RENDERED: MARCH 27, 2015; 10:00 A.M. NOT TO BE PUBLISHED Commonwealth of Kentucky Court of Appeals NO. 2013-CA-002087-MR NIKOLAY D. DIMITROV; AND DIMITROV, INC. APPELLANTS APPEAL FROM JEFFERSON CIRCUIT COURT v. HONORABLE OLU A. STEVENS, JUDGE ACTION NO. 12-CI-402943 PBI BANK, INC. APPELLEE OPINION AFFIRMING ** ** ** ** ** BEFORE: COMBS, D. LAMBERT, AND VANMETER, JUDGES. VANMETER, JUDGE: Nikolay D. Dimitrov and Dimitrov, Inc. (referred to collectively as Dimitrov ) appeal from the Jefferson Circuit Court s order granting PBI Bank, Inc. ( PBI ) summary judgment and ordering sale of Dimitrov s mortgaged properties. For the following reasons, we affirm.
Between October 16, 2007 and November 21, 2008, Dimitrov signed six commercial loan promissory notes with PBI. In September 2009, Dimitrov filed Chapter 7 bankruptcy. On November 18, 2009, Dimitrov reaffirmed his six loans with PBI and signed Change in Terms Agreements for each of the loans. Pursuant to those Agreements, payments were deferred until February 2010, at which time the interest rate was lowered to 4.5% fixed for the first six months, during which interest-only monthly payments would be the only payments due. In August 2010, the interest rate was to increase to 6% fixed and payments would convert from interest-only monthly payments to principal and interest monthly payments. Each Change in Terms Agreement provided for specific monthly amounts that would be due for each of the principal plus interest payments due after August 2010. In August 2010, the rate change from 4.5% to 6% did not occur. PBI realized its own mistake in February 2011, and informed Dimitrov. Dimitrov denies receiving any written notices or communications regarding the payment increase until September 2011, but PBI claims it informed Dimitrov of the mistake and payment increase in March 2011. Subsequently, Dimitrov fell behind in his payments. Dimitrov claims that PBI refused to give him a breakdown of the alleged deficiencies with his accounts despite multiple emails between Dimitrov and PBI loan officers listing the amounts due on each account. Regardless, the Change in Terms Agreements set forth specific monthly payment amounts due for each loan after August 2010 and laid out the late fee policy and amortization -2-
schedule, so Dimitrov was aware of what amounts were due. Dimitrov continued to default on his loans. In June 2012, Dimitrov requested extra time to try to move his loans to another bank. The record shows no evidence that PBI or its agents ever agreed to give Dimitrov extra time to catch up with his payments. In July 2012, PBI accelerated the balances due and seized Dimitrov s six mortgaged properties, changing the locks and giving the tenants new keys. PBI filed a complaint seeking foreclosure on August 3, 2012. On September 18, 2013, the trial court granted PBI summary judgment in an interlocutory order, but referred the matter to the Master Commissioner for the purpose of reviewing the proposed judgment and order of sale, or for form only. The Master Commissioner agreed that granting summary judgment and ordering the mortgaged properties to be sold was appropriate. On November 19, 2013, the trial court entered a final order granting PBI summary judgment and ordering the properties to be sold. This appeal follows. CR 1 56.03 provides that summary judgment is appropriate when no genuine issue of material fact exists and the moving party is therefore entitled to judgment as a matter of law. Summary judgment may be granted when as a matter of law, it appears that it would be impossible for the respondent to produce evidence at the trial warranting a judgment in his favor and against the movant. Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 483 (Ky. 1991) (internal quotations omitted). Whether summary judgment is appropriate is a legal question involving 1 Kentucky Rules of Civil Procedure. -3-
no factual findings, so a trial court s grant of summary judgment is reviewed de novo. Coomer v. CSX Transp., Inc., 319 S.W.3d 366, 370-71 (Ky. 2010). Procedurally, PBI argues that Dimitrov s appeal must be dismissed for failure to include Louisville-Jefferson County Metro Government, Department of Codes and Regulations ( Metro Government ), as an indispensable party to this appeal in violation of CR 73.03. The Metro Government has an interest in one of the six subject properties because it has placed a civil penalty lien on the property. Dimitrov included Metro Government in the notice of appeal s caption, but did not name Metro Government in the body of the notice. First, we must decide whether Metro Government is in fact an indispensable party. Failure to name an indispensable party in the notice of appeal is a jurisdictional defect that cannot be remedied and thus requires dismissal. Browning v. Preece, 392 S.W.3d 388, 391 (Ky. 2013). The Kentucky Supreme Court stated the following with regard to indispensable parties on appeal: In determining whether a party is truly necessary on appeal, the court must ask who is necessary to pursue the claim. If a party s participation in the appeal is unnecessary to grant relief, and requiring its participation would force unnecessary expense on the party, then such a party is not indispensable. Id. Despite the fact that Dimitrov does not contest Metro Government s lien in this appeal, a reversal of the trial court s order could potentially affect Metro Government s rights to funds obtained from the sale of the property. Thus, we find that Metro Government is necessary to this appeal. However, we disagree with -4-
PBI s contention that Dimitrov failed to name Metro Government in the notice of appeal. Listing a party in the caption of a notice of appeal is enough to satisfy the notice requirement of CR 73.03, even if the party is not listed in the body of the notice. Id. at 392. Since Dimitrov listed Metro Government in the caption of the notice of appeal, he has not failed to join an indispensible party and we will proceed to address his arguments on appeal. 2 Dimitrov first argues that PBI breached its implied duty of good faith, and thus, summary judgment was improper. Dimitrov correctly notes that in every contract, an implied duty of good faith and fair dealing exists. Ranier v. Mt. Sterling Nat l Bank, 812 S.W.2d 154, 156 (Ky. 1991). He first alleges that PBI s failure to provide him with a statement showing how much each loan was in arrears constitutes a breach of good faith. We disagree. Regardless of the fact that PBI gave Dimitrov this information multiple times, Dimitrov should have been aware of how much he owed on the loans and how interest and late fees were calculated based upon the terms of the Change in Terms Agreements. One who signs a contract is presumed to know its contents, and if he has had an opportunity to read the contract he signed, he is bound by its provisions. Hathaway v. Eckerle, 336 S.W.3d 83, 89 (Ky. 2011). Further, both the original promissory notes and Change in Terms Agreements are clear that PBI is required to provide no notice 2 Dimitrov actually named Department of Codes and Regulations in the caption of the notice of appeal. While this entity does not exist, both parties seem to agree that this refers to Metro Government and Metro Government was included on the certificate of service, so they presumably had notice of this appeal. -5-
when a default occurs. PBI was free to accelerate the indebtedness and pursue foreclosure without notice of presentment or dishonor. Next, Dimitrov claims that PBI breached its duty of good faith by misleading him by promising that he would have until October 2012 to try to move his loans to another bank or work out a payment plan. However, Dimitrov has not pointed to any evidence in the record which indicates that PBI or any of its agents offered Dimitrov an extension. The only mention of this extension through October 2012 is in an email from Dimitrov to PBI s loan officer, Joe Varner, in which Dimitrov requests an extension. Dimitrov produces no reply to indicate that an extension would be granted. This one-sided proffer is obviously insufficient. Therefore, we find no breach of good faith by PBI. Lastly, Dimitrov claims that PBI s refusal to provide him with a payoff amount before foreclosing constitutes a breach of good faith and fair dealing. Again, we disagree. Dimitrov misconstrues the language of PBI s attorney, who he claims told him that PBI would not offer him a payoff amount. What PBI s attorney actually conveyed to Dimitrov was that PBI would not provide a reinstatement amount, which in context, clearly alludes to an amount Dimitrov could pay to get back on track with his payments. PBI elected to accelerate the debt long after Dimitrov first defaulted, which was permissible pursuant to the promissory notes that Dimitrov signed. Prior to the acceleration and subsequent foreclosure action, Dimitrov was given multiple opportunities to bring his accounts -6-
current, which he failed to do. Accordingly, we find no breach of good faith on behalf of PBI. For the foregoing reasons, the judgment and order of the Jefferson Circuit Court is affirmed. ALL CONCUR. BRIEF FOR APPELLANT: Robert W. DeWees III Louisville, Kentucky BRIEF FOR APPELLEE: Michael R. Gosnell Louisville, Kentucky -7-