The opinion of the court was delivered by: Leon Jordan United States District Judge
Now before the court is plaintiff's summary judgment motion as to defendant Malcolm E. Ratliff [doc. 47].*fn1 Also before the court is "Defendant Estate of Malcolm E. Ratliff's Motion to Strike all References to and any Reliance upon Forleo v. American Products of Kentucky, Inc., 2006 WL 2788429 (Ky [sic] Ct. App. Sept. 29, 2006), in Plaintiffs' [sic] Reply to Defendants [sic] Response in Opposition to Plaintiff's Motion for Summary Judgment" [doc. 57]. For the reasons that follow, plaintiff's motion will be granted and defendant's motion will be denied.
Standard Federal Rule of Civil Procedure 56(c) authorizes summary judgment when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." If the moving party carries its initial burden of showing that there are no genuine issues of material fact in dispute, the burden shifts to the non-moving party to present specific facts demonstrating a genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87. The court determines whether the evidence requires submission to a jury or whether one party must prevail as a matter of law because the issue is so one-sided. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).
The facts material to plaintiff's summary judgment motion are not in dispute.
Plaintiff and defendant Industrial Resources Corporation ("IRC") executed an October 2002 Amended Agreement ("the Agreement") pertaining to the purchase and sale of shares of Tengasco, Inc. common stock. Mr. Ratliff signed the Agreement as IRC's president. Plaintiff alleges that IRC breached the Agreement, resulting in damages of more than $600,000.00.
IRC is a Kentucky corporation which, as of the date of the Agreement's execution, had been administratively dissolved. IRC's corporate status was reinstated by the Kentucky Secretary of State on May 25, 2007.
Plaintiff argues that Mr. Ratliff's estate is liable for IRC's alleged breach, since Mr. Ratliff executed the Agreement on behalf of an administratively dissolved corporation. In response, Mrs. Ratliff contends that the estate cannot be liable due to the retroactive effect of IRC's recent reinstatement.
According to plaintiff, the Court of Appeals of Kentucky's opinion in Forleo v. American Products of Kentucky, Inc., No. 2005-CA-000196-MR, 2006 WL 2788429 (Ky. Ct. App. Sept. 29, 2006), is dispositive of the issue now before this court. Conversely, Mrs. Ratliff contends that Fairbanks Arctic Blind Co. v. Prather & Associates, 198 S.W.3d 143 (Ky. Ct. App. 2005), controls. Mrs. Ratliff further argues that Forleo, as unpublished authority, may not be considered by this court.
Fairbanks was a breach of contract action. Therein, it was the plaintiff who was, as of the date of the contract's execution, administratively dissolved. The defendants argued that the contract was null and void due to the dissolution, even though the plaintiff's corporate status had since been reinstated. Interpreting Kentucky's reinstatement statute, Ky. Rev. Stat. § 271B.14-220, the Fairbanks court stated that "[i]n good conscience the defendants, who are strangers to the dealings between plaintiff and the State, should not be allowed to take advantage of the plaintiff's default in paying its taxes to escape their own obligations to the plaintiff[.]" Fairbanks, 198 S.W.3d at 145 (citation and quotation omitted).
[W]e conclude ... that [the Kentucky legislature] intended for reinstatement to restore a corporation to the same position it would have occupied had it not been dissolved and that reinstatement validates any action taken by a corporation between the time it ...