Friday, July 29, 2016

Notes: KRS 514.070 Theft by failure to make required disposition of property.

 KRS 514.070(1) A person is guilty of theft by failure to make required disposition of property received when:
(a) He obtains property upon agreement or subject to a known legal obligation to make specified payment or other disposition whether from such property or its proceeds or from his own property to be reserved in equivalent amount; and
(b) He intentionally deals with the property as his own and fails to make the required payment or disposition.
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 Blanton v. Commonwealth 562 SW 2d 90 (Ky App, 1978) - New Trial

" . . . . the failure to pay claims for labor and material out of amounts received from the owner constitutes a misdemeanor under KRS 376.990(2) only if the contractor fails to pay sums which he knows to be due and owing. No criminal liability may be imposed for failure to pay an amount which is disputed in good faith by the contractor. Moreover, to commit the felony of theft by failure to make required disposition of property under KRS 514.070, a contractor must not only know that an amount is due and owing for labor and material, but he must also know that he has a legal obligation to make payment out of the proceeds received from the owner and must intentionally deal with proceeds as his own."
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Commonwealth v. Jeter 590 SW 2d 346 (Ky App, 1979)

["K.R.S. 514.070 does not proscribe the type of transaction whereby a seller accepts money for the purchase of merchandise and then refuses to deliver the property as promised."]
"The basic thrust of this statute [KRS 514.070] is to impose penal sanctions for such conduct as a retailer's failure to pay over to the state sales taxes which have been collected, a contractor's failure to make proper application of payments in satisfaction of materialmans' liens, an employer's failure to apply withheld employee's wages to a pension fund, or a bank employee's failure to properly credit funds deposited for the account of a customer. Brickey, Kentucky Criminal Law, § 14.08."
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Commonwealth v. Perry, 219 S.W.3d at 720 (Ky 2007)
"The sole issue in this certification of the law sought by the Commonwealth is whether the offense of Theft by Failure to Make Required Disposition of Property (KRS 514.070) covers a situation in which the victim gives money to the defendant with the agreement that the defendant will purchase merchandise from a third party source and give it to the victim, and then the defendant fails to purchase the item or return the money. We hold that it does."
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Taylor v. Commonwealth, 799 SW 2d 818 (Ky 1990) - Conviction affirmed
 In the context here presented, the only substantial difference between the elements of KRS 304.9-400 and those of KRS 514.070 is that conviction under the insurance code would lie if the agent converts the funds to his own use or illegally withholds them, whereas conviction under the penal code would properly ensue if he intentionally deals with the proceeds as his own and fails to make the required disposition. Taylor could be acquitted of theft and convicted of the lesser offense only if he had withheld the premiums but had not intentionally dealt with them as his own. Appellant's avowal of an intention and ability to pay, termed a denial of criminal intent, does not, even if believed, exculpate him under KRS 514.070.
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Butts v. Commonwealth, 581 SW 2d 565 (Ky 1979) - agent of a corporation is liable for crimes he commits for the benefit of corporation
Butts contends that his motions for directed verdicts of acquittal on these charges should have been granted because there was no evidence that he dealt with customers' property, which Sentry held under an obligation to repay, as his own. Rather, he maintains that he obtained the property as Sentry's agent and that he disposed of the property for the benefit of Sentry and not himself. We do not agree with this contention.

An agent of a corporation is liable for crimes he commits for the benefit of or in the name of a corporation "to the same extent as if the conduct were performed in his own name or behalf." KRS 502.060 (Emphasis added). The purpose of this section of the Penal Code is to prevent an individual from hiding behind a corporation to avoid criminal liability for his conduct. KRS 502.060 Commentary (1971). The evidence is uncontradicted that Sentry intentionally dealt with customers' property as its own. Butts was the agent of Sentry who executed these illegal conversions. By operation of statute Butts is responsible for converting the property.
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Tom Fox, J. D.
Southern Specialty Law Publishing Company
Louisville, Kentucky

A division of Accountable Kentucky Incorporated
a Kentucky Non-profit corporation
AccountableKY.org

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Notes: CR 36.01 and 37.03 - Rumpel v. Rumpel 438 SW 3d 354, (Ky 2014)

 The trial court found that Kaven violated CR 36.01. That rule permits one party to request another party to admit "the truth of any matters within the scope of Rule 26.02 [the rule defining what is discoverable]." Under the rule, the party receiving the request must, in a timely manner, either admit the matter asserted, deny it, or object to the request. The purpose of the rule is to streamline the litigation by eliminating from controversy factual matters that will not be disputed at trial. Thompson v. King Feed & Nutrition Service, Inc., 153 Wash.2d 447, 105 P.3d 378, 390 (2005) (discussing Washington's virtually identical rule); Dobos v. Ingersoll, 9 P.3d 1020, 1028 (Alaska 2000) (discussing Alaska's version of the rule).

Under CR 37.03, an improper failure to admit the matter asserted, if the requesting party thereafter proves the truth of it, authorizes the trial court, upon the requesting party's application, to order "the other party to pay him [the requesting party] the reasonable expenses incurred in making that proof, including reasonable attorney's fee."[2] CR 37.03 thus provides an exception to the American Rule against the shifting of fees. Because CR 36 and CR 37.03 apply to civil proceedings generally, the fee shifting they allow is potentially of far-reaching effect. Indeed, if under those rules a party could obtain a fee award merely by requesting prior to trial that a disputed fact be admitted and then, if the fact were denied, prevailing on the dispute at trial, prevailing parties would be routinely entitled to fee awards, and our approach to fee shifting would be turned on its head. Cf. Piney Meeting House Investments, Inc. v. Hart, 284 Va. 187, 726 S.E.2d 319 (2012) (disallowing under Virginia's version of CR 37 a request intended merely to subvert the American Rule).

That clearly is not the intent of the rules allowing for fee sanctions. See Bell, 423 S.W.3d at 742 (noting that rules allowing for fees as a sanction must be narrowly construed precisely to prevent this sort of subversion of the American Rule). On the contrary, CR 37.03 provides that, even if the requesting party proves the truth of a matter concerning which an admission was requested and denied, a fee sanction is not appropriate if

    (a) the request was held objectionable pursuant to Rule 36.01, or

    (b) the admission sought was of no substantial importance, or

    (c) the party failing to admit had reasonable ground to believe that he might prevail on the matter, or

    (d) there was other good reason for the failure to admit.

CR 37.03.

The rule does not require, in other words, that a party admit a genuinely disputed fact or risk having to pay fees should the fact-finder ultimately decide the dispute against him. Prevailing at trial, although necessary to invoke the rule, is not the sole issue. The main issue under the rule, rather, is whether the party denying a request for admission acted reasonably in believing that he might prevail, or had some other legitimate reason for making the denial. We review a trial court's grant or denial of discovery sanctions, including fee awards, for abuse of discretion, Turner v. Andrew, 413 S.W.3d 272 (Ky.2013), and we agree with Kaven that the trial court abused its discretion here by failing to consider whether Kaven's denials of Kathie's requests for admission were justified.
 Rumpel v. Rumpel 438 SW 3d 354, (Ky 2014)
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Tom Fox, J. D.
Southern Specialty Law Publishing Company
Louisville, Kentucky

A division of Accountable Kentucky Incorporated
a Kentucky Non-profit corporation
AccountableKY.org

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West Buechel: Bad joke bookkeeping

For a few months during the Spring of 2015, West Buechel's Clerk-Treasurer distributed generated "check registers," showing City checks, amounts and to whom paid, and she also distributed copies of the City's General Fund II bank account statements. If you know that check numbers and amounts are listed on the bank's monthly account statements, it is only natural to wonder, "How do the bank's numbers compare to Kim Richards' numbers?"

Not good. Officially, First Degree Meshuggeneh.



Bank
Check
Check No. Statement
Register




2002 $826.45
$266.32
2003 $607.58
$95.00
2004 $1,416.03
$17.72
2005 $81.78
$18.00
2006 $1,306.53
$23.32
2007 $1,375.57
$220.32
2008 $44.28
$148.47
2009 $66.34
$40.00
2010 $68.99
$45.36
2011 $5,295.20
$675.40
2012 $520.69
$30.00
2013 $183.28
$80.56
2014 $24.20
$313.39
2015 $313.39
$24.20
2016 $80.56
$183.28
2017 $30.00
$520.69
2018 $675.40
$5,295.20
2019 $45.36
$68.99
2020 $40.00
$66.34
2021 $148.47
$44.28
2022 $220.32
$1,375.57
2023 $23.32
$1,306.53
2024 $18.00
$81.78
2025 $17.72
$1,416.03
2026 $95.00
$607.58
2027 $266.32
$826.45
2028 $26.00
$10.00
2029 $10.00
$26.00

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Tom Fox, J. D.
Southern Specialty Law Publishing Company
Louisville, Kentucky

A division of Accountable Kentucky Incorporated
a Kentucky Non-profit corporation
AccountableKY.org

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Stakling the wild KRS 424.220 Financial Statement

 There is always a gap between the written law and the law that is actually put into play in practical day-to-day life. It helps to have actual examples. The more the better.

This is a start. What I lack by being slow, I try to make up for by being relentless. The following are recently completed KRS 424.220 Financial Statements from Meade County, Kentucky, for FY 2015-2016. Since FY 2015-16 just ended on June 30th, I mean recent when I say recent. The Meade County Treasurer, Tammy Weick, is clearly on top of her job.

This document is divided into five parts
  1. Statement of Assets 
  2. Statement of Receipts
  3. Statement of Revenues
  4. Statement of Appropriations
  5. Statement of Claims
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Tom Fox, J. D.
Southern Specialty Law Publishing Company
Louisville, Kentucky

A division of Accountable Kentucky Incorporated
a Kentucky Non-profit corporation
AccountableKY.org

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Thursday, July 28, 2016

Tort of fraudulent misrepresentation


Reposted from DelCotto Law Group: Kentucky Law: Elements of Fraud Claims By: Jamie L. Harris, Esq.

"Kentucky law . . .  recognizes the tort of fraudulent misrepresentation. In Kentucky, fraud by misrepresentation comprises six elements:
(1) the defendant must have made a material misrepresentation;
(2) that was false;
(3) that the defendant knew was false, or made with reckless disregard for its truth;
(4) that was intended to induce the plaintiff to act, based on the misrepresentation;
(5) that the plaintiff reasonably relied; and
(6) that caused the plaintiff injury.
Flegles, Inc. v. TruServ Corp., 289 S.W.3d 544, 549 (Ky. 2009). To be actionable, a misrepresentation. . . must relate to a past or present material fact. A mere statement of opinion or prediction may not be the basis of an action. This means . . . that forward-looking opinions about investment prospects or future sales performance . . . generally cannot be the basis for a fraud claim.” Ibid. Nor does “sales talk or puffing which is universal and an expected practice . . . amount to actionable misrepresentation. This is certainly true where the parties deal at arm’s length and have equal means of information.” McHargue v. Fayette Coal & Feed Co.,283 S.W.2d 170, 172 (Ky. 1955) (internal quotation marks omitted). A caveat to the necessary elements under either a fraud by omission claim or a fraudulent misrepresentation claim is that “mere silence does not constitute fraud where it relates to facts open to common observation or discoverable by the exercise of ordinary diligence, or where means of information are as accessible to one party as to the other.” Bryant v. Troutman, 287 S.W.2d 918, 920–921 (Ky.1956).
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Tom Fox, J. D.
Southern Specialty Law Publishing Company
Louisville, Kentucky

A division of Accountable Kentucky Incorporated
a Kentucky Non-profit corporation
AccountableKY.org

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This is not legal advice and I am not a lawyer.