David Barnes & Matthew Londergan Obtain Dismissal of Indemnity Claim – 2020

David Barnes and Matthew Londergan recently obtained dismissal of a claim for indemnity and of negligent misrepresentation for their client, a property developer.  The action against Mr. Barnes and Mr. Londergan’s client originated as a Third-Party Complaint brought by another property developer, which had purchased a parcel of property from the client.  That developer subsequently conveyed the property to a residential purchaser, who discovered that the property had issues which substantially negated its value.  The residential purchaser proceeded to arbitration, and received an award against this developer, which included a finding that the developer had fraudulently withheld the condition of the property prior to sale.  This arbitration award was confirmed by the circuit court, and then affirmed by the Kentucky Court of Appeals.

The residential purchaser subsequently initiated a separate action against the property developer pursuant to the Kentucky Uniform Voidable Transactions Act, alleging that the developer was hiding its assets to avoid paying the prior judgment.  In this action, the developer filed a Third-Party Complaint against Mr. Barnes and Mr. Londergan’s client, seeking indemnity for the previous judgment and alleging that the client had negligently withheld the condition of the property prior to its conveyance to the developer.  Mr. Barnes and Mr. Londergan filed a Motion for Judgment on the Pleadings, arguing that their client was not a proper Third-Party Defendant pursuant to CR 14.01, that the developer was barred by collateral estoppel from asserting claims that were contrary to the prior judgment, and that indemnity is unavailable for judgments premised upon fraud or intentional conduct. After a substantial period of briefing and oral argument, the trial court entered an Order Granting Judgment on the Pleadings, specifically noting that it “adopts as its own the well-reasoned analysis presented [by client] in its briefs.”