to clients by taking a
significantly greater fee for his work than he was entitled to, and doing so without
the knowledge or consent of the clients. In its order) the circuit court found
Chesley jointly and severally liable for the $42 million owed to the plaintiffs as
recovery for the breach, Chesley appealed that order (20 14-CA-OO1900). but did
not post a supersedeas bond to ensure the judgment would be stayed pending his
appeal.
Chesley was disbarred by the Kentucky Supreme Court, and
subsequently resigned his Ohio law license. Because Ohio does not allow a nonattorney to own an interest in a law finn, Chesley transferred his interest in WSBC
to a trust held by an Ohio attorney, who was authorized to liquidate the assets, pay
creditors, and distribute the remaining assets. Chesley holds the only shares in
WSBC, and had transferred more than $59 million dollars from his personal
accounts to WSBCt including over one million dollars after the trust was in place.
On June 9,20151 the circuit court conducted a hearing on Abbott's
motion to transfer Chesley'S beneficial interest in the trust to satisfy the $42
million judgment, Abbott argued that because the circuit court had jurisdiction
over Chesley himself, it had the authority to order him to direct the trust to pay
3/6
P 4/6
2015-08~25 13:07
over any funds he would receive to Abbott's attorney to settle the October 22, 2014
judgment. Chesley countered that because the trust was located in Ohio, tho circuit.
COUlt
71 S.W.3d 748,
750 (Ky, 2002), Furthermore, this Court must consider whether "movant will
suffer irreparable injury before the motion will be considered by a panel." CR
65.07(6). Courts have long construed "irreparable injury" as "something of a
ruinous nature." Bender
P.
of the order'
P 5/6
the $42 million judgment. The order was not entered during the pendency of the
lawsuit itself, and it certainly does not render a final Judgment ineffectual--on
the
contrary, it is designed to give effect to that final judgment. "The failure to post
a bond ... leaves the party who obtained the judgment free to execute on it." Elk
Horn Coal Corp. v. Cheyenne Resources, Inc., 163 S.W.3d 408, 419-20 (Ky.
2005). ReIief under 65 .07( 6) is unavailable.
Nor has Chesley shown he will suffer irreparable injury before his
motion will be considered. Although he has been ordered to direct any monies
dispersed to him by the trust to satisfy the judgment of October 2212014, he has
not shown that any disbursement is imminent. Nor has he shown that he will suffer
anything more than "[ljnconvenlence, expense, [and] annoyance." Fritsch v.
I Movunt, perhaps unticipatlng CR 65.07 was not an available avenue of relief, has also
tiled a petition for a writ of prohibition pursuant to CR 76.36.
2015-08-25
13:10
Norsworthy v. Kentucky Rd. of Medical Licensure} 330 S.W.3d 58,62 (Ky. 2009),
Finally. he has not shown that any injury could not be righted by seeking
reimbursement of any monies improperly turned over to plaintiffs' attorney should
he succeed on appeal. His argument that the money is "likely unrecoverable" is
mere speculation. If he had been concerned about such injury, he could have
posted a supersedeas bond to stay the judgment pending appeal.
Because Movant is unlikely to succeed on his motion for
interlocutory relief pursuant to CR 65.07~ and because he has not shown
irreparable injury, the Court orders that the motion for intermediate reliefbe~ and
hereby is, DENIED. The motion to supplement the record on the motion for
intermediate rei ief is therefore DENIED as moot The motion for interlocutory
relief will come before a three judge panel of this Court,
ENTERED:
AUG 252015_"__
l)v
~~D
) COURT OI~PPEALS
5
P 6/6
'"10
ci
~
~
~
EXHIBIT
?
ENTERED
BOONE CIRCUIT/DISTRICT COURT
COMMONWEALTH OF KENTIJC KY
JUN
BOONE CIRCUIT COURT
DIAN
DIVISION III
BY:
CASE NO. 05-CI-00436
23 2015
AV, CLERK
PLAINTIFFS
V.
ST ANLEY M. CHESLEY, et aI.
DEFENDANTS
ORDER
This matter is before the Court on Plaintiffs' Second Motion for Contempt Against
Defendant Stanley M. Chesley and His Counsel and/or to Compel Discovery Responses. The
Court having reviewed the Plaintiffs' Motion, the Defendant's Response, the parties' exhibits, and
having heard argument from counsel, and being in all ways sufficiently advised, finds as follows:
Plaintiffs have served interrogatories and requests for production of documents regarding
Defendant Chesley's assets available to satisfy the Judgment. These interrogatories were initially
served on December 3,2014. On December 19,2014, it was agreed that Defendant Chesley
would be given a thirty day extension to answer said discovery. After Chesley first answered
Plaintiffs' Interrogatories and Requests, he provided supplemental answers on February 24,2015,
April 7, 2015 and June 2, 2015.
Plaintiffs argue Chesley'S answers and responses are still deficient with regard to
Interrogatories No.1, 3,5,6,
14, 16 and 22 and Requests for Production No. 1,2,6 and 12.
Plaintiffs ask the Court to find Chesley and his counsel in contempt and order them to turn over to
the Plaintiffs all documentation they were previously ordered by this Court to produce. Plaintiffs
further request an award of attorney's fees and expenses.
The Court finds Defendant Chesley has failed to comply with its previous orders. This
failure to comply includes, but is not limited to. Defendant Chesley's failure to fully respond to
1
D.C.
Plaintiffs' request for information and documents related to Chesley's interest in Waite, Schneider.
Bayless & Chesley Co., L.P.A. (WSBC).
i"C"
DATED this
2J_
J~~
1
1
COURT
HAMILTON
OF COMMON
EXHIBIT
PLEAS
COUNTY,
OHIO
STANLEY
M. CHESLEY,
)
)
PLAINTIFF,
)
)
vs.
) CASE
NO. A-1500067
ANGELA
M. FORD,
ESQ.,
)
)
DEFENDANT.
10
TRANSCRIPT
OF PROCEEDINGS
11
12
APPEARANCES:
13
14
vi ncent Mauer,
On behalf
15
Donald
Esq.
of the
Plaintiff
J. Rafferty,
Esq.
On behalf of Intervening
plaintiff
16
17
Brian sullivan,
Esq.
Christen
Steimle,
Esq.
On behalf of the Defendant.
18
19
BE IT REMEMBERED
20
21
the Honorable
22
of the said
23
were
24
25
had.
Robert
court,
that
on J ul y 8,
P. Ruehlman,
the following
upon
2015,
a said
the
before
judge
proceedings
2
1
MORNING
THE
SESSION.
COURT:
Chesley
versus
you
to wait.
had
Okay.
Ford.
MR.
SULLIVAN:
THE
COURT:
MR.
entered
10
like
11
for
All
two
Sorry,
how
are you?
So what's
you
signed
default,
SULLIVAN:
motion,
one
on the
15
the
clock
16
THE
that
going
MR.
realize
20
you
so it looks
on the
a moot
motion
issue.
Right.
And
Rule
ticks
on that.
COURT:
Yeah,
on June
18
order
so that's
MR.
I saw
yesterday,
the
13
14
well,
orders
COURT:
you
12,
signed
the
so I guess
we talked
about
24th.
SULLIVAN:
vince
yeah.
had tendered
MR.
MAUER:
Yeah,
22
THE
COURT:
He sent
23
MR.
MAUER:
Yeah.
21
right.
Judge,
SULLIVAN:
THE
19
On A-1500067.
Good.
12
17
2015
on now?
8
9
8.
July
I didn't
i t to you.
I sent
it two
days
24
them
and
25
them
and we
sent
them
sent
to me,
them
up.
it to you.
Brian
signed
and
I signed
3
1
THE
signed
off
3
4
MR.
they
got
5
6
COURT:
up,
change,
moved
that's
why.
So I signed
SULLIVAN:
if you
The
will,
to intervene.
10
chatted
11
proposed
12
the
rules.
I think
13
me,
we will
file
briefly.
off
on
onl y I guess
1S Mr.
Rafferty
He and
I have
He did
pl eadi ng,
THE
14
not
has
attach
his
that
to
1n opposition.
COURT:
That's
MAUER:
That
a motion
to
intervene
MR.
16
of Waite
schneider
MR.
18
19
di d n 't know
I just
COURT:
MR.
17
all
yeah.
15
It was
on.
SULLIVAN:
THE
them,
Yeah.
Bayliss
MR.
MAUER:
21
MR.
SULLIVAN:
unique
23
were
here
24
has
issued
25
first
be on behalf
and
chesley.
For Waite
schneider
chesley.
20
22
Bayliss
RAFFERTY:
and
would
issue,
last
For
Judge,
time
a series
of which
the
fi rm.
It does
present
because
since
the
Court
of
rulings.
is probably
the
a
we
in Kentucky
The
most
4
1
significant,
waite
schneider
been
transferred
my client
judgment
jurisdiction
10
Mr. Chesley
11
He's
12
trustee,
13
clients
been
14
have
They
have
has been
and
ordered
to do that.
the
to my
will
16
whether
17
standing
18
intervene,
19
a beneficial
20
we will
25
his
him in Kentucky?
ordered
15
a lot of issues
Kentucky
or/and
to have waite
since
owner
second
which
we
including
Mr. Rehme
has
schneider
Mr. chesley
is no longer
by court
get to that
The
order.
But
in the briefing.
is the Court
in
--
THE COURT:
23
to
if
of Mr. Chesley,
divert
50
21
of a court
Do they
MR. SULLIVAN:
24
50
in
has
of her clients,
creditors.
over
interest
and chesley
by order
on behalf
jurisdiction
22
Bayliss
THE COURT:
6
7
is Mr. chesley's
That's
Kentucky,
that
isn't
MR. SULLIVAN:
well,
they
did have
5
1
jurisdiction
know,
was a subpoena
There
whether
Clark
respond.
on that
schaefer
to respond,
today,
10
of fact.
So their
objections
11
were
12
frankly,
13
this
14
himself
was reprimanded
15
failing
to comply
16
discovery,
and he's
been held
17
sanctions,
and he's
supposed
18
additional
discovery
19
Kentucky.
undisputed.
The second
to Clark
they
schaefer
The Kentucky
as well
overruled
point.
It's
this
to tell
Court
and I think
issue
about
have
and ordered
a moot
Hackett.
over here
didn't
you
is -- there
20
that's,
to
has spoken
Clark
as a matter
in Kentucky
that's,
for this
Court
at
with
by the Court
post-judgment
to
to produce
to Ms. Ford in
doesn't
belong
all along
21
that
22
the Court's
23
ruling
but I think
24
important
25
significant
to the contrary,
the Court
rulings
for
be aware
that
here,
it's
of those
came out of
6
1
Kentucky
real
decide
preliminary
the
going
purpose
we were
we're
if we're
form
of that
SULLIVAN:
know,
12
one
13
preliminary
14
have
15
position,
Honor.
but
thing
16
It's
gone
THE
But
a
what's
and when
the
are we
Battle
that
I think
it's
back
and
based
of the
18
appealed
yet,
we might,
-- you
-- you
know,
hearing
forth,
which
it's
Because
even
has
MR.
SULLIVAN:
MR.
MAUER:
MR.
SULLIVAN:
the
to the
been
on representation
COURT:
hasn't
it's
it relates
injunction
Kentucky
19
It appears
I think
17
the
we
our
--
judgment
been
completely
It's
been
it?
appealed,
yes.
21
25
The
is to
hearing,
hearing
MR.
11
24
today
to have
injunction
COURT:
Your
23
going
THE
10
22
here
last.
Courts.
20
here
to do it.
7
8
since
The
appeal
is pending,
Judge.
But
the appeal
is
pending.
THE
COURT:
well,
if it's
pending,
in
7
1
why
Appeals
don't
they
rules
MR.
Ms.
Ford
her
judgment
she
could
entities
Rehme.
But
things
will
11
motion
12
to you.
That
chosen
here
truly
like
of their
the Court
of
--
appeal
is pending.
not to domesticate
in ohio,
ln which
try
to attack
waite,
schneider
as Mr.
be briefed,
opposition
I'm
and Mr.
said,
those
sure,
as part
to waite
and
case
ohio
Sullivan
to intervene
13
14
has
until
on it before
MAUER:
10
wait
schneider's
so they'll
THE
COURT:
why
don't
she
MR.
MAUER:
she
could.
but
she's
chosen
come
come
here?
15
16
party
17
anything
here,
more
MR.
18
19
more
than
20
that
the
21
doesn't
22
this
23
The
Courts
24
over
him.
25
collect,
not
to do
in ohio.
SULLIVAN:
that,
ohio
have
she's
well,
Judge.
Court,
It's
our
over
in Kentucky
because
has
position
her
It is a Kentucky
she
a lot
respectfully,
jurisdiction
matter.
it's
that
have
matter.
jurisdiction
right
he didn't
or
to try
post
the
to
8
1
supercedes
appeal.
is the
right
to try
to collect
she's
doing,
including
requiring
her.
8
9
bond
to seek
So the
appeal
answer
his
our
position
11
pretty
12
evidentiary
13
testimony,
whether
14
way,
we think
15
plaintiff
16
witness
17
Mr.
18
us the
19
put
on our
20
the
Court
21
would
22
we would
23
sooner
24
under
25
January
clear
--
it has
which
put
opportunity
own
today
know,
think
it's
the
law
have
the
through
whether
other
to take
to do it our
is to have
the
it be
witness,
and
the
preference.
than
that
later
restraining
year.
is
to be an
you want
witness
of this
if we're
1S
you
to
allow
to cross-examine
be hoping
this
be transferred
so you
as to what
rather
order
got
here;
or any
be our
recent
on evidence
stand
Chesley
this
hearing,
every
what
a hearing,
been
she has
that's
we are
10
question
and
interest
to have
pending
to your
is pending,
But where
gOlng
a stay
then
law
And
could
given
order
and
argue
is.
to
That
certainly
be done
that
since
we're
9
1
MR.
MAUER:
it's
evidence
discussed
last
interest
of the
but
Federal
of the
she wants
10
the
our
preference
After
some
the
only
in him
married
to a
Judge,
who
is one
Board
has
said
this
to you
13
lawyers
14
some
15
which
16
confusing
and
17
we stand
here
18
it was
19
know
20
Mr.
21
complaint
25
he's
We
action
against
is
Judge.
client
24
chesley's
here
not
Court
that
12
23
fact
to take
Mr.
we were
press;
District
clearly,
by deposition.
time
the
people
Judge,
that
be presented
because
11
22
And,
permit
to intervene,
in this
have
matter
have
might
testimony
longer.
today,
time
the
who
And,
it's
we were
have
facts,
more
finally,
still
here,
issues
time
to respond
is still
three
a little
factual
Sullivan's
Rafferty's
in presenting
make
last
what
we will
interest
would
Mr.
as
true,
I
are,
as
don't
I
mean,
to our
open.
THE
COURT:
He has
not
MR.
MAUER:
He hasn't
responded
yet?
we don't
know
what
the
responded,
factual
issues
so
10
1
are.
2
3
THE
COURT:
Let's
MR.
MAUER:
I couldn't
we're
of testimony.
talking
THE
response
what
about
COURT:
first,
we're
10
MR.
agree
and
12
signed
the
13
didn't
start
the
15
MR.
SULLIVAN:
MR.
is that,
until
you
the
clock
We
I know.
We have,
I thi n k ,
MAUER:
Now
you
got
plenty
of
to respond.
19
THE
COURT:
See what
MR.
MAUER:
And
the
response
1S
21
22
factual
23
know,
25
hearing.
days.
17
24
decide
ticking.
COURT:
20
hours
we will
yesterday,
THE
time
have
if
We wi 11 respond.
law
order
you
or ten
to do on this
14
ten
then
SULLIVAN:
all
tell
an hour
-- let's
going
11
18
a response
first
16
have
issues
develop
Mr.
Rafferty's
THE
COURT:
response,
and
then
see what
the
as against,
you
cl i ent.
So you
we got
have
to have
to decide
the
11
1
intervention.
MR.
2
3
waite
party.
SULLIVAN:
schneider
Right.
Then
intervenes
to become
THE
a hearing.
MR.
RAFFERTY:
Because,
Judge,
and
in the
you,
papers,
COURT:
And
it's
my view
point
then
our
there's
this
11
denied
12
jurisdiction
13
spoken
14
relative
15
rights
16
schneider.
17
doesn't
18
And
19
resolve
20
intervention
is resolved,
21
other,
know
the
respect
to Waite
she may
those
to me;
And
your
23
good
we get
24
identify
those
25
issues.
We will
in our
view.
place
once
to
the
one way
suggestion
the
have
It
an answer,
get
you
here.
direction
disputed
have
waite
is the
what
have
and what
is properly
this
at
issues
in Kentucky,
So I think
you
vis-a-vis
issues.
we'll
you
and
schneider
That
belong
is that
case,
to the
have
so we think
22
this
tell
motion
to dismiss,
over
it for
I'll
no question
motion
with
we set
view,
10
whether
issues,
or the
to go.
sounds
which
would
factual
intervention
12
1
issue
resolved,
here
and figure
hearing.
MR. MAUER:
will
take.
be in the hearing,
MR. SULLIVAN:
that,
order,
Judge,
TRO mind
11
MR. SULLIVAN:
from
to
a restraining
January
6th.
I know.
that
12
we're
under
13
know,
14
even
15
times
the Court
under
you,
THE COURT:
parties
is we're
10
same order
which,
under
is limited
you
Rule
65,
on how many
it can continue.
THE COURT:
16
17
in
well,
the intervention
first,
MR. SULLIVAN:
18
the motion
we have to have
don't
I don't
you?
think
so,
19
because
20
21
seeking
the preliminary
injunction.
22
whether
waite
belongs
23
case
or doesn't
24
have
been
25
schneider
pending
belong
by
in the
in the case,
the case
who believes
So
we
13
1
entitled
clients.
to enjoin
THE
an answer.
file
more
the
Ms.
COURT:
well,
File
answer,
MR.
SULLIVAN:
THE
COURT:
10
answer
how
to have
11
to go into,
13
case.
THE
there's
16
you
have
19
within
20
need
then
we will
know
ten
That's
HOW
going
well,
days,
MR.
SULLIVAN:
in that
Court
it's,
I mean,
do you
think
I thi nk we
so we will
period,
a simple
what
quick
SULLIVAN:
22
the
your
a whol e lot
just
answer?
COURT:
25
file
you're
your
THE
security
put
COURT:
21
24
you
There's
an extension,
tied
quick
is not
that
23
you
My poi nt onl y is --
this
have
MR.
18
to file
when
you
a lot.
will
17
need
answer,
SULLIVAN:
12
15
you
her
your
How
quick
and
counterclaims.
MR.
14
Ford
certainly
obviously,
I mean,
do it
we won't
you
know
--
okay.
Again,
we're
restrained,
you
-- but
know,
our
hands
are
there's
significant
it is a significant
no
of
14
1
issue,
Kentucky
Mr.
of his
Bayliss
from
money
why
ordered
Mr.
chesley
10
account
for
that.
Judge,
court
Chesley
has
and
it's
just
name
chesley
practice
has
gone
we don't
proceeds
of left
14
this
15
Ms.
16
that
out,
17
from
doing
18
to the
19
clearly
20
judgment
handcuffed
money
Ford
going.
yet
goes
in here,
we can't
have
has
to
on and
we're
the
sort
out where
And
entitled,
we're
in Kentucky
And
even
here
we could
restraint,
1S
to find
restrained
argue
but
domesticate
the
-RAFFERTY:
well,
23
MR.
SULLIVAN:
-- under
24
restraining
order.
25
MR.
RAFFERTY:
22
Court
to figure
MR.
21
that
and that's
the
this
we're
of the
schneider
know,
you
anything.
scope
out
and where
that
is entitled
and
that
he resigned
that
this
the
$59 million
of law,
longer
13
determined
before
So the
longer
example,
to Waite
significant
12
for
transferred
personal
the
11
because,
that's
not
true.
That's
the
not
current
true.
15
1
The
ohio
law
what
it says.
If they
with
Ohio
as identified
they
could
eight
restraining
with
do whatever
restraining
and
order
you
law,
ago,
law
and you
COURT:
11
MR.
RAFFERTY:
comply
that's
to comply
in there,
have
done
that's
It says,
with
It doesn't
ohio
law.
MR.
SULLIVAN:
We di sagree.
15
THE
COURT:
file
Right.
16
file
your
answer,
and
17
It's
gonna
take,
what,
18
give
you
19
it over.
22
them
ten
23
in the
24
are
25
long,
days.
MAUER:
are
within
So file
then
ten
And
We'll
the
respective
I would
no counterclaims,
if there
your
days
you're
--
set it.
or so,
gonna
look
it over
and
we will
answer
period.
And
think
it won't
are,
your
response,
let's
look
counterclaims
meantime
but
and
say you
14
if there
comply
Right.
COURT:
21
the
can domesticate
THE
MR.
this
what
13
20
with
it is.
THE
can't
could
says.
10
12
want
I mean,
order
ohio
comply
can domesticate,
-- they
months
says,
then
-- if there
take
that's
that
fine.
16
1
That
response
to intervene,
could
put
same
time.
should
We will
decide
let's
10
14
Judge,
about
not
attaching
the
that.
we will
So
I do apologize
complaint.
SULLIVAN:
I'm
sure
it was
not
intentional.
MR.
RAFFERTY:
Oops.
16
MR.
SULLIVAN:
I told
17
you
18
rules.
know
19
THE
August
21
22
hear
on.
15
20
at the
do it on a date
else
And
we
later.
-- I'll
anything
motion
then
testimony
RAFFERTY:
MR.
let's
and
their
think
of those
first,
the
time
Rafferty's
Yeah,
it down
have
the
I would
both
COURT:
MR.
13
to Mr.
do that
I don't
for
due
be about
it for
set
11
12
1S
THE
just
Mr.
Harper,
COURT:
Chris
he said,
I got
-- and
read
nothing
the
on
19th.
MR.
MAUER:
MR.
SULLIVAN:
I think
that
will
be
fine.
23
That's
24
I am not
going
to beat
25
but,
know,
since
you
the
fi ne.
dead
Agai n,
horse,
it is an injunction
17
1
we take
matters,
could
get
precedence
and
have
the
Mr.
over
all
civil
sooner
the
better,
Chesley
us somewhere
MR.
RAFFERTY:
THE
COURT:
I have
8
9
so many
MR.
closed
10
That
I got
MAUER:
And
would
so many
shooting
because
here
and
--
appear
if we
be good.
murders,
cases.
the
courthouse
gets
of a suitcase.
THE
COURT:
That
was
a good
call,
MR.
MAUER:
I am not
saying
it was
THE
COURT:
Did you
see the
picture
16
MR.
MAUER:
I did.
17
THE
COURT:
It's
11
though.
12
13
wrong.
14
15
18
of it?
machine
19
20
worked
MR.
chance
the
well.
MAUER:
we can
amazing,
Judge,
is there
do it the
next
any
--
21
MR.
SULLIVAN:
August
22
MR.
"
MAUER:
I misunderstood
23
24
25
I thought
THE
anything
Mr.
sullivan
COURT:
else
that
was
I just
day,
19th
s fine.
what
saylng.
as soon
just
not have
do it at
18
1
nine
o'clock.
MR.
RAFFERTY:
THE
COURT:
nothing
then.
criminal
plea
bargain,
gets
worked
terrible
You
clear,
12
13
and
14
injunction
16
when
THE
intervene
MR.
17
18
your
19
today,
20
after?
there's
I mean,
I'll
just
have
you
out.
stuff
MR.
15
then
don't
through
until
know,
most
Today
was
Judge,
19th
we'll
any
they
of the
a lot
we're
just
going
Determine
have
hearing,
COURT:
the
stuff
of
so it's
to --
how
and what
preliminary
is that
yeah.
the
plan?
Moti on to
--
MAUER:
motion,
do it
on.
MAUER:
and
to sit
I wait
SULLIVAN:
on the
o'clock?
And
-- because
MR.
10
11
else,
Nine
the
And
a motion
one that
we wi 11 do then,
21
THE
COURT:
22
MR.
SULLIVAN:
23
outstanding
motion
24
MR.
MAUER:
25
MR.
SULLIVAN:
was
too,
Motion
on for
I guess
for
We have
for
-- for
an
hearing,
I guess.
Yes.
So,
okay.
All
19
1
right.
2
3
THE
we're
going
4
5
MR.
SULLIVAN:
How we're
THE
COURT:
MR.
SULLIVAN:
going
injunction.
I think
for
you
just
-Hear
MR.
MAUER:
14
MR.
SULLIVAN:
15
THE
COURT:
the
-- hearing
what
1S
That's
what
we called
it.
16
So continue
17
be -- if there's
18
the
19
don't
20
anything;
21
continue
day
to -- and
before
have
any
and
MAUER:
23
MR.
RAFFERTY:
24
THE
COURT:
us.
then
all
that
problems
I'm
right.
will
call
and make
in progress
if we do,
it until
fi ne.
So,
check
anything
MR.
with
That's
okay.
22
25
how
we said.
12
13
for
guess.
10
11
yeah.
preliminary
it motion
motion
to handle
the
MR.
call
And
MAUER:
to handle
6
7
COURT:
just
us up
sure
we
or
going
to
Thursday.
okay.
Okay.
But make
sure
you
check
20
1
MR.
SULLIVAN:
Nine
MR.
RAFFERTY:
Nine.
THE
COURT:
nine.
day.
I don't
MR.
the
day
11
usually
12
bargaining
13
just
set that
14
on.
I don't
15
anything
so.
are
they
and
The
COURT:
Laura,
on that
BAILIFF:
21
THE
COURT:
out
that's
plea
put
nothing
on that
19th?
day?
I don't
think
have
day,
the
I don't
anything
19th?
think
have
so.
anything
on.
MR.
SULLIVAN:
24
THE
COURT:
You
come
-- do you have
I don't
23
25
and
I'll
Do you
THE
else
Andy
So we will
and
on, Andy,
20
22
get done
everything.
PREM:
with
I just
see anything
else
that
sure.
for me,
down,
else
check
usually
ready
do it at
Nope.
THE
else,
anything
to make
after
MR.
18
19
they
just
We will
COURT:
when
16
have
before
THE
We will
MAUER:
10
17
did we
say?
o'clock,
don't
have
okay.
Okay.
So you're
to sit through
set.
criminal
21
1
stuff.
MR.
MAUER:
Thank
you,
THE
COURT:
Just
devote
the whole
as you
need.
day
then
testimony,
set
it,
set
up like
and we couldn't
to you,
the
10
happened
11
entry,
or as long
day we set
I'll
nothing
that
was
13
MR.
MAUER:
MR.
16
(proceedings
18
19
20
21
22
23
24
25
ago
up on the
I guess.
Okay.
We will
get
it.
Thank
Judge.
15
RAFFERTY:
it
something
we had a mix
my fault
had
of weeks
do it because
SULLIVAN:
17
I'll
I actually
MR.
you,
thing.
else.
12
14
on
same
a couple
And
hearing
do the
-- well,
that
for the
Judge.
Thank
you,
concluded.)
Judge.
22
1
CERTIFICATE
I, BARBARA
LAMBERS,
undersigned,
Hamilton
hereby
certify
that
stated
herein,
I recorded
thereafter
that
a true,
10
said
County
Court
the
foregoing
complete,
stenotype
at the
this
15th
pleas,
time
within
accurate
for
and
place
and
21 pages,
and
of proceedings
is
transcript
of my
notes.
WHEREOF,
day of July,
I hereunto
set my
2015.
13
14
15
16
17
18
19
20
21
22
23
24
25
the
do
in stenotype
the
and
the
Reporter
same
Transcript
IN WITNESS
hand
Court
of Common
transcribed
11
12
an Official
RMR,
BARBARA
Official
Court of
Hamilton
LAMBERS,
RMR
court Reporter
Common pleas
County,
ohio
1
1
COURT
HAMILTON
OF COMMON
PLEAS
EXHIBIT
OHIO
Y<
COUNTY,
3
4
PLAINTIFF,
6
7
)
)
)
)
) CASE
)
)
)
)
M. CHESLEY,
STANLEY
vs.
ANGELA
M. FORD,
ESQ. ,
DEFENDANT.
NO. A-1500067
- - -
10
TRANSCRIPT
11
EXPEDITED
OF PROCEEDINGS
TRANSCRIPT
12
- - -
13
APPEARANCES:
14
Donald J. Rafferty,
vi ncent Mauer, Esq.
Esq.
15
On behalf
of the plaintiff.
16
17
Brian sullivan,
Esq.
Christen
steimle,
Esq.
18
On behalf
of the Defendant.
19
20
BE IT REMEMBERED
21
22
Honorable
23
the said
24
had.
Robert
court,
that
on August
P. Ruehlman,
the following
upon the
19, 2015,
a said
judge
proceedings
the
of
were
25
EDITED
FOR EXPEDITED
PURPOSES
ONLY
2
1
2
_SESSION,
MORt:-JING
THE COURT:
LQ_lS
AUJL~19
l __
So on this -- we got
chesley
versus
Ford A-1500067.
there's
a number
things
the Motion
of motions,
we have to do.
to Amend
10
Sorry,
11
at nine.
12
daughter
13
the preliminary
14
testifying
So
a number
Do you want to do
the Intervenor
I was -- I wanted
issue of
16
THE COURT:
18
19
sounds
20
all those
Judge,
I think that
Take care of
things
today.
21
THE COURT:
okay.
22
MR. MAUER:
23
Motion
to Intervene
24
that's
Mr. Rafferty's
25
You
to get started
MR. MAUER:
discuss
first?
Come on up.
15
17
of
THE COURT:
EDITED
Let's do that.
first?
motion
Yeah,
Your Honor,
for WSBC.
let's do that.
FOR EXPEDITED
PURPOSES
ONLY
3
1
goes along
right?
motion
additional
judgment
ohio
Yes,
to amend,
sir.
too,
The pending
residents
debtors
yes,
THE COURT:
a seat.
This
sir.
okay.
All right.
Your
she's
Honor,
12
Carol
BoggS.
13
who's
14
okay.
Hey, Andy,
16
18
MR. RAFFERTY:
Don Rafferty
20
& chesley.
21
observed,
22
Judge,
23
reargue
24
in the papers,
25
quite
Good morning,
schneider
we have filed,
the intervention
Bayliss
motion.
that's
we think
Judge.
as you just
to go through
clear
Have
for waite
I don't want
by Mr. Mauer.
All ri ght.
a seat.
17
this is
15
19
Have
is
MR. SULLIVAN:
11
that we now
residents,
9
10
MR. MAUER:
the -- it kind of
and
been written
our arguments
are
there.
EDITED
FOR EXPEDITED
PURPOSES
ONLY
Waite
schneider
& chesley
Bayliss
is not presently
represented
this case,
its interests
affected.
who were
were
entered.
been
simply
protected
protected
whose
by the order
those
intervene
11
granting
12
we submitted
the order
order.
13
THE COURT:
14
MR. RAFFERTY :
All right.
15
MR. SULLIVAN:
Your Honor,
17
relates
18
think
19
20
motion
21
here
22
entered
23
transferred
24
interest
25
Ms. Ford,
to
that we requested.
a proposed
Sullivan
have
and we would
16
rights
rights
and violated,
the relief
of folks
that you
10
ln
are clearly
by
We believe
breached
by anyone
okay.
on behalf
of Angela
to the motion
Brian
Ford.
to intervene,
As it
I
intends
appreciates
to do.
last time,
the Kentucky
an order
schneider
on behalf
EDITED
Court
Mr. Chesley's
in waite
what the
beneficial
to my client,
of her clients,
FOR EXPEDITED
PURPOSES
the
ONLY
5
].
judgment
creditor,
is here today,
creditors.
for example,
Ms. Boggs
That
order
is certainly
of the Kentucky
been
stayed
the Court
while
11
been posted
12
effective
13
there's
by Mr. chesley
there's
a valid
the security
that he would
well,
relates
18
not posted
19
to allow
him to appeal
20
transfer
beneficial
21
appealed
that.
22
part
24
25
So
he -- what's
have to post?
the security
which
he's
interest
while
to
he
THE COURT:
he have
be
the order.
How could
17
23
that's
order
MR. SULLIVAN:
16
no security
he appeals
And
for stay in
while
has
to be
that order.
his request
THE COURT:
14
he appeals
because
Mr. chesley
to the jurisdiction
court,
denied
part
15
subject
requested
10
is valid.
How much
security
would
to put up?
MR. SULLIVAN:
EDITED
well,
FOR EXPEDITED
by law, both
PURPOSES
ONLY
6
1
essentially
appeal.
What
amount
while
you
is the judgment?
MR. SULLIVAN:
6
7
the judgment
THE COURT:
was about
well,
$42 million.
THE COURT:
MR. SULLIVAN:
yeah.
And the key there,
10
Judge,
11
the Court
12
waite
13
transferred,
14
couldn't
be transferred,
15
briefed,
argued
is the arguments
didn't
schneider's
today
have authority,
interest
that
couldn't
be
and disposed
16
at the time it
is, there's
been
of.
here before
17
Court
18
people
19
waite
20
destiny,
21
resigned
22
ownership
23
what ownership
24
transferred
25
pursuant
the
only so many
Bayliss
interest
& chesley's
because
He has no
interest
he
And
he had he
to an agreement.
EDITED
FOR EXPEDITED
That interest
PURPOSES
ONLY
7
1
has been
now ordered
to be transferred
to
my client
as trustee
So
Mr. chesley
court
schneider
has no authority
to protect
the interest
of waite
& chesley.
Bayliss
At least
to ask this
two other
parties,
the beneficial
owners
those
clients.
And obviously
10
agreement
11
judgment
12
his former
13
against
14
owners
have
not agreed.
15
that's
left
is Mr. Rehme.
16
the trustee.
17
interest
happened
against
been no
who hold
would
him,
schneider,
there's
Mr. chesley
so obviously
allow
a lawsuit
the beneficial
The only person
Mr. Rehme
is
of the beneficial
And we don't
18
of Waite
one are
19
the briefs
20
filing.
21
I'll
22
the record
23
action,
24
submit
25
to act against
-- it's
who actually
owners.
not clear
authorized
if t
t 's
Mr. Rehme,
to the Court
EDITED
this
-- and
to clarify
from
that for
this
then
I'll
he has no authority
the interest
FOR EXPEDITED
of the owners
PURPOSES
ONLY
8
1
to sue them,
proposed
and that's
pleading
does.
The second
thing,
proposed
intervention
Kentucky
order,
going
on here.
Nobody
Waite
schneider
Bayliss
be wound
with that
up.
what this
Your Honor,
misunderstands
misunderstands
what's
& chesley
10
11
that
12
going
13
14
there
are judgment
15
firm,
there
16
firm,
and there's
17
that
18
nobody
has suggested
19
that's
in jeopardy.
cannot
responsibility,
That process
to be interfered
with,
with
is not
because
he
are employees
somehow
the
Mr. Rehme
responsibility.
the
others
the rights
of the law
of the law
of the law firm
are affected,
for a minute
that
20
21
firm is wound
up by the terms
22
wind-up
23
transfer
what's
24
Kentucky
court
25
agreement,
EDITED
Mr. Rehme
of the
is to
The
do that.
it to Ms. Ford on
FOR EXPEDITED
PURPOSES
ONLY
9
1
behalf
of her clients.
valid
so I'll submit,
different
Judge,
nothing
here.
just identified
intervene
schneider
is not being
by this action.
11
their
12
attacked,
13
abide
14
or not --
16
them?
17
harmed?
didn't
interests
authorize
this;
they claim to
waite
harmed
are being,
or we're
to
of the people
in any way
So they could
say that
you know,
by the Kentucky
protective
How doesn't
order
that harm
MR. SULLIVAN:
18
have authority
because
THE COURT:
15
there's
one, we don't
10
order.
Because
19
20
Bayliss
& Chesley?
21
trustee
22
not agree
23
24
waite
25
the issue
there,
EDITED
schneider
It is -- Mr. Rehme is
The owners
to sue themselves
schneider,
because
of the interest
will
they
of
so it -- I mean, that is
Judge.
FOR EXPEDITED
PURPOSES
ONLY
10
thing
r n addition
the proposed
intervening
Mr. chesley's
complaint
there
is the proposed
course
proposed
to that,
is if you look at
it is futile,
cause
idea,
you're
12
former
13
14
Mr. chesley,
15
transferred
16
her.
17
I'll submit
18
proposition.
21
on.
22
as you know,
against
anybody.
Mr. chesley's
That's
Kind
like Ms.
against
interest
pursuant
has been
to court
order to
Okay.
that
well,
thing.
Honor,
24
philosophical
1ssue,
it S not a
25
an end-around
to say we don't
it 1S a question
FOR EXPEDITED
Go
it is -- Your
23
EDITED
and
Interesting
of a philosophical
MR. SULLIVAN:
no
to allow the
a judgment
whose
of
there's
THE COURT:
case.
you know,
because
saying
like
Ms. Ford,
futile?
of action
pleading,
20
against
amendment
11
19
complaint,
is no cause of action,
10
as -- you know,
of
like what
PURPOSES
ONLY
11
1
we're
getting
in Kentucky
THE COURT:
well,
-it's a lot -- to
philosophy,
philosophy,
different
logic
logic
say, we don't
question,
Kentucky
logics.
It's a
potentially
it is a
but it is in an effort
to
order.
11
THE COURT:
12
MR. SULLIVAN:
yeah.
13
relief
14
in Kentucky,
so let's
15
goes to
question.
MR. SULLIVAN:
10
which
16
which
is a classic
17
in their
18
19
accounting
20
subpoena
21
reason
22
schneider
23
accounting
24
records,
and that's
25
schaefer
Hackett.
proposed
run to ohio
example
of just that,
-- or in their motion
wait a minute,
that's
the
with a
another
because
the
EDITED
FOR EXPEDITED
PURPOSES
ONLY
12
subpoena
was issued
out of Kentucky
schaefer.
Clark
court on Clark
subpoena.
clark
subpoena,
court order
on behalf
court to quash
The Kentucky
schaefer
court
has responded
as it's supposed
to produce
of waite
schaefer
the
said no.
to the
to do, ina
records.
But that
schneider
because
has said, we
10
need to intervene
people
like the
11
accounting
12
jeopardized
13
14
responded
in Kentucky.
15
argument
16
records
17
So that's
18
19
the ohio
to give us relief.
20
that's
21
done issue,
22
by the Kentucky
court
already
moot,
because
already
the
the records.
reason where
that's
they try
well,
that's
been resolved
court.
23
THE COURT:
24
MR. RAFFERTY:
25
THE COURT:
EDITED
and that's
Okay
Judge
Are you done?
FOR EXPEDITED
I'm
PURPOSES
ONLY
13
1
sorry,
respond
to either
I may
I'm sure.
yeah.
MR. SULLIVAN:
THE COURT:
I'm finished.
one of them,
THE COURT:
4
5
mean to interrupt.
MR. SULLIVAN:
2
3
I didn't
cut anybody
you.
off.
10
motion,
11
thing
12
respectfully
13
everything
14
including
15
Mr. chesley's
16
interest,
17
transferred
18
we believe
19
an issue
20
be presented
Judge,
we did support
I would
it.
The only
like to say is we
disagree
with
Mr. Sullivan
explicitly
almost
just said,
the assertion
contingent
to Ms. Ford.
that's
with
22
record
23
Mr. Sullivan
24
legally
25
standing
has been
Now that's
legally
that we expect
that
beneficial
So that's
21
Thank
MR. MAUER:
Okay.
wrong,
and it's
sometime
in the future.
that we just,
most of what
incorrect
in ohio
and
as we are today
here.
EDITED
FOR EXPEDITED
PURPOSES
ONLY
14
1
THE COURT:
MR. RAFFERTY:
share
Mr. Sullivan
first
whether
interfere
orderly
else with
Okay.
Judge,
the disagreement
just
said.
A couple
about
with a wind-down
process
respect
Bayliss
11
you consider
12
money
13
Stan chesley,
14
in Nevada,
15
taking
16
clearly,
17
order,
18
attached
19
to this subject
20
She wants
payable
other
to Waite
action.
acting
which
when
to garnish
not to
Schneider,
in the papers
in
She is clearly,
in violation
of your
among
these
parties
that was
with
respect
matter.
you to deny intervention
21
to Waite
schneider
22
23
beneficial
because
24
to your orders.
She wants
25
required
Kentucky
schneider
interest
to obey
EDITED
rejected
Schneider;
we mentioned
an
schneider
she's trying
to Waite
to
or anything
is easily
that
payable
process,
to Waite
& chesley
10
things,
wind-down
with what
Your Honor,
holder
FOR EXPEDITED
she doesn't
is the
with
respect
us to be
orders
but she
PURPOSES
ONLY
15
1
should
be free to reject,
We think
other
course
do that.
we're
issues
We think that's
entitled
of the case,
THE COURT:
MR. SULLIVAN:
some of these
way over the
we would
Your Honor,
respectfully
11
question:
12
authorized
this filing?
16
to answer,
17
don't
who's
frankly,
I am
well,
he doesn't
have
You
have to answer.
and we're
not being
MR. SULLIVAN:
20
to my
questions.
MR. RAFFERTY:
18
19
Judge,
to answer
THE COURT:
15
MR. RAFFERTY:
not going
be happy to
10
14
and
13
wrong.
to intervene,
ln an orderly
Thank
qn o re , and
Mr. Rafferty
examined.
well,
21
expect
22
certainly,
23
Mauer
respectfully
24
follow,
25
Defendant
just
it can't
chesley
EDITED
I didn't
to be under
oath
in which
disagreed
Mr.
says as
be more clear:
still owns a beneficial
FOR EXPEDITED
PURPOSES
ONLY
16
1
interest
in Waite
chesley.
I think
schneider
we all agree
to that.
MR. RAFFERTY:
No, we don't.
MR. SULLIVAN:
Defendant
shall
direct
in the shares
plaintiffs
within
It doesn't
say Waite
transferred,
be transferred
interest,
whatever
11
12
to direct
13
make
14
all payments
15
the shares
it is, is transferred.
Mr. chesley
18
lawyer
19
of disciplinary
20
different
21
what
22
interfere
23
Kentucky
24
that's
25
interest,
not to
payments,
from chesley's
things,
is ordered
Mr. Rehme,
schneider
of Waite
is
Mr. chesley's
his trustee,
17
to the
schneider
it says,
Again,
interest
10
16
Chesl ey
all Waite
&
Bayliss
make
interest
schneider
in
to us.
the two
issues,
things.
this Court
with
court
-- it's
because
The Kentucky
court
respectfully
cannot
is the order
that the
and
whatever
EDITED
and resigned
that simple,
and
his
FOR EXPEDITED
PURPOSES
ONLY
17
. ,
transferred.
And, again,
I can't
Your Honor,
reemphasize
enough,
that nobody
suggesting
wind-down
happening
that's
that we interfere
exactly
a completely
with the
That's
been
we're
has happened,
different
but
question
10
11
independent
relief
THE COURT:
12
is
you're
an
13
excellent
14
great
but I have to
15
agree
16
I'm going
17
give
18
on to
21
Mr. Sullivan,
to allow
me an entry
you did a
them to intervene,
on that.
MR. RAFFERTY:
19
20
lawyer,
we need
so
We tendered
an
entry.
THE COURT:
Where
there,
is it?
22
got an entry
okay.
23
in the papers,
24
Our system,
25
because
Oh, you
Never
put it
EDITED
FOR EXPEDITED
to
but I have
PURPOSES
ONLY
18
. ,
been trying
1991 -- yeah,
MR. SULLIVAN:
3
4
since
Your Honor,
before
THE COURT:
ahead,
sure.
Take
you're
doing
that,
some people
11
court's
docket
13
MR. SULLIVAN:
14
Your
Honor,
15
would
16
to consult
17
agreed
18
that
19
lot of objections
20
to go through
21
the record
held.)
okay.
So
couple
of things,
First,
upon order.
Because
he's tendered,
to submit
an
the order
we certainly
have a
those
now on
--
THE COURT:
23
MR. SULLIVAN:
25
we got
cases on the
on that order.
22
24
because
here.
were
THE COURT:
While
other
12
go
a look at that.
waiting
(whereupon
could
10
1991 I
Sure.
or consult
with
Mr. Rafferty.
Among
other
EDITED
things,
FOR EXPEDITED
there are
PURPOSES
ONLY
19
1
findings
remember,
lawsuit;
any findings
5
6
-the
made
of fact yet.
I just
you know.
MR. SULLIVAN:
a lot of findings,
January
the restraining
don't
think
I think
that's
MR. RAFFERTY:
14
THE COURT:
16
stuff.
because
18
attorneys
19
Federal
no secret
to
Yeah.
There's
she hired
attorneys
well,
she hired
the case to
okay.
What other
21
finding
22
because
I don't
well,
24
clear
25
order
on January
EDITED
with,
find that as a
MR. SULLIVAN:
23
and
Court.
THE COURT:
20
she was.
--
MR. RAFFERTY:
17
aware of
order.
13
that,
THE COURT:
15
Yeah,
11
12
can we enjoin
THE COURT:
10
order
6th.
let me be
You entered
an
It was ex parte,
FOR EXPEDITED
PURPOSES
ONLY
20
1
That's
hearing.
clear.
THE COURT:
3
4
of that
But then
of it.
MR. SULLIVAN:
a dispute
On January
there's
notice.
but there's
a dispute
constitutes
notice
under
10
sufficient
to make
your
order
11
that
she - -
as to whether
Mr. Mauer
sent
13
get notice
14
notice
of this?
she had
her an e-mail,
that
whether
When
THE COURT:
12
14th
ohio
1 aw
a valid
Obviously,
she has
of it.
MR. SULLIVAN:
15
16
where,
you know,
17
of the papers,
we were
19
would
20
finally
you agree
have
to look
23
honest
24
as I sit here
25
because
with
that
EDITED
in all
do you -- what
is a good
knew about
22
engaged
So when
MR. SULLIVAN:
21
someti me
you know.
THE COURT:
18
Yeah.
date when
this?
You know,
at the calendar,
you,
Judge.
today
she
I woul d
to be
I can't
agree,
it was January
was clearly
6th,
FOR EXPEDITED
PURPOSES
ONLY
21
1
going
quick.
necessary
or not.
THE COURT:
6
7
my courtroom
obviously,
10
Because
of it.
THE COURT:
12
13
MR. SULLIVAN:
Yeah,
14
we removed
15
remanded
16
17
believe,
in March,
I think.
It got
And then we
hearing
with you, I
in April.
courtroom
my
on
MR. RAFFERTY:
20
we came in
THE COURT:
18
Judge,
21
clear,
22
aware
of the restraining
23
fixed
to a date.
24
25
to intervene
your courtroom.
11
19
real
whether
MR. SULLIVAN:
14th without
the finding
THE COURT:
EDITED
just so we're
is not
aware
times
yeah.
FOR EXPEDITED
PURPOSES
ONLY
22
MR. RAFFERTY:
to
our intervention
THE COURT:
MR. RAFFERTY:
-- as it relates
say it happened
okay.
I am not trying
on wednesday
THE COURT:
Exactly.
Because
That's
Go on.
it on 1/14, because
that date.
to
at 3:30.
not a problem.
10
MR. SULLIVAN:
11
THE COURT:
we continued
it to
prior to
12
you
13
called
that
14
order
15
you.
my courtroom
on 1/7.
after I issued
so obviously
MR. SULLIVAN:
16
So that premise
17
falls
18
restraining
19
decision
20
well,
that's
21
which
is referenced,
22
decision,
23
January
24
wrong.
25
she hired
that the
addressed
in the subject
not true.
matter.
That's
THE COURT:
EDITED
just factually
FOR EXPEDITED
PURPOSES
ONLY
23
1
that,
if that's
MR. SULLIVAN:
invited
right
change
problem,
let's
thing
domesticate
11
defined
12
is true.
13
order
14
stipulate
15
prohibit
16
with
We will
not a
that in.
Right.
The next
10
it
just do it
why
to discuss
well,
MR. SULLIVAN:
the Chesley
Paragraph
prohibits
to
judgment
in the restraining
as
order.
2 of your
that.
That
restraining
If they will
that paragraph
2 does not
the domestication,
I can agree
this.
MR. RAFFERTY:
17
that's
18
talked
19
every
20
not believe
21
prohibits
22
you're
23
prohibited
24
1aw.
25
well,
the opportunity
THE COURT:
a problem.
about
Judge,
we have
I personally
the restraining
it.
going
to domesticate,
THE COURT:
EDITED
order
Right.
FOR EXPEDITED
do
If
you're
with ohio
ONLY
24
MR. RAFFERTY:
1
2
3
4
problem
a problem
So abi de by ohi 0
be able to do it.
I
with that.
don't
with?
MR. SULLIVAN:
have any
Judge.
paragraph
order
says:
acting
with
Respondent
Ford,
10
representing
11
respondents
12
filing
13
could
be part of an effort
14
or register
are enjoined
the Chesley
mean what
17
with
18
20
with:
21
judgment,
22
the names,
proposition
Identify
that would
MR. RAFFERTY:
in ohio.
agree
the judgment.
and it describes
24
or
THE COURT:
any
to domesticate
judgment
the people
23
25
from making
MR. RAFFERTY:
19
ohio lawyer
16
their
any counsel
If they will
15
restraining
Yeah.
That would
confi rm
compliance.
EDITED
FOR EXPEDITED
PURPOSES
ONLY
25
do you disagree
the order
date,
the order
10
11
change
the
with what
but
well,
MR. SULLIVAN:
there
isn't a
here.
THE COURT:
I think
you said it
before.
MR. SULLIVAN:
16
17
a finding
18
motion,
19
his beneficial
20
Kentucky.
Okay.
interest
THE COURT:
22
MR. SULLIVAN:
23
on to say:
24
your order.
well,
Then there's
the transfer
is the motion
21
25
Okay.
MR. RAFFERTY:
have argued
14
15
fine.
the
date,
12
13
MR. SULLIVAN:
thing
Let me go back to
other
again.
THE COURT:
what
with?
MR. SULLIVAN:
3
4
okay.
THE COURT:
to transfer
in the court in
she did.
Right,
but they go
That is a direct
That's
MR. RAFFERTY :
EDITED
violation
of
FOR EXPEDITED
if the Judge
PURPOSES
ONLY
26
1
determines
it is, it could
THE COURT:
I think
MR. SULLIVAN:
who has jurisdiction
ordered,
of an ohio order
against
court
jurisdiction.
11
13
Mr. chesley
THE COURT:
got the order
Judge,
THE COURT:
violation.
she went and
-- an order
18
conclusion
19
order
20
21
Kentucky
22
a violation
23
what
25
from a Kentucky
court
court
in a Kentucky
in which
EDITED
that is
That's
saying.
the
has jurisdiction,
of an ohio order.
they're
because
it
Correct.
MR. SULLIVAN:
24
it's
15
17
the Kentucky
be, Judge.
Because
MR. RAFFERTY:
Judge's
judgment
to assert
a direct
14
16
of which
Can~t
has
be a violation
for a Kentucky
MR. RAFFERTY:
12
in Kentucky
is, I believe,
it is, but --
A judge
10
be.
to be clear,
is no law to support
FOR EXPEDITED
PURPOSES
that
ONLY
27
1
proposition.
But if that's
asking
the court
should
be made aware
decide
Kentucky
to find,
the court
what something
the river
occurred
and
in
is a violation.
THE COURT:
What else?
MR. SULLIVAN:
okay.
It goes on to
10
11
schaefer
12
she filed
13
was enforced
14
your order.
That's
15
litigated.
16
clark
17
subpoena;
18
because
19
finding
of fact.
Hackett,
the motion
on a Kentucky
already
20
THE COURT:
21
MR. RAFFERTY:
23
CSH motion
24
THE COURT:
25
MR. RAFFERTY:
of
been
because
to the
it's important
you to make a
If you wanted
EDITED
of which
but, again,
argument.
subpoena
schaefer
22
to compel
We will white
I don't
FOR EXPEDITED
it out.
think it -PURPOSES
ONLY
28
MR. SULLIVAN:
Kentucky
her clients,
against
The Court
found
violation
of his order.
produce
do.
That
was granted.
is in
He failed
as he was
are asking
you to make
her motion
finding
11
Kentucky,
12
jurisdiction
13
your
restraining
14
leap
of faith
15
in the Kentucky
16
somehow
gets ohio
protection
17
Kentucky
matter.
over
order.
without
talking
Judge,
chesley
about
21
ordering
22
times
23
distinct
this is a
basis
to
case
24
25
schneider
the
is the motion
is separate
EDITED
of
in the
here,
to compel,
Bayliss
has
the motion
20
five minutes
court
any legal
that we're
chesley,
him in
Again,
19
motion
to
him, is a violation
MR. RAFFERTY:
18
against
the Kentucky
to
required
10
which
of
to compel
Mr. chesley
discovery
that
on behalf
a motion
Mr. chesley.
They
filed
is in
& chesley
FOR EXPEDITED
schneider
and
and
Waite
documents
ln
PURPOSES
ONLY
29
1
Kentucky.
Now those
THE COURT:
MR. RAFFERTY:
do --
Right.
-- until
she comes
to ohio.
chesley
up being written
10
you that's
11
talking
12
the
talking
about.
What
not what
I'm
about
is
about.
that
said,
There's
16
compel
17
18
chesley
19
That's
20
to.
21
happy
documents
what
Stan,
a motion
separate,
schneider
to
you
&
Bayliss
that's
it, I'm
to.
MR. SULLIVAN:
22
waite
I'm talking
MR. RAFFERTY:
15
to compel
-- and if that's
THE COURT:
13
14
okay.
23
clear
on that
point
24
order
i s what
I'm talking
25
Just so we're
the Kentucky
about.
court
But,
itself
is a
PURPOSES
ONLY
30
1
violation.
also granted
of the exhibits
Judge,
found
the obligation
responses,
information.
includes,
court
1S that they
Mr. chesley
pleadings,
to be in contempt
to compel
and it required
him to produce
information
from waite
11
& chesley.
If Mr. chesley
12
information
1n his possession,
13
required
14
it.
15
court.
That's
an order
MR. RAFFERTY:
Your
order
schneider
from doing
19
order
vacated,
you said,
20
turned
around
and started
21
subpoenas
22
23
her from
24
motion
25
schneider
EDITED
to produce
to all these
Bayliss
he's
18
to compel
Bayliss
of the Kentucky
Judge.
getting.
to
has that
Court
17
that.
"It
not be limited
by a Kentucky
of
discovery
10
16
order
no.
to get your
And so she
sending
other
people
to
Stan chesley
& chesley
FOR EXPEDITED
that the
as to waite
documents,
PURPOSES
ONLY
31
1
because
that's
-- I want to be clear,
if my motion
I am not intending
talking
about
Bayliss
& chesley.
is unclear
Judge,
your
keeps
says,
saying
I'm just
as to Waite
schneider
On that point,
itls important
order
that.
MR. SULLIVAN:
to know,
because
we have been
10
11
Paragraph
12
unknown
13
like
restrained
restrained
3 of your order:
respondents,
14
MS. BOGGS:
15
MR. SULLIVAN:
which
carol
carol
who is with
sorry,
us today,
17
other
18
enjoined
19
collect
20
of ohio,
21
citizen,
or ohio domiciled
acting
from.
Boggs.
16
person
so
Boggs,
and any
on their behalf:
from taking
the Chesley
any action
judgment
11m
Are
to
in the state
resident,
ohio
entity.
22
23
violation
24
tried
25
ohio.
of paragraph
to do anything
she's done
EDITED
3.
she's not
in the State of
stuff in Kentucky,
FOR EXPEDITED
PURPOSES
your
ONLY
32
,
order
boundaries
just
to make
in Kentucky
3 of the order
limited
of the State
so you're
clear,
a finding
4.
10
respondents,
11
on behalf
12
enjoined
13
seeking
14
ohio
15
domiciled
16
collect
ohio
20
it's paragraph
person
exactly
schaefer
citizen,
to any
or ohio
is to
judgment.
what she has done on
other
of your order.
4, not paragraph
MR. SULLIVAN:
are
any subpoena
and on multiple
in violation
it was paragraph
23
it is paragraph
24
25
states,
So
3.
I apologize,
22
because
3 in the papers.
4, Judge,
But if
r'll submit
you
over 49 other
acting
respondents,
if the purpose
the chesley
fronts
it's actually
or testimony
entity
19
21
of Ohio.
documents
the clark
she did
of paragraph
Judge,
from issuing
18
you
on its face is
of the unknown
That's
But
in which
resident,
17
of ohio.
is in violation
to the State
paragraph
the
MR. RAFFERTY:
beyond
FOR EXPEDITED
anybody
PURPOSES
in
ONLY
33
1
Kentucky,
other
THE COURT:
connecticut,
states,
what
your power.
Did you want to respond
MR. RAFFERTY:
Judge,
exercise
case
over which
10
which
is before
It's -- I disagree,
over parties
in a
and
you
THE COURT:
12
MR. RAFFERTY:
restrain
All right.
-- and you can
MS. Ford.
THE COURT:
14
anything
What
1S the one --
else on that?
MR. SULLIVAN:
16
your power to
your authority
11
15
or any
to that?
13
Hawaii,
I guess,
Yeah.
okay.
17
can make,
18
Court,
19
entirety
20
rattled
21
Just
22
that
I actually
23
subparagraph
24
Elmo.
25
go.
we would
object,
obviously,
to the
off.
al so paragraph
objected
I.
the ones
to are
D as in David.
F as in Frank.
H.
So I
E as i n
G, I guess
as in
FOR EXPEDITED
PURPOSES
ONLY
34
1
course,
we object
to that because
adjudicate,
actually
the Kentucky
authority
essentially,
suggest
broad-reaching
which
says:
authority
we disagree
Between
court
to
with.
this court
It
and
the court
it says
court
we respectfully
does not have such
authority.
10
11
orders,
12
13
14
that
as to any
15
ohio
resident,
or ohio
16
domiciled
17
are asking
18
Kentucky
orders,
19
Kentucky
court
20
ohio
21
domiciled
22
that's
23
24
that
authority,
25
tell
a Kentucky
court
ohio
entity.
citizen
so they
a finding
authorized
ohio
that
by the
are unenforceable
entity.
to any
citizen,
or ohio
obviously,
Judge,
a reiteration
EDITED
are the
about that
And then
you to make
resident,
which
of what we believe
the orders
FOR EXPEDITED
have
are not
PURPOSES
ONLY
35
1
enforceable.
Subparagraph
K, we admit waite
Schneider
case, that's
know about
the subparagraph
is an ohio
resident.
factual
Rehme
finding.
not a problem.
We don't
L.
There's
allegation,
Mr. Rehme
been no
no affidavit
to that effect
by Mr.
to make a factual
We agree with M.
Mr. chesley
10
11
ohio
12
wind-up
13
they submitted
14
Court,
15
the Court
agreement,
which
know if
that as an exhibit
to the
times.
MR. SULLIVAN:
submitted,
If it's been
Subparagraph
20
I don't
the
multiple
18
19
MR. RAFFERTY:
16
17
citizen.
Hackett
21
Schaefer
22
That's
23
that very
24
Kentucky
25
Kentucky
court
contrary
as a domiciled
to Kentucky
argument
EDITED
court, which
was rejected
could enforce
FOR EXPEDITED
entity.
by the
the
PURPOSES
ONLY
36
1
subpoena,
improper.
so subparagraph
subparagraph
0 would
P, as in Paul, finds
only contingent
the wind-up
argue
has is identified
agreement.
I don't
10
contingent
remainder.
11
pretty
12
shareholder.
13
interests
14
Rehme.
owns no shares
remainder
agreement.
and has
or interest
in
I think we can
Judge,
whatever
he
in the wind-up
think
it's a
I think
it's
in the shares
his
and trusts
15
be
to Mr.
Q is
16
Mr. chesley
17
entities.
18
we don't
19
20
separate
21
the record
22
23
chesley
24
25
beneficial
We would
and distinct.
to make them
I will note for
transferred
interest
EDITED
has used
court found
situation,
$59 million
after.
FOR EXPEDITED
Mr.
to his
his
So I don't
PURPOSES
ONLY
37
1
know if there
is --
MR. RAFFERTY:
2
3
is utterly
wind-up
That $59,000,000
that's
resolved
$59,000
a red herring,
at some time.
I'm looking
prior
11
disbarment
12
$59,000,000
13
14
15
agreement
at Kentucky
16
in Kentucky,
account
A small portion
to
of that,
was signed.
I agree,
certainly
18
would
object
subparagraph
19
he transferred
17
to your findings
different.
R is a legal
conclusion.
And subparagraph
21
22
out,
It will be
10
20
he throws
and addressed
readdressed.
that
MR. SULLIVAN:
8
9
false,
legal
conclusion
23
as well.
24
order.
25
will
allow Waite
EDITED
S is the same, a
Your Honor,
is the
schneider
FOR EXPEDITED
to intervene
PURPOSES
ONLY
38
1
ln the lawsuit,
their
subparagraph
himself
motion,
saying
relieved
or effectuate
requiring
him to take
10
specified
therein
11
schnei der,
12
schaefer
13
order
but they
about
have
asked
in
is a separate
part of the
entity,
of any obligation
they kept
that he is
to implement
order
any action
with
the trust,
respect
to waite
Mr. Rehme,
or cl ark
Hackett.
Judge,
that's
motion
is they
14
their
15
relief
16
paragraph
17
not only
18
it's
19
Mr. chesley
20
relative
21
jurisdiction.
not even
are asking
I would
for their
22
MR. RAFFERTY:
23
THE COURT:
schrand's
order,
25
Defendant
chesley,
EDITED
That's
court,
Judge,
refer
they
which
has
at Judge
to the
refer
FOR EXPEDITED
do
I can --
I was looking
they
but
tell
to the Kentucky
24
ask that
motion,
--
for
be stricken.
improper
improper
been
to her as
PURPOSES
ONLY
39
1
Honorable
Rep?
Ford.
MR. MAUER:
3
4
Angela
Is she a State
In Kentucky
they refer
to Honorable.
THE COURT:
Honorable?
MR. MAUER:
Right,
I believe
THE COURT:
okay.
They don't
the
Honorable
chesley
10
Defendant
Chesley.
on there,
MR. SULLIVAN:
11
12
chesley
That's
13
THE COURT:
14
MR. RAFFERTY:
okay.
16
but we will
17
number
agree
THE COURT:
19
MR. RAFFERTY:
THE COURT:
What
23
about
25
because
All right.
I don't want
to delete
paragraph
okay.
from the order.
22
24
they put
5 --
18
21
put
at the time.
Judge,
15
20
that's
about
Yeah,
the date,
it.
we never talked
that.
MS. RAFFERTY:
was in there,
EDITED
I think
FOR EXPEDITED
PURPOSES
ONLY
40
1
activities
order
and those
view,
are a direct
order.
for someone
complicit
out, we will
think
to be required
of your
to be
that order,
about
So what
changing
well,
5.
about
the date?
the date.
what
I would
-THE COURT:
14
knew about
15
thing,
16
another
that,
The first
thing
just a general
was
date.
MR. RAF FERTY:
18
question
19
were
--
20
is the first
21
it was the --
talking
23
definitely
24
think,
25
an ex parte
Yeah,
we 11, the
think
about,
the restraining
MR. SULLIVAN:
22
she
time
17
and so
MR. MAUER:
13
in our
it's appropriate
in violating
We talked
suggest
things,
violation
THE COURT:
11
12
don't
other
put it in there.
10
that gave
well,
EDITED
Mr. Mauer
will
order
not it,
it's
maybe
you
-- I
agree that's
order.
FOR EXPEDITED
PURPOSES
ONLY
41
MR. RAFFERTY:
Yeah.
So, maybe
what I would
two together
and called
restraining
point,"
that's
point
MR. RAFFERTY:
them
--
MR. SULLIVAN:
those
she became
aware"
THE COURT:
okay.
10
What other
11
12
MR. RAFFERTY:
13
MR. SULLIVAN:
Five is removed
14
23
24
25
MR. RAFFERTY:
We're
talking
D,
MR. SULLIVAN:
MR. RAFFERTY:
D is -- D is the "at
1S
a finding
of
some point."
MR. MAUER:
21
22
aware."
fact.
19
20
right?
17
18
Okay.
completely.
15
16
day?
Let's do that.
Yeah,
D is at some
point.
MS, STEIMLE:
fi rst order.
MR. SULLIVAN:
EDITED
Yeah E we
FOR EXPEDITED
PURPOSES
ONLY
42
1
objected
Restraining
decision.
MS. STEIMLE:
January
It shoul d be
6th.
MR. SULLIVAN:
first
10
you ought
decision.
okay.
MR. SULLIVAN:
paragraph
is Mr. Rehme's
order to decline
11
order
12
request
13
financial
14
request
15
to Mr. Chesley
16
of the Kentucky
6 of the
that the
from discovery
in Kentucky,
directly
or an order
case.
Judge,
you cannot
we respectfully
18
submit
19
interferes
20
if Mr. Rehme
21
hide behind
22
doesn't
have to comply
23
order.
That's
with
enter
an order
the Kentucky
refuses,
what
24
THE COURT:
25
MR. RAFFERTY:
that
order.
And
certai nl y he can it
EDITED
any
for the
to the extent
emanates
Again,
17
we think
THE COURT:
judicial
says he
paragraph
Any comment
Yeah,
FOR EXPEDITED
6 says.
on that?
I thi nk the
PURPOSES
ONLY
43
1
problem
is the Kentucky
interferes
--
THE COURT:
MR. RAFFERTY:
order
that provision
Yeah.
and so I think
is entirely
THE COURT:
MR. SULLIVAN:
appropriate.
okay.
order
paragraph
The
restraining
and effect.
obviously,
10
our position
11
restraining
12
to August
13
security.
14
that
15
yet, so we would
16
submit
order
17
certainly
18
65.
order
19th,
regard.
terminated
Do you want
from January
without
clear in
is well aware we
has
well,
that's
to comment
MR. RAFFERTY:
appropriate
it's been
THE COURT:
23
especially
the restraining
20
22
Judge,
that lasts
The court
paragraph
okay.
in full force
Rule 65 is pretty
19
21
remains
7 is:
not true.
on that?
as it is.
24
THE COURT:
25
MR. SULLIVAN:
EDITED
All right.
paragraph
FOR EXPEDITED
8 is the
PURPOSES
ONLY
44
1
entry
of the order
Waite
Schneider's
and damages
with
obviously
regard
because
hasn't
intervention.
certainly
11
seems
for Ford's
14
THE COURT:
15
MR. RAFFERTY:
16
THE COURT:
put the order
in that
complaint
yet.
think
So all we
that's
certainly
MR. RAFFERTY:
I mean,
premature
sanctionable,
13
to comply
to their
I don't
THE COURT:
at this point.
All right.
We can take out 8.
All right.
We can take out 8.
okay.
All right.
I'll
on.
18
MR. SULLIVAN:
19
20
the order.
22
order.
the proposed
12
21
failure
it's a little
premature
of
the restraining
10
17
is not a waiver
THE COURT:
If you would
just
to the entirety
Yeah,
that's
of
why I let
23
MR. SULLIVAN:
24
THE COURT:
25
MR. SULLIVAN:
EDITED
I appreciate
that.
All right.
I think it's
FOR EXPEDITED
PURPOSES
ONLY
45
1
Mr. Mauer's
motion
MR. MAUER:
2
3
intention
discussion
complaint
ohioans
1S
it your
to amend
the
take
yeah.
thing
Let me just do
a second.
10
MR. MAUER:
11
(whereupon
Court's
docket
yeah.
other
were
THE COURT:
13
14
Judge,
THE COURT:
12
next.
record.
MR. MAUER:
15
16
court's
permission,
17
office
18
filed
19
additional
will
cases on the
held.)
we're
All right.
Come up guys.
back on the
Go ahead.
Your Honor,
with the
Ms. Adams
from our
to amend
the complaint
specifically
named Ohioans.
20
THE COURT:
Yes.
Okay.
21
MR. MAUER:
Thank
you.
22
MR. SULLIVAN:
23
before
I address
24
issue,
I failed
25
attention,
that we
Your Honor,
could I,
that
I apologize.
EDITED
FOR EXPEDITED
PURPOSES
ONLY
46
1
THE COURT:
MR. SULLIVAN:
just discussed
"order
Waite
Declaratory
order
11
They
16
17
motion
schneider
that we
is captioned
of intervening
Bayliss
& chesley
and Injunctive
granting
well,
for
Relief.
it's actually
didn't
motion
It should
a motion
to
yeah.
to intervene
the motion
It should
seeking
yeah.
that.
MR. RAFFERTY:
19
20
respect
For declaratory
21
the orders
22
of stuff.
--
To intervene,
to the immediate
to waite
It's
the bench?
declaratory
18
and
relief with
actions
Schneider,
about
that kind
23
THE COURT:
24
MR. RAFFERTY:
yeah.
25
MR. SULLIVAN:
I think we're
EDITED
be a
Just a second.
-- may I approach
THE COURT:
judgment,
for injunction.
to pursue
MR. RAFFERTY:
be an
to intervene.
file a motion
THE COURT:
12
15
granting
MR. SULLIVAN:
10
14
The order
intervene.
13
okay.
and debated
THE COURT:
7
8
That's
Exactly.
FOR EXPEDITED
It's the
PURPOSES
ONLY
47
talking
issue,
them
Judge,
THE COURT:
MR. SULLIVAN:
file
their
MR. SULLIVAN:
they've
They
intervening
THE COURT:
asked
11
case,
12
what
13
little
premature
14
motion
for injunction,
15
say,
16
haven't
17
yet,
18
injunction.
but grant
this order
us an injunction.
That's
says.
it's a
22
should
23
plaintiff
24
chesley
25
obligation
to file a
The only
EDITED
thing
this
of intervening
schneider
to file
have the
--
is granted.
an
seems
on the other
Waite
we
complaint
to order
I already
MR. SULLIVAN:
21
And I think
for a nonparty
THE COURT:
injunction
let us in the
and then
19
what
is not only,
even
to
complaint.
Apparently,
discussed
okay,
are going
Right.
10
20
My
yeah.
of paper.
to be in the case.
piece
Then
Bayliss
he'll
&
have an
his complaint.
FOR EXPEDITED
PURPOSES
ONLY
48
MR. RAFFERTY:
confusion
motion
things
is, Judge?
MR. RAFFERTY:
10
things
11
the complaint.
is certainly
THE COURT:
13
MR. RAFFERTY:
things
some of the
and file
yeah.
There were other
15
injunction
There's
already
an
on.
MR. RAFFERTY:
17
-- that were
requested.
19
THE COURT:
20
MR. RAFFERTY:
21
that -- it
Yeah.
12
18
-- the
in the order.
THE COURT:
16
There's
14
marries
22
yeah.
So I think the order
up to the motion.
THE COURT:
23
injunctive
24
get injunctive
25
already
Yeah,
relief.
granted
EDITED
intervene
for
relief,
too, right?
an injunction,
FOR EXPEDITED
but you
PURPOSES
ONLY
49
1
MR. RAFFERTY:
THE COURT:
Correct.
Yeah,
I don't think
it's a problem.
MR. SULLIVAN:
then obviously
we would
the rules
considered.
require
So if he thinks
who sought
because
that security
10
party
11
injunction,
12
13
thought
14
apparently,
15
my --
there's
be
he's just
then as the
and obtained
an
an issue whether
he
MR. RAFFERTY:
16
request,
disagrees
with
No, I don't
17
understand
what you're
18
What
our motion
19
requested
20
2 of the motion
21
It asks for an
22
order
schaefer
23
withhold
24
gone,
25
order
granting
the motion,
EDITED
FOR EXPEDITED
about
talking
in the motion,
directing
is confusing?
clark
documents,
about?
which
I mean,
it
to
PURPOSES
ONLY
50
I mean there
series
requested
become
party
in here,
stuff
aspects
in the motion,
a party,
clearly
okay,
the
and to
and to explicitly
but there's
be a
That's
1n here.
MR. SULLIVAN:
made my point
well,
THE COURT:
12
MR. SULLIVAN:
it's improper
seek an injunction
14
party,
15
the extent
that he wants
16
injunction
today
17
the order
18
so we would
you first
when you're
not a
TO
to get an
is any different
already
than
has entered
object.
THE COURT:
20
we're
21
hearing.
22
hearing
23
talk
24
this complaint
We're
going
to hear
okay,
on the injunction.
about
to
need to be a party.
the court
going
I have
okay.
13
19
I mean,
is
11
25
of the relief
9
10
of different
that,
first.
MS. ADAMS:
EDITED
We have to
Judge,
we recently
FOR EXPEDITED
PURPOSES
ONLY
51
1
identified
we simply
previously
we simply
served.
individuals
separate
judgments,
shouldn't
be named
-- that were
residents
that
in the group
known as unknown
respondents,
wish to identify
separate
THE COURT:
10
them by name
These
with
to amend
the complaint?
MS. ADAMS:
11
12
13
complaint.
14
ohio
yeah.
This is just
motion
to amend the
residents
15
as you well
16
Honor,
know is because
17
proposed
18
of action
against
19
complaint
that's
20
Court,
21
cause
22
or tort,
23
24
essentially
25
whether
complaint
doesn't
state a cause
anybody,
already
and obviously
of action;
before
the
if you don't
whether
state a
it's a contract
a constitutional
violation
or
you know,
it's a futile
amendment,
the
FOR EXPEDITED
or not,
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52
1
doesn't
change
it doesn't
of the claim.
3
4
put before
the court
no claim against
including
our time.
11
previously
12
dismiss,
13
think
my client,
argued
you already
decided
15
MS. ADAMS:
Yes.
16
THE COURT:
Any response
17
MR. SULLIVAN:
complaint
20
defendants
doesn't
you do that.
23
do?
25
I just
get better
the more
is here.
EDITED
okay.
okay.
I'll let
MR. SULLIVAN:
Ms. Boggs
No -- I mean,
you add.
22
24
to that?
THE COURT:
21
so I
that already.
Is that it?
19
to
denied,
THE COURT:
the point
of
that was
in their motion
14
want
at
Ms. Ford,
I just believe
that we've
18
is
a lawyer,
which
There
MS. ADAMS:
10
already.
that they
FOR EXPEDITED
PURPOSES
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1
who's
complaint.
represent
I think
she wants
because
she's
lawsuit
and she's
that's
with a
She's
unrepresented,
to address
now caught
why she's
up in this
a party
to it, so
here.
MS. BOGGS:
Yes, sir.
THE COURT:
Su re.
10
MS. BOGGS:
Hello,
11
THE COURT:
Hello.
12
MS. BOGGS:
I just would
tell my story,
14
made on me.
but
the Court
13
I don't
Judge.
what hardship
15
THE COURT:
okay.
16
MS. BOGGS:
I don't
1ike to
this has
understand
why
17
18
personally
19
against
20
ex-lawyer
21
put a hardship
22
23
the money
him in Kentucky.
Now this
has really
I lost my husband.
because
of all
24
THE COURT:
okay.
25
MS. BOGGS:
whereas,
EDITED
FOR EXPEDITED
if I would
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1
have gotten
to
me, I would
all
that.
THE COURT:
okay.
MS. BOGGS:
the others
THE COURT:
I don't think
ever found
guilty.
prosecuted
criminally;
10
should
11
he was
He was never
found
liable,
MS. BOGGS:
13
There's
14
done in ohio,
15
Kentucky.
16
13-year-old
17
breakdown.
I live in ohio?
been no paperwork
that I have
it don't
18
THE COURT:
okay.
19
MS. BOGGS:
I can't afford
20
lawyer.
21
why is he allowed
23
24
25
say, yeah.
12
22
guilty,
I can't
afford
THE COURT:
to you.
anything
a
else.
to do this?
okay.
we'll
explain
it
MS. BOGGS:
personally
to him.
EDITED
FOR EXPEDITED
you
PURPOSES
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1
hearing
my story.
THE COURT:
Thanks.
little
okay,
I heard
it.
that a
more?
MR. MAUER:
5
6
Honor.
room.
assuming
she is correct,
I believe,
10
creditors,
11
sullivan's
12
judgment
against
Mr. chesley.
13
THE COURT:
Hmm-hmm.
14
MR. MAUER:
And if affirmed
15
appeal,
16
17
18
persons
19
here.
to collect,
if
wi th the 1 aws of
the property
on
and the
and that is
20
THE COURT:
Right.
21
MR. MAUER:
22
any money
23
we're
24
25
not going
THE COURT:
procedure,
to.
We've
Yeah.
now --
It's more
EDITED
and
FOR EXPEDITED
to take
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1
anything
from you.
MR. MAUER:
against
We're
you.
not asking
judgment
We're
going
for
not going to
we're
not going
We're
not
MS. BOGGS:
Excuse
THE COURT:
10
11
MR. MAUER:
12
me.
Just
13
all be enforced
14
as applicable.
And we've
really only
15
added
-- Judge,
16
added
any individual
17
Mr. Sullivan's
18
remove
office
ohio residents
19
THE COURT:
Right.
20
MR. MAUER:
which
21
THE COURT:
ultimately
proved
Yeah,
it's more
procedural.
MR. MAUER:
24
25
Court.
22
23
after
really
because
EDITED
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1
this litigation,
truth
3
4
and that's
to remove
went down.
Right.
it to Federal
MR. SULLIVAN:
I'm stunned
the honest
Yeah,
Court.
Your Honor,
if I
would
may?
somehow
Ms. Boggs
suggest
that I am responsible
being
a defendant
10
identified
in the original
11
an unknown
respondent,
12
creditor.
THE COURT:
13
bring
it to Federal
15
of here to Federal
16
MR. SULLIVAN:
17
THE COURT:
then you filed
19
residents
who's
complaint
Court,
as
to get it out
court,
ri ght?
I did.
In response
to that
20
MR. MAUER:
Correct,
21
THE COURT:
That's
22
you bring
Ms. Boggs
23
to be -- no judgment
24
entered
25
in this case.
you tri ed to
not diversity,
against
for
she is a judgment
well,
14
18
she tried
in.
was ohio
right?
Judge.
the reason
You're
is going
why
not going
to be
FOR EXPEDITED
I won't
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1
allow
that to happen.
to worry,
a procedural
you don't
So you don't
need a lawyer.
thing,
that's
MR. SULLIVAN:
well,
can address
the Court
answer
initial
It's
all.
obviously,
her questions,
she
can
respondents
as
in the
pleading.
10
THE COURT:
11
MR. SULLIVAN:
okay.
And it's not because
12
of any action
13
defendant.
14
a defendant
from day 1.
15
her to defeat
of me, somehow
THE COURT:
17
MR. SULLIVAN:
18
remanded
19
because
20
Mr. chesley's.
back.
THE COURT:
22
MR. SULLIVAN:
24
willing
They identified
to release
THE COURT:
creditor
of
Right.
And she remains
in this case,
EDITED
was
-- so it gets
They
21
defendant
Right.
she's a judgment
23
she became
diversity
16
25
have
unless
they are
her?
They are not looking
FOR EXPEDITED
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1
like
MS. BOGGS:
to answer
There's
that
They
that,
nothing
if MS. Boggs
10
counsel
11
suspicion
12
does
13
her favor
to answer
Right.
MR. MAUER:
what
worry
Your
chooses
to.
this?
there's
not to retai n
I have a strong
everything
on behalf
me
about
about
Honor,
and be involved,
that
required
in 28 days.
in there
so she doesn't
have
summons
THE COURT:
her or anything
that.
against
Mr. Sullivan
roll in
or not
14
THE COURT:
Right.
15
MR. MAUER:
- - as it goes forward.
16
THE COURT:
yeah.
17
to respond
we're
19
20
21
have
MR. MAUER:
18
She doesn't
22
procedural
thing
23
diversity
24
Court's
25
we're
to ask
not going
to
It was just a
to defeat
-- to defeat
jurisdiction,
EDITED
not going
the
the Federal
that's
for anything.
FOR EXPEDITED
all.
They
You don't
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1
have to respond.
1 awyer,
what
fighting
don't
You don't
just wai t.
happens
with
It all depends
the different
worry
about
Thank
THE COURT:
You don't
anything,
so
you.
have to worry
okay?
MS. BOGGS:
I do.
10
THE COURT:
Yeah,
11
courts
that.
MS. BOGGS:
about
on
and stuff,
need to get a
well,
you don't
have to.
MS. BOGGS:
12
13
14
it.
THE COURT:
15
16
that.
You don't
17
or hire
18
All
a lawyer
right.
well,
don't
worry
have to answer
or anything
So don't
worry
about
anything
like that.
about
it.
19
MS. BOGGS:
Thank
20
THE COURT:
Right,
nobody
correct,
Judge.
else?
we got
21
to go after
you.
her?
22
MR. MAUER:
That's
23
THE COURT:
Anything
24
that dealt
25
what
is going
with,
anything
else then?
FOR EXPEDITED
next?
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61
MS. ADAMS:
hearing
respondents
the format
I think
we decided
filed
their
THE COURT:
Yes.
MS. ADAMS:
The
just
permitted
answer
answer
highlights
Mr. Chesley
11
But in subsequent
12
other
13
identified
14
So they
15
choose
16
and make
17
know to be true.
courts,
long time,
21
made
22
shouldn't
23
tedious
24
with
25
is for a media
made in
as Camargo
he lives,
us prove facts
20
The
County.
they've
Mr. Chesley's
be
they correctly
his address
19
should
that
filings
As a result,
answer
by deposition.
lives in Hamilton
know where
this
hearing.
respondent's
even admit
10
state
to discuss
to testify
doesn't
18
at the last
yet they
to argue over
that they already
we think
testimony
Road.
that
might
take a very
be rewarded
hearing
a very
EDITED
as well.
This,
real potential
headache
They
coupled
we feel there
in this case
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..
requires
be permitted
to testify
THE COURT:
3
4
issue
then,
Judge,
well
the maximum
extent
10
hide behind
the confines
11
12
witness
but I would
is
his activities
to
possible,
now wants
of a closed
not be allowed
to
door
to
his testimony.
THE COURT:
15
in here or rather
16
The deposition
17
know
his testimony,
can be released,
MR. SULLIVAN:
19
THE COURT:
no question
well,
Right?
about
22
hearing,
23
to put on proof,
24
evidence
we do it
you
but -I mean,
there's
that?
MR. SULLIVAN:
Your
whether
can
we do it by deposition.
18
25
to publicize
witness
21
like to address,
it is shocking
14
20
the
Apparentl y, that is
the issue,
13
So that's
known
to
by deposition.
okay.
MR. SULLIVAN:
be allowed
One thing
Honor,
about a
is it's their
burden
--
THE COURT:
EDITED
Right.
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63
MR. SULLIVAN:
will testify,
based
but we will
on the proof
THE COURT:
MR. SULLIVAN:
asking
right
difference?
submitted.
to cross-examine,
MR. SULLIVAN:
11
are asking
12
appear
live,
13
closed
door.
what's
well,
I guess they
We're
anything
because
16
testimony,
right?
17
videotaped
and could
18
under
I have to release
19
otherwise
20
have to release
21
or anybody
His testimony
Jack Greiner
his
will be
be recorded.
And
it,
22
MS. ADAMS:
23
MR. SULLIVAN:
24
that's
25
so ...
Absolutely.
interesting
EDITED
the
not hiding
15
law,
the
THE COURT:
14
cross-examine
--
10
know who
Right.
THE COURT:
-- I don't
Yeah,
about
aware
a trial,
Judge,
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have a change
Mr. chesley
meet
why he should
deposition
lives
the other
in dynamics.
who -- of course,
testimony,
out of state,
helps
the court
10
bunch
of media.
12
on his direct
can still
15
get it.
The media
-- it sure
Right.
So they put
THE COURT:
14
to give
beyond
MR. SULLIVAN:
13
as to
exemptions.
11
he doesn1t
requirements
be allowed
THE COURT:
So if
The media,
16
MS. ADAMS:
17
MR. SULLIVAN:
by the way,
they will
Here1s
my point,
they
19
him.
20
21
you know,
in a rebuttal
22
important
23
the stand
so I can cross-examine
24
relative
25
under
let1s
theory
EDITED
so
we cross-examine
on the stand
to what
their
still
Right.
18
And then
--
Rehme
and I decide,
said.
that1s
FOR EXPEDITED
him
I assume
not allowed
PURPOSES
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1
because
2
3
I can't
--
THE COURT:
can bring
That's
You
MR. SULLIVAN:
not true.
in the courtroom
because
decision
going
that matter,
I wouldn't
until
for
10
THE COURT:
11
12
videotape,
13
14
chesley
15
that?
too.
Do Mr. Rehme
MR. RAFFERTY:
too on video,
I don't
17
18
hearing,
THE COURT:
20
MR. RAFFERTY:
21
he would
22
to see --
how is
know whether
okay,
why wouldn't
I don't
23
THE COURT:
24
MR. RAFFERTY:
hearing
do
I mean at a
but --
19
25
Do Mr. Rehme on
on rebuttal
16
-- do them
plays
EDITED
he?
know whether
But we're
going
You might.
-- how the whole
out.
FOR EXPEDITED
PURPOSES
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66
MR. SULLIVAN:
1
2
more
Rehme
going
to put on direct
Mr. chesley
think,
subpoena
in rebuttal
said,
10
reason
then,
well,
Judge,
other
evidence
Mr.
until
then I would
things,
Mr. Rehme
I would
11
THE COURT:
12
MR. SULLIVAN:
13
14
to some extent
Yeah.
I mean,
I am not handcuffing
17
MR. SULLIVAN:
18
I'm saying
19
here,
20
you're
THE COURT:
anything
you want,
23
surrebuttal.
24
day, I don't
25
difference,
EDITED
you want.
this proposed
22
but
you can't.
16
because
you know,
us to some extent,
THE COURT:
15
21
because
all the
testifies,
among
that's
methodology
allowed
to put on
Put on
I had surrebuttal
care.
It doesn't
FOR EXPEDITED
the other
make any
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MR. SULLIVAN:
Yeah,
think,
to be an exhaustive
think
that's
think
it's going
you're
going
that somehow
freely
13
never
14
entire
testimony
or not.
Judge,
Which
for protective
point
19
permanent
20
hearing
to ask
to
I
I have
I submitted
the
testimony.
is a hearing
on a
order.
MR. SULLIVAN:
18
going
I mean,
in 28 years
by deposition
THE COURT:
going
that related
17
I think we're
at the
for a
so we are at a
on the merits
21
THE COURT:
22
MR. SULLIVAN:
23
the burden
24
introduce
25
you're
12
motion
But I
earlier
thing
I don't
11
admit,
it's going
proceeding,
so and so a question
16
I just
10
15
I mean,
Okay.
where
to put on evidence
witnesses
THE COURT:
EDITED
they have
and
and exhibits.
who were you going to
FOR EXPEDITED
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1
you putting
MR. MAUER:
who are
of Mr. chesley,
will testify.
gentleman
counsel
more person
understanding
Your Honor,
I expect
on behalf
named
Frank
in Kentucky.
Benton,
And possibly
one
10
situation
that frankly
11
that person
12
I don't
that he does.
13
14
15
wants
is also an ohio
think
financial
And
resident,
and
to testify
live,
that's
okay.
16
17
testimony
-- we got three
18
We got a situation
where
19
actually
Mr. chesley,
20
reside
21
they chose
22
notwithstanding
23
they
24
debtors'
25
down on Camargo
ask him:
in Hamilton
three
have to identify
EDITED
now.
I have to
County,
not to admit
address
parties
do you
ohio?
Because
that fact,
other
filings
where
the judgment
FOR EXPEDITED
and
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69
1
colorado
and Louisiana,
Court.
this Court.
They won't
It's going
admit
that fact in
Judge.
I do think
the videotape
deposition
go.
exchange,
proposed
10
yesterday
11
of 14 different
12
already
13
admit
14
record.
15
16
understand
17
that,
but if that's
18
wants
to conduct
19
20
suggest
21
of Mr. chesley
is the way to
to
as we do ordinarily,
witness
list.
We filed
in this Court
certified
pleadings
in the record,
in the
County,
that's
them back.
23
MR. SULLIVAN:
and that's
EDITED
to
why we
deposition
of
okay.
I'm almost
as to how to respond
somehow
THE COURT:
you know,
brought
22
25
that were
copies
a videotape
speechless
coples
24
the
Mr. Chesley
FOR EXPEDITED
to that,
is going
PURPOSES
to
ONLY
70
1
be hampered
by identifying
I'm stunned.
You know,
easiest
let's
their witnesses,
to the Court,
we are going
his address,
again,
Judge,
is open,
cross-examine,
submit
THE COURT:
the
it
Instead,
this.
10
do it by videotape
or you want
11
by live,
12
witnesses
13
care.
14
15
videotape,
16
17
that's
18
19
hampered
20
video,
I'm fine,
on video,
that's
to do it
fine,
I don't
that's
fine,
fine,
If you want to
on videotape,
by that,
release
I mean,
be
I'll put it on
21
MR. MAUER:
Yes, sir,
22
THE COURT:
If they want
23
24
you want
25
live,
to do it live,
that's
EDITED
it, they
bring
If
him in
fine too.
FOR EXPEDITED
PURPOSES
ONLY
71
MR. SULLIVAN:
Could we -- we
understand
Mr. chesley
be Mr. Rehme,
THE COURT:
it might
Yeah,
can we hear
person
is?
witnesses?
MR. MAUER:
Judge,
person
is a gentleman
named Steve
Horner.
10
THE COURT:
He's what?
what is he?
11
MR. MAUER:
Horner.
H-O-R-N-E-R.
a part-time
employee
of waite
12
He
13
schneider
14
of the reasons
15
comfortable
saying
we're
going
to call
16
him because
Mr. Rafferty
would
be
17
a Waite
18
employee,
19
but that --
1S
I don't
Schneider
chesley,
So you're
Maybe
Mr. Rehme,
up to Mr. chesley,
24
Benton
25
Kentucky.
and a gentleman
EDITED
calling
Benton?
23
he's
employee,
possibly,
MR. MAUER:
22
is one
& chesley
Horner
which
feel very
Bayliss
THE COURT:
20
21
& chesley,
Bayliss
FOR EXPEDITED
counsel
PURPOSES
that's
named
in
ONLY
72
1
THE COURT:
So five witnesses?
MR. MAUER:
possibly,
MR. SULLIVAN:
Judge.
Is Horner
accountant?
MR. MAUER:
Yes.
THE COURT:
All right.
mean,
I'm going
10
these
folks,
11
don't
12
evidence.
all
Judge,
to put on any
okay.
a restraining
order,
17
earliest
18
fine with
possible
since we're
I think
opportunity
the
will be
us.
THE COURT:
19
okay.
I think
-- did
21
it will
23
25
that,
well,
under
24
but beyond
MR. SULLIVAN:
16
22
know.
15
20
And
to call?
to cross-examine
THE COURT:
13
Okay.
I don't
14
an
take?
MR. MAUER:
Judge,
that's
THE COURT:
couple
hours?
hard to
answer.
EDITED
FOR EXPEDITED
PURPOSES
ONLY
73
MR. MAUER:
of Mr. Chesley
said,
except
to the extent
by
That
of
that
THE COURT:
to it.
10
MR. MAUER:
Yeah.
11
THE COURT:
If you do it live --
12
MR. MAUER:
If we do Mr. Chesley
13
video,
I would
14
with
15
people,
16
you suppose,
If you videotape
MR. RAFFERTY:
18
THE COURT:
Yeah.
And any portion
19
on video,
20
21
22
I guess
23
25
by
17
24
it,
MR. MAUER:
get Mr. chesley
EDITED
next week,
you put
to that and
it, they
the 26th, is
FOR EXPEDITED
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ONLY
74
1
available
videographer,
quick,
right?
open.
because
I don't
Maybe
that would
be too
I have left
MR. MAUER:
THE COURT:
I would
leave
12
this arson
13
year,
14
15
meeting
16
for a meeting
just have to
11
bomb seminar
it's a national
I teach every
seminar.
MR. MAUER:
18
Mr. Rafferty
THE COURT:
You're
20
23rd?
21
22
quickly.
mean,
1S
not good
MR. SULLIVAN:
23
I have that
I'm sorry,
unfortunately,
19
That's
every year.
17
25
going to
you?
10
24
know if a
THE COURT:
for you.
30th?
a month,
Judge,
So we
do it
any day, I
FOR EXPEDITED
PURPOSES
ONLY
75
1
docket
I don't
that day.
MR. SULLIVAN:
THE COURT:
to the court,
day, october
We do take priority.
That
little
quick
1st or something.
I can move that real
quick.
THE COURT:
10
either
11
quick
Yeah,
trial,
we won't
that,
it's like a
and so I'll
13
14
30th,
15
Anything
16
cases.
chesley
preliminary
on the
injunction.
MR. SULLIVAN:
Judge,
I think we're
18
19
injunction
20
do --
one witness.
12
17
trial
THE BAILIFF:
request?
THE COURT:
Yeah,
this is the
21
permanent
injunction
-- or I mean
22
permanent
injunction,
I'm sorry.
23
Permanent
injunction
24
have to issue
25
hearing.
a ruling
And then I
on it after I hear
FOR EXPEDITED
PURPOSES
ONLY
76
1
the testimony
MR. RAFFERTY:
2
3
in.
a.m.,
Judge?
TH E COURT:
starti ng at ni ne
no other
little
things
Pretty
much -- weill
for permanent
10
And we wi 11 have
injunction
that day,
hearing
that
day.
All right.
11
12
cases,
Yeah.
docket
my
that day.
13
MR. SULLIVAN:
Thank
14
MR. MAUER:
Thank
15
THE COURT:
Those
expungements
16
stuff
17
telling
18
sometimes
19
20
today
motions
But 1'11
like we did
so we get done.
22
not going
23
that's
24
anything
25
and
Ma'am,
21
you, Judge.
don't worry
to be
going
about
there's
to be against
it, you're
no judgment
you or
like that.
MS. BOGGS:
EDITED
Thank
you.
FOR EXPEDITED
PURPOSES
ONLY
77
1
THE COURT:
(proceedings
All right.
concluded.)
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
EDITED
FOR EXPEDITED
PURPOSES
ONLY
78
..
CERTIFICATE
I, BARBARA
LAMBERS,
undersigned,
Hamilton
hereby
certify
stated
herein,
I recorded
thereafter
a true,
10
County
court
transcribed
complete,
said stenotype
hand this
Court
Reporter
of Common
in
pleas,
stenotype
the within
Transcript
and accurate
for the
do
and
77 PAGES,
and
of proceedings
is
transcript
of my
notes.
IN WITNESS
11
12
an official
RMR, the
WHEREOF,
I hereunto
13
set my
2015.
/Ja1h~~L_~
14
15
16
17
18
19
20
21
22
23
24
25
EDITED
FOR EXPEDITED
PURPOSES
ONLY
Date:
09/03/2015
Athena Dalton
Time:
11:54
Page:
1 011
September 4, 2015
Source of Application:
Position Applied for:
On Campus Interview
2L Summer Associate
Office:
Denver, CO
Department:
Unknown
Interests:
No
Which Bar:
School:
Ttme
JD Year:
2017
Intervtower
Tetephone
Erich Kennedy
4979
Alan H. Abes
8149
09:00 AM - MST
Erich Kennedy
4979
09:00 AM - MST
Elizabeth M. Shaffer
0845AM
- MST
09:00 AM - MST
GPA: 3879
Class Ranking:
Interview Location
!ntervlew_r~
Video Interview
8128
Video Interview
Greet
In Office
09:30 AM - MST
H. Toby Schisler
8152
Video Interview
09:30 AM - MST
Alicia A. Bond-Lewis
8200
Video Interview
10:00AM - MST
James A. Pinto
4959
10:30 AM - MST
4961
In Office
11:00AM - MST
Jason M. Nutzman
3938
In Office
11:30AM-MST
Donald Bieber
6966
Lunch
11:30AM - MST
Erich Kennedy
4979
Lunch
In Office
Athena Dalton
EDUCATION
Northwestern
University School of Law, Chicago, IL
Candidate, May 2017
OPA 3.879
Journal ofCriminal Law & Criminology
Northwestern Moot Court Society
o Board Member: Competition Director
o Competitor: National Cultural Heritage Competition, Appellate Lawyers Association
o Coach
Kirkland & Ellis Scholar in Evidence (given to the highest grade in the class)
Dean's List: Fall 20 14 and Spring 20J5
.1,1),
University
of Colorado,
GPA 3,85
Major ill Political Science; Minor ill Economics
Worked full-time whi Ie attending school full-time starting sophomore
year
EXPERIENCE
The Honorable
Rebecca R. Pallrn eye r
U.S, District Court for the Northern
District of Illinois, Chicago, II.
Judicial EXtern, September 2015 - December 2015
Will draft opinions, conduct legal research, and write memoranda
matters pending before a U.S. District Court Judge,
U,S. A ttorney's
of law
011
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Drafted motions for pending trials, including II motion in limine in a gun possession case, a
response to a m orion to vacate based on the Supreme COlll1'S recent Elonis ruling, and it
response to a pro Sit motion to dismiss.
Conducted legal research on criminal and civil matters,
Attended and observed trials, hearings, unci other legal proceedings
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LAW SCHOOL:
Year:
1st
Grades/Class Standing:
Law Review. Primary:
Articles, Honors, Activities:
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AREA
or PRIMARY
CLERKSHIPS:
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INTERVIEWING ELSEWHERE:
Other Locations:
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EXHIBIT
'f
II
I II
,,
:COURT OF COMMON PLEAS
HAMILTON COUNTY, OHIO
0111760072
Petitioner,
Judge Ruehlman
v.
Angela M. Ford, Esq.. et al.
ENTERED
Respondents.
AUG 2 62015
This matter came before the Court on the Motion of Intervenor Waite Schneider
Bayless & Chesley Co., L.P.A. ("WSBC") for Declaratory and Injunctive Relief (the
"Motion"). The Court being fully advised and having fully reviewed the Motion. the
Objection field by Defendant Angela M. Ford ("Ford") to the Motion, the Reply filed by
WSBC, and the record In this case, now therefore:
THE COURT FINDS THAT:
A.
The Court has subject matter jurisdiction over this matter and personal
Terms not otherwise defined herein shall have the meaning ascribed to
C.
Order").
880698.4
'f
D.
order on January 14, 2015 Order (the "Restraining Order") which prohibited certain
actions of Ford including but not limited to the below:
Ford, the Unknown Respondents, and any other person acting on
behalf of the Unknown Respondents are enjoined from taking any
actio!l..J.ocollect the Chesley Judgment in the State of Ohio, from
any Ohio resident, Ohio citizen or Ohio domiciled entity; Restraining
Order, paragraph 3. (emphasis added).
Ford, the Unknown Respondents, and any other person acting on
behalf of the Unknown Respondents are fi.!li..0lnedfrom issuing any
subpoena seeking documents or testimocrt to any Ohio resident,
Ohio citizen or Ohio domiciled entity (other than Chesley) if the
purpose of the requested documents or testimony would be to
obtain information related to any effort to enforce the Chesley
Judgment; Restraining Order, paragraph 4. (emphasis added).
D.
E.
Ford has failed to domesticate the Chesley Judgment (as defined in the
Order.
G.
Ford was litigating the substantive issues in the Restraining Order in this
Court well before she asked the Kentucky Court to enter the orders on the Transfer
Motion, the CSH Compel Motion and the Chesley Compel Motion.
H.
Ford filed the Transfer Motion, the CSH Compel Motion and the Chesley
As between this Court and the Kentucky Court, this Court, whose power
was first invoked by the institution of proper proceedings acquired jurisdiction, to the
exclusion of all other tribunals, has exclusive authority to adjudicate upon the whole
2
880698.4
issue and to settle the rights of the parties with respect to the matters set forth in the
Complaint, Restraining Order and the Motion.
J.
As a result of this Court having exclusive jurisdiction over the matters set
for in the Complaint, Motion and Restraining Order, the orders of the Kentucky Court in
relation to the Transfer Motion and the Chesley Compel Motion, including but not limited
to the Transfer Order (the "Kentucky Orders") 1, are unenforceable as to any Ohio
resident, Ohio citizen or Ohio domiciled entity that Ford seeks directly or indirectly, to
aid in the collection of the Chesley Judgment and/ or subpoena seeking documents or
testimony that would aid in the collection of the Chesley Judgment.
K.
Case and the Defendants in this case do not have a judgment against WSBC.
L.
M.
N.
Mr. Chesley owns no shares of WSBC and has only a contingent reminder
interest in the Windup Agreement trust (the "Trust") holding the shares of WSBC.
P.
Q.
because WSBC's unique interests are not adequately represented by the existing
parties.
A copy of the Kentucky Orders are attached to the Objection of Ford as Exhibits A, E and F thereto.
8S0698.~
'.
S.
warranted.
The Court having being fully advised in the premises and having determined that
the legal and factual basis set forth in the Motion establish cause for the relief granted
herein; now therefore,
IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
1.
Orders as same may apply to WSBC or the Trust either directly or indirectly, including
but not limited to the Transfer Order.
3.
Orders as same may apply to Rehme as trustee of the Trust or otherwise, including but
not limited to the Transfer Order.
4.
seeking, among other things, to transfer the interest of Mr. Chesley in the WSBC
Shares, which interest technically does not exist as Mr. Chesley has only a contingent
remainder interest in the Trust.
5.
Rehme is ORDERED to decline any request from Mr. Chesley for WSBC's
financial records to the extent such request emanates from a discovery request directed
to Mr. Chesley in Kentucky or an Order in the Kentucky Case.
6.
880698.4
...
ITS IS SO ORDERED.
Entered thiS~AUgUSt.
2015
Copies to:
Vincent E. Mauer
Frost Brown Todd LLC
3300 Great American Tower
301 E. Fourth Street
Cincinnati, OH 45202
Brian Sullivan
Christen M. Steimle
Dinsmore & Shohl, LLP
255 East Fifth Street, Suite 1900
Cincinnati, OH 45202
880698.4
EXHIBIT
FilED
SEP 03 2015
BOONE CIRCUIT COURT
54TH JUDICIAL DISTRICT
Case No. 05-CI-436
MILDRED ABBOTT, et al.,
PLAINTIFFS
v.
STANLEY M. CHESLEY, et al.,
DEFENDANTS
NOTICE OF HEARING
PLEASE TAKE NOTICE THAT THIS MATTER SHALL COME ON FOR
HEARING ON SEPTEMBER 8, 2015 AT 9:00 A.M. IN THE BOONE CIRCUIT COURT,
OR AS SOON THEREAFTER AS COUNSEL MAY BE HEARD.
Respectfully submitted,
~r~--
~10
Chevy Chase Plaza
836 Euclid Avenue, Suite 311
Lexington, Kentucky 40502
(859) 268-2923
Email: amford@windstream.net
William T. Ramsey
NEAL & HARWELL, PLC
TBANo.9248
150 Fourth Avenue North
Suite 2000
Nashville, TN 37219
(615) 244-1713
Email: bramsey@nealharwell.com
COUNSEL FOR PLAINTIFFS
CERTIFICATE
OF SERVICE
The undersigned hereby certifies that a true and correct copy of the foregoing was served
via electronic and U.S. Mail this the::Z- day of September, 2015, to the following:
Frank Benton, IV, Esq.
P.O. Box 72218
Newport, KY 41072
Mary E. Meade-McKenzie, Esq.
105 Seahawk Drive
Midway, KY 40347
Mitzy L. Evans
Evans Law Office
177 South Main Street
P.O. Box 608
Versailles, KY 40383
Luther C. Conner, Jr., Esq.
103 Cross Street
Albany, KY 42602
Sheryl G. Snyder, Esq.
Griffin Terry Sumner, Esq.
Frost Brown Todd LLC
400 West Market St., 32nd Floor
Louisville, KY 40202
Michael R. Dowling, Esq.
P.O. Box 1689
Ashland, KY 41105-1689
~--
PLAINTIFFS
v.
STANLEY M. CHESLEY, et (II.,
PIJAINTIFFS'
-~,
DEFENDANTS
MOTION TO EXECUTE
Plaintiffs, through counsel and pursuant to CR 69.03 and the Court's inherent authority,
respectfully request that the Court enter an Order executing on the Court's Judgment against
Defendant Stanley M. Chesley as follows: (1) order Chesley to transfer the shares of his former
law firm, Waite, Schneider, Bayless & Chesley, Co., LPA ("WS13C") to Plaintiffs through a
receiver who holds an Ohio law license; (2) order Chesley to direct that all fees owed to him or
to WSBC be paid directly to Plaintiffs through their undersigned counsel; (3) order that fees to
which Chesley and/or WSBC are entitled from
,Qook,et al. v, E,ockwe.ll1nt'l (;,Ql'1h, Case No, 1:90-cv-00181-JLK, in the United States District
Court for the District of Colorado be paid directly to Plaintiffs through their undersigned
counsel. As grounds for this Motion, Plaintiffs would show the Court that it has the authority
under Kentucky law to enforce its Judgment and WSBC is Chesley'S alter ego, used by him to
conceal his assets and place them out of reach of his judgment creditors, A Memorandum of
Law is filed with this Motion.
WHEREFORE, Plaintiffs respectfully request that this COUlt grant their Motion and
execute on their Judgment against Chesley on his property as described herein and in the
accompanying Memorandum of Law.
NOTICE OF HEARING
PLEASE TAKE NOTICE THAT THIS MATTER SHALL COME ON IrOR
HEARING ON SEPTEMBER 8, 2015 AT 9:00 A.M. IN THE BOONE CIRCUIT COURT,
OR AS SOON THEREAFTER AS COUNSEL MAYBE HEARn.
Respectfully submitted,
"
CERTIFICATE OF SERVIC~
The undersigned hereby certifies that a true and correct copy of the foregoing was served
via electronic and U.S. Mail this the ~
day of September, 2015, to the following:
Frank Benton, IV, Esq.
P.O. Box 72218
Newport, KY 41072
Mary E. Meade-Mckenzie, Esq.
105 Seahawk Drive
Midway, KY 40347
Mitzy L. Evans
Evans Law Office
177 South Main Street
P.O. Box 608
Versailles, KY 40383
Luther C. Conner, Jr., Esq.
103 Cross Street
Albany, KY 42602
Sheryl O. Snyder, Esq.
Griffin Terry Sumner, Esq.
Frost Brown Todd LLC
400 West Market St., 32nd Floor
Louisville, KY 40202
Michael R. Dowling, Esq.
P.O. Box 1689
Ashland, KY 41105-1689
PLAINTIFFS
v.
STANLEY M. CHESLEY, et al.,
DEFENDANTS
Additionally, as Plaintiffs have been able to obtain limited discovery from other sources,
it has become clear that Chesley transferred his legal interest in WSBC in name only. He
continues to control
The Wind-Up Agreement and the limited existence of WSI3C exist only to provide Chesley with
a cloak to conceal the fact that he is still controlling WSBC and to shield him from the
consequences of his actions against Plaintiffs by preventing them from collecting their Judgment
against him.
Given the fact that the Wind-Up Agreement has become nothing more than a sham
transaction used by Chesley to put his assets out of reach of his judgment creditors, Plaintiffs
request that this Court further assist in collection of the Judgment against Chesley by ordering
him to transfer the shares of WSBC to Plaintiffs through a receiver who holds an Ohio law
license. Plaintiff" further request that this COUltorder Chesley to direct that all fees owed to him
or to WSBC be paid directly to Plaintiffs through their undersigned counsel.
STATEMENT OF THE CASE
Chesley has not complied with this Court's June 23, 2015 Order requiring him to transfer
his beneficial interest in WSBC to Plaintiffs, to direct that any payments to him from his interest
be turned over to Plaintiffs or to direct the nominal trustee of his shares to make any such
payments to Plaintiffs. See Order (June 23,2015).
The only directive with which Chesley has complied (or at least stated that he complied)
is to provide a copy of the Court's Order to Thomas F. Rehrne, the trustee. Instead, WSBC
moved to intervene in the Ohio action filed by Chesley to block Plaintiffs from enforcing their
Judgment in Ohio. That motion resulted in an order not only allowing intervention, but ordering
that this Court's Orders pertaining to WSBC, Rehme and even Chesley are "unenforceable." Sy~
directs WSBC to disregard any Order of this Court, including the June 23, 2015 Transfer Order,
and to ignore any request by Chesley for discovery in response to any discovery request through
If that were not bad enough, Chesley has given incomplete and intentionally deceptive
answers to discovery responses. As this Court is aware, Plaintiffs have filed multiple motions to
compel discovery responses from Chesley, each of which this Court has granted. See Order
(Feb. 13,2015); Order (Mar. 27,2015); Order (June 9,2015). A number of those requests were
directed to discovery of existing and potential future income and documents related to any such
income, including any debt instruments. Additionally, agreements with his former law firm and
its employees entered into following the initiation of disciplinary proceedings were requested
and while it is likely that such agreements were entered into, since his former employees
continued to practice cases that were nearly complete prior to his disbarment, no such
agreements were produced. In fact, the only potential fee income Chesley has ever identified
was
Chesley intentionally omitted potential future income from a case in Colorado that was
recently remanded by the Tenth Circuit Court of Appeals. See Mel'ilyn Coole, et al. v. Rockwell
Int'l Corp., Case No. 14-1112, slip op. (10th Cir. June 23, 2015) (copy with transmittal letter
from the Office of the Clerk to counsel, including Chesley, attached hereto as Exhibit 2). A
motion for entry of judgment is currently pending in the District Court for that case. Se~ Nt~Jy.n
.c.QQk,_~tal. ~. Rockwell Int'tQ)[P"., Case No. 1:90-cv-00181-11,K, in the United States District
Despite WSBC being represented by counsel on its motion to intervene, the Order only provides notice to
counsel for Chesley and undersigned counsel. Se\'l Exhibit 1.
Court for the District of Colorado at D.E. 2367, 2371, 2371-1. The proposed judgment with
interest is over $1 billion, with attorney's fees to be determined at a later time. Id. at D.E. 23713. Chesley never disclosed this lawsuit, despite the fact that the trial in the action was completed
prior to his disbarment and he would be entitled to one of the largest fees of his career. Former
employees of WSBC, now with Markovits, Stock & Demarco, continue as counsel in the action.
Chesley also failed to mention fees from the Fannie Mae Securities Litigation case. See
In Re Fannie Mae Securities Litig., Case No. 1:04-CV-01639 in the United States District Court
for the District of Columbia.
was
i.e.,
so Plaintiffs
rd.
Chesley exercised
Exhibit 7).
Wind Up agreement.
rd.
5
attached as
See
Exhibit 11. _have
This
COUlt should not allow Chesley to continue to use a sham Wind-Up Agreement and use WSBC
to hide his assets in order to keep Plaintiffs from executing on their Judgment.
ARGUMENT
I.
ITS AUTHORITY
TO ENFORCE THE
As this Court is aware from its June 23, 2015 Order, it has the authority to enforce its
judgments. See Shil1by Petroleum Corp. v. Croucher, 814 S.W.2d 930,933 (Ky. App. 1991); see
also Akers_y, StephensQ..ll,469 S.W.2d 704, 706 QCy. 1970); J.3J.C., Inc. v. Bank of Va., 583
S.W.2d 72,75 (Ky. App. 1979). CR 69.03 allows this Court to direct enforcement of a judgment
other than by a writ of execution.
This Court has personal jurisdiction over Chesley and may, therefore, exercise that
jurisdiction to take action to compel him to act with respect to enforcement of the Judgment,
including as to property located outside Kentucky. Sey' Koehler y. J3ank of Bermuda Ltd., 544
F.3d 78, 8S (2Ud Cir. 2008); Estates ofl)ngar ex rel...Strachman y. Palestiniill1 AuthQrity, 715 F.
Supp. 2d 253, 262-64 (D.R.l. 2010); TWE Retirem~nt Fund Trust v. Ream, 8 p3d 1182, 1186
(Ariz. Ct. App. 2000); p_fllton~. Meist.~, 239 N.W.2d 9, 14 (Wis. 1976); Restatement (Second)
of Conflict of Laws 55 (1971).
Just as this Court had authority to order Chesley to transfer his beneficial interest in
WSBC, it also has authority to enforce its Judgment by (1) ordering Chesley to direct that the
at
and (3) ordering Chesley, as the actual person controlling WSBC, to transfer all interest in
WSBC to a receiver who is also an attorney licensed in the state of Ohio.
II.
corporate entity when that entity is an alter ego or instrumentality in Inter"Tel Technologi~.,Inc.
v. Linn Station Properties, LLC, 360 S.W.3d 152 (Ky. 2012). In that case, the Court said that a
trial court may disregard the corporate entity when there is "(1) domination of the corporation
resulting in a loss of corporate separateness and (2) circumstances under which continued
recognition of the corporation would sanction fraud or promote injustice." rd. at 165 (emphasis
in original).
Chesley is clearly operating without regard to the supposed purpose of the Wind-Up
Agreement and WSBC's corporate existence.
remains its sole director. He transferred his shares to a trustee in name solely because he was
permanently disbarred Kentucky and then "retired" his Ohio license before he could be disbarred
there. However, he is still acting as though he is the sole shareholder of WSBC with complete
right to direct its activities.
Similarly, the promoting injustice prong is satisfied by showing '''an intentional scheme
to squirrel assets into liability-free corporations while heaping liabilities upon an asset-free
corporation."
(ih
Id. at 168 (quoting Sea-Land Services, Inc. v. Pepper Source, 941 F.2d 519,524
Cir. 1991.
Nevertheless, he intentionally
There could be no
clearer example of "squirrelling] assets" and "heaping liabilities." This is far more than a "mere
inability" to collect on the Judgment, This is another scheme by Chesley to cheat Plaintiffs and
do them another injustice
Due to Chesley's disregard of the corporate separateness of WSBC and his intentional
use of it to put his assets out of the reach of Plaintiffs in order to deprive them of the ability to
execute on their Judgment, this COlU'tshould disregard the nominal corporate existence of
WSBC in granting the relief requested by this Motion.
CONCLUSION
For the foregoing reasons, Plaintiffs respectfully request that this COUligrant their motion
and execute on their Judgment on Defendant Chesley's property as described herein.
Respectfully submitted,
,~_
~"f?k./ __
Angel
, Ford
~KBA No, 81510
Chevy Chase Plaza
836 Euclid Avenue, Suite 311
Lexington, Kentucky 40502
(859) 268 2923
Email: amford@windstream.net
w
William T. Ramsey
CERTIFICATE OF SERVICE
The undersigned hereby certifies that a true and correct copy of the foregoing was served
via electronic and U.S. Mail this the 2nd day of September, 2015, to the following:
Frank Benton, IV, Esq.
P.O. Box 72218
Newport, KY 41072
Mary E. Meade-Mckenzie, Esq.
105 Seahawk Drive
Midway, KY 40347
Mitzy L. Evans
Evans Law Office
177 SOuthMain Street
P.O. Box 608
Versailles, KY 40383
Luther C. Conner, n., Esq.
103 Cross Street
Albany, KY 42602
Sheryl G. Snyder, Esq.
Griffin Terry Sumner, Esq.
Frost Brown Todd LLC
400 West Market St., 32J1d Floor
Louisville, KY 40202
Michael R. Dowling, Esq.
P.O. Box 1689
Ashland, KY 41105~1689
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~FOR
PLAINTIFFS
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