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Spurlock v. Begley

308 S.W.3d 657 (2010)

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Spurlock v. Begley

Kentucky Supreme Court

308 S.W.3d 657 (2010)

Facts

Robert Griffin formed Caribou Mining Processing, LLC (Caribou). The company owned and operated a structure for loading coal into railroad cars. Tate Begley (plaintiff) loaned $75,000 to Caribou in exchange for a promissory note at Griffin’s request. The loan was never repaid. Ben Spurlock (defendant) was an owner of a mining company. Spurlock and Griffin exchanged 25 percent ownership interests in each other’s companies. Sometime after the due date on the promissory note passed, Begley, Spurlock, and Griffin all met and allegedly agreed that Begley would be given a 25 percent ownership interest in Caribou to cancel the $75,000 debt Caribou owed to Begley. The agreement was never memorialized in writing. Later, Spurlock attempted to purchase Begley’s ownership interest in Caribou. The two men signed and notarized an agreement regarding the transaction, and Spurlock paid $5,000 as a down payment. It is unclear whether Spurlock purchased the promissory note or an actual 25 percent interest in Caribou. When Spurlock informed Griffin that Spurlock had purchased Begley’s 25 percent interest, Griffin denied that Begley ever possessed an ownership interest in Caribou, admitting only that Begley held a promissory note. Spurlock then told Begley that he would not pay him any money pursuant to their agreement. Begley filed suit, seeking a judgment on the note and the agreement with Spurlock. Spurlock made a counterclaim for his down payment. After a trial, the jury found in favor of Begley. Spurlock appealed to the Kentucky Supreme Court.

Rule of Law

Issue

Holding and Reasoning (Cunningham, J.)

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