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KRS 31A.010 Master commissioners.

(1) A master commissioner may be appointed for each county within a judicial circuit.

(a) In single-judge circuits the appointment shall be made by the Circuit Judge.

(b) In judicial circuits with more than one (1) judge the master commissioner shall be chosen by a majority of the judges and in the event of a tie the Chief Circuit Judge shall choose from those receiving the tie vote.

(2) The master commissioner shall be governed by such rules not inconsistent with the statutes of the Commonwealth as may be set by the Supreme Court.

(3) The master commissioner shall serve at the pleasure of the court as follows:

(a) In a single-judge circuit the master commissioner shall serve at the pleasure of the Circuit Judge, but in no case shall his term exceed four (4) years without reappointment. The term of the commissioner shall automatically terminate following the death, resignation, or permanent replacement of the Circuit Judge who appointed him.

(b) In a judicial circuit with more than one (1) judge the master commissioner shall serve at the pleasure of the judges of the circuit, but in no case shall his term exceed four (4) years without reappointment. The master commissioner may be removed at any time by a majority vote of the judges of the circuit and in the event of a tie the decision shall be made by the Chief Circuit Judge.

(4) Each commissioner shall annually provide to the Administrative Office of the Courts a complete accounting for all amounts received and distributed and for all fees collected. The master commissioner shall be compensated by fees as provided by rule of the Supreme Court. Fees collected in excess of the authorized compensation and expenses of the master commissioner shall be remitted with the report to the Administrative Office of the Courts to inure to a trust and agency account which shall not lapse and which shall be used to hire additional deputy clerks or office personnel, to increase deputy clerk or office personnel salaries, or a combination thereof. The Circuit Court may allow the commissioner a reasonable fee for performing judicial type functions in actions where the master commissioner does not execute a judicial sale.

(5) The master commissioner shall maintain his office at such locations and during such hours as authorized by rule of the Supreme Court.

(6) The master commissioner shall perform such functions, including those of a receiver, as may be directed by an appropriate order of court.

(7) The master commissioner may have such deputies and assistants, as authorized by rule of the Supreme Court, as are necessary to perform the functions of his office.

(8) The Supreme Court may make such rules, regulations, and accounting procedures as it may deem necessary for the appointment, conduct, and other matters relating to the master commissioner or receiver.

Effective: March 20, 2005

History: Amended 2005 Ky. Acts ch. 173, Pt. XIII, 1.(2), sec. 1, effective March 20, 2005. — Amended 1982 Ky. Acts ch. 222, sec. 1, effective July 15, 1982. — Created 1976 (1st Extra. Sess.) Ky. Acts ch. 22, sec. 48, effective January 2, 1978. 2008-2010 Budget Reference. See Judicial Branch Budget, 2008 Ky. Acts ch. 128, Pt. III, 11, at 616; and Judicial Branch Budget Memorandum, 2008 Ky. Acts ch. 190, at 1985 (Final Budget Memorandum, at X-28).

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KRS 31A.020 Bond — Special bond.

The master commissioner shall execute a bond, with surety approved by the court. The bond shall be recorded in court. He shall execute a special bond when required by the court and no action shall be maintained on his general bond for matters covered by a special bond.

Effective: January 2, 1978

History: Created 1976 (1st Extra. Sess.) Ky. Acts ch. 22, sec. 49, effective January 2, 1978.

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KRS 31A.030 Oath.

The master commissioner shall take an oath that he will faithfully and honestly discharge the duties of his office.

Effective: January 2, 1978

History: Created 1976 (1st Extra. Sess.) Ky. Acts ch. 22, sec. 50, effective January 2, 1978.

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KRS 31A.040 Special commissioner.

(1) When the master commissioner is interested as an attorney or party; or

(2) When there is other conflict of interest; or

(3) When he is otherwise unable to discharge the duties of his office for any reason; the judge of the court before whom the action is pending shall appoint a special commissioner, who shall meet the same qualifications as a master commissioner, and require him to take an oath and execute a bond as the regular commissioner is required to do.

Effective: January 2, 1978

History: Created 1976 (1st Extra. Sess.) Ky. Acts ch. 22, sec. 51, effective January 2, 1978.

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KRS 31A.080 Receivers — Persons not to be appointed receivers.

(1) Receivers, except as provided in subsection (2) of this section, may be appointed under the same terms and conditions as a master commissioner.

(2) Except for personal representatives, guardians, curators and committees for persons of unsound mind, neither a party to an action, nor his attorney, nor any person interested therein, shall be appointed as a receiver unless by agreement of the parties.

Effective: January 2, 1978

History: Created 1976 (1st Extra. Sess.) Ky. Acts ch. 22, sec. 52, effective January 2, 1978.

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KRS 31A.120 Use of proof of and performance of duties of predecessor.

The master commissioner or receiver may use any proof reduced to writing and signed by his predecessor, and may execute any order or judgment which it was the duty of his predecessor to have executed, and which remains unexecuted.

Effective: January 2, 1978

History: Created 1976 (1st Extra. Sess.) Ky. Acts ch. 22, sec. 53, effective January 2, 1978.

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KRS 31A.990 Penalties.

(1) If any master commissioner or receiver fails to comply with his duties as defined by appropriate court order, he shall be guilty of a violation, and, upon conviction, shall be removed from office.

(2) If any master commissioner or receiver knowingly omits or fails to report, as required by court order or Supreme Court rule, a correct statement of the amount required to be reported, or the amount of his office expenses, or knowingly makes or subscribes any false statement concerning the same, he shall be guilty of a Class D felony, and the judgment of conviction shall declare the office vacant.

Effective: July 14, 1992

History: Amended 1992 Ky. Acts ch. 463, sec. 3, effective July 14, 1992. — Created 1978 Ky. Acts ch. 384, sec. 8, effective June 17, 1978.

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KRS 426.005 Personal judgment in action to enforce mortgage or lien — When mortgage may be enforced.

(1) In an action to enforce a mortgage or lien, judgment may be rendered for the sale of the property and for the recovery of the debt against the defendant personally.

(2) In an action to enforce a mortgage or other lien, a sale of the property may be ordered without giving time to pay money or do other act.

Effective: July 1, 1953

History: Transferred 1952 Ky. Acts ch. 84, sec. 1, effective July 1, 1953, from C.C. secs. 374, 376.

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KRS 426.006 Other liens to be stated in action to enforce lien — Cross claim.

The plaintiff in an action for enforcing a lien on property shall state in his petition the liens held thereon by others, making them defendants; and may ask for and obtain a judgment for a sale of the property to satisfy all of said liens which are shown to exist, though the defendants fail to assert their claims. Such defendants shall not, however, be allowed to withdraw or receive any of the proceeds of such sale, until they have shown their right thereto by answer and cross claim, which shall be asserted as provided in the Rules of Civil Procedure.

Effective: July 1, 1953

History: Transferred 1952 Ky. Acts ch. 84, secs. 1 and 27, effective July 1, 1953, from C.C. sec. 692.

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KRS 426.010 Execution against property may issue on personal judgment.

If a final judgment in personam is rendered in any court of record in this state for an ascertained sum of money, with interest and cost, or for either, an execution against property may issue thereon.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 1650.

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KRS 426.020 Form of execution against property.

The form of an execution against property, varied to suit the particular case, may be in substance as follows: “The Commonwealth of Kentucky, to the sheriff of …. County, greeting: We command you that of the estate of A B, you cause to be made the sum of $…. which C D late in our …. court hath recovered against him for debt, with interest thereon from the …. day of …. until paid; also the sum of $…. which to the said C D in the same court was adjudged for his costs in that suit expended, whereof he is convicted as appears to us of record, and that you have the said sums of money before our court on the …. day of …., to render to the said C D his debt, interest and costs aforesaid and have then there this writ. Witness.”

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 1651.

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KRS 426.200 Sale of land — Place of — Advertisement — Appraisement.

(1) Land shall be sold under execution to the highest bidder at the courthouse door of the county in which it lies. Only so much land shall be sold as will satisfy the execution under which the sale is made.

(2) The officer making the sale shall first advertise the time and place of sale by written notice describing the land to be sold, posted at the courthouse door and three other places in the vicinity of the land for fifteen days next preceding the sale, or by newspaper notice if required by KRS 426.560.

(3) Before a sale of land, the officer shall have the land appraised, under oath, by two disinterested, intelligent housekeepers of the county, who may be sworn by him. If the appraisers disagree, the officer shall act as umpire. If a part of a tract only is sold, the part sold shall, after the sale, be revalued in like manner. The appraisal shall be in writing, signed by the persons making it, and returned with the execution. The officer shall refer to and explain the proceeding in his return on the execution, which return shall be recorded in full.

Effective: January 2, 1978

History: Amended 1976 (1st Extra. Sess.) Ky. Acts ch. 14, sec. 428, effective January 2, 1978. — Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 1682.

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KRS 426.220 Redemption — Right of — Payment of money — Possession of defendant.

(1) If land sold under execution does not bring two-thirds of its appraised value, the defendant and his representatives may redeem it within a year from the day of sale, by paying the purchaser or his representative the original purchase money and ten percent per annum interest thereon. The defendant redeeming his land shall take a receipt from the purchaser and lodge it with the clerk of the court, which receipt shall be filed and recorded with the execution under which the sale was made.

(2) The defendant may tender the redemption money to the purchaser or his agent or attorney, if in the county where the land lies or in the county where the judgment was obtained, and if the money is refused or if the purchaser does not reside in either of the counties, the defendant may, before the expiration of the year, go to the clerk of the court where the execution issued and make affidavit of the tender and refusal or that the purchaser or his agent or attorney does not reside in the county where the land lies or where the execution issued, as he believes. He may then pay to the clerk the redemption money for the purchaser, and the clerk shall give a receipt therefor and file the affidavit with the execution in his office.

(3) When the right of redemption exists, the defendant may remain in possession until the right of redemption expires.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 1684.

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KRS 426.230 Conveyance of land subject to redemption.

Land sold under execution which is subject to redemption shall not be conveyed by the officer making the sale until the expiration of one year from the sale, nor shall he convey after that period if the land has been redeemed or an affidavit made and the money deposited with the clerk as provided in KRS 426.220, unless by court order or with the written assent of the defendant in the execution.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 1685.

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KRS 426.240 Redemption right may be sold — Rights of defendant and purchaser.

The right of redemption may be sold under execution. The land shall still be subject to redemption by the defendant, from both purchasers, for one year from the first sale. The purchaser of the right of redemption may, before the end of a year from the first sale, pay the prior purchaser his money and interest as provided in KRS 426.220, and be entitled to the land, subject to the rights of possession and redemption held by the defendant in the execution.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 1686.

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KRS 426.290 Sale of encumbered property under execution — Rights of purchaser, creditor — Redemption — Bond of purchaser of personalty — Control of courts.

(1) If the defendant in an execution owns the legal title to any real or personal property on which a bona fide encumbrance created prior to the execution lien exists, the interest of the defendant in the property may be levied on and sold, subject to the encumbrance.

(2) The purchaser at the sale shall acquire a lien on such property for the purchase money, and interest at the rate of ten percent per annum from the day of sale until paid, subject to any prior encumbrance.

(3) Any other creditor, whether by judgment or otherwise, may, after such execution and sale, by equitable proceedings, subject the encumbered property to sale, and, after satisfying prior liens, have his demand satisfied out of the proceeds of the residue. The proceedings in equity shall be instituted before the purchaser has, by suit, enforced the lien provided for in subsection (2) of this section.

(4) The defendant in the execution may redeem the property sold by paying the original encumbrance, with legal interest thereon, and by paying the purchaser his purchase money, with ten percent per annum interest thereon.

(5) The purchaser of encumbered movable property shall, before possession is delivered to him, give an obligation with good surety payable to the encumbrancer and the owner, stipulating that the property shall not be removed out of the county and shall be preserved and forthcoming, unavoidable accidents excepted, to answer the encumbrance, and for redemption, and deliver the obligation to the officer to be returned with the execution.

(6) Courts of equity shall have control of all encumbered property sold under execution, and may make all needful orders for the preservation and forthcoming of the property and its issues and profits, to satisfy the encumbrance and to secure the rights of others.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 1709.

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KRS 426.320 Sales invalid if made by fraud or collusion — Proceedings to set aside — When lien not affected.

(1) Sales made under execution by fraud or collusion may be set aside, in the court where the execution issued, on the motion of any person aggrieved or by petition in equity. If by motion, the proceeding must be commenced within one year from the sale. The parties affected by the motion shall have ten days’ notice in writing, setting forth the grounds relied on for invalidating the sale.

(2) Whenever a sale under execution is quashed, vacated or set aside, for any cause not affecting the validity of the execution, the lien created by the execution or the levy shall not be destroyed or affected but shall remain in full force and effect, and a writ as provided in KRS 426.440 may be issued and the property sold.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 1710.

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KRS 426.330 Purchase by officer at sale made by him void.

No officer shall, directly or indirectly, bid for or buy any property sold under an execution by him or his deputy, principal or codeputy. The right of property so sold and purchased by any such officer, or by another for his use, shall not thereby be changed. Any deed or bill of sale made for property so sold shall be void.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 1711.

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KRS 426.490 Sale bond — Where no replevin and sale made on three months’ time — Form.

(1) If the right to replevy exists and is not exercised, sales under execution shall be on a credit of three (3) months, upon the purchaser giving bond with good surety to the plaintiff in execution for the payment of the sale money, bearing interest from date.

(2) The bond shall be in substance as follows: “We, A B, principal, and C D, surety, do bind ourselves to pay to E F, within three (3) months from the date hereof, the sum of $ …., with interest thereon from this date, being the purchase money for (here set out the several items of the property so purchased, with the price of each) which was this day sold by G H, sheriff (or constable and so forth, as the case may be), of …. County, in satisfaction of an execution which issued from the office of the clerk of the …. court on the …. day of …., in favor of E F against M O, for the sum of $ …., debt of damages, with interest and costs. Given under our hands this …. day of …. 19…”

Effective: January 2, 1978

History: Amended 1976 (1st Extra. Sess.) Ky. Acts ch. 14, sec. 432, effective January 2, 1978. — Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 1674.

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KRS 426.500 Surplus proceeds of sale — Disposition.

(1) If the property sold on credit sells for more than necessary to satisfy the execution, costs and commission, the officer making the sale shall take a bond payable to the defendant, the owner of the property, but otherwise similar to and having like force and effect as that provided for in KRS 426.490, for the excess.

(2) If the property is sold for cash, any excess after satisfying the execution, charges and commissions shall be paid over by the officer to the defendant whose property is sold.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 1675.

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KRS 426.520 Appraisal of real property before judicial sale.

(1) Before any real property is to be sold under an order or judgment of a court, other than an execution, the commissioner or other officer selling the property shall have it appraised, under oath, by two (2) disinterested, intelligent housekeepers of the county, who may be sworn by the officer. If they disagree, the officer shall act as umpire. If only a part of a tract of land is sold, the part sold shall, after the sale, be revalued in like manner.

(2) The appraisal made shall be in writing, signed by the persons making it, and returned by the commissioner or officer to the court which made the order or rendered the judgment for the sale of the property. The appraisal shall be filed among the papers of the cause in which the judgment was rendered or the order made, and entered on the records of the court.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 2362, 2363.

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KRS 426.525 Mortgage foreclosure forbidden — Rights of mortgagee after default.

Foreclosure of a mortgage is forbidden; provided, however, that this section shall not preclude a mortgagee after default from taking possession of property subject to the mortgage which has been abandoned by the mortgagor, for the purpose of preserving and maintaining the same, harvesting crops, or letting the same, all to the account of the mortgagor; and any reasonable expenses incident thereto including taxes and insurance shall be added to the principal of the mortgage, and secured by it. For the purpose of this section, property shall be deemed to have been abandoned when the mortgagor has moved from the property and when by the nature of the property in question when further neglect or failure to attend will decrease its value. Any right a mortgagee acquires in a tenant’s interest in crops raised on shares is inferior to any prior existing lien of the landlord on the tenant’s interest. Nothing in this section shall be construed as conflicting with the provisions of KRS 383.110.

History: Amended 1972 Ky. Acts ch. 90, sec. 1. — Transferred 1952 Ky. Acts ch. 84, sec. 1, effective July 1, 1953, from C.C. sec. 375.

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KRS 426.530 Right of redemption — Manner of redeeming — Purchaser to receive writ of possession and deed.

(1) If real property sold in pursuance of a judgment or order of a court, other than an execution, does not bring two-thirds (2/3) of its appraised value, the defendant and his representatives may redeem it within a year from the day of sale, by paying the original purchase money and ten percent (10%) per annum interest thereon.

(2) The defendant shall pay the redemption money to the clerk of the court in which the judgment was rendered or the order of sale was made. Upon payment by the defendant, the master commissioner shall convey the real property to the defendant.

(3) When the right of redemption exists, the purchaser shall receive an immediate writ of possession and a deed containing a lien in favor of the defendant, reflecting the defendant’s right to redeem during the statutory period.

Effective: July 15, 1982

History: Amended 1982 Ky. Acts ch. 216, sec. 1, effective July 15, 1982. — Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 2364.

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426.540 Redemption right may be sold — Rights of purchaser and debtor — Report of sale.

If the proceeds of sale fail to satisfy the judgment, the right of redemption provided for in KRS 426.530 may be sold to satisfy the residue of the judgment. The right of redemption shall also be liable to sale under execution. The land shall be subject to redemption from both purchasers for one (1) year from the first sale. The purchaser of the right of redemption may, before the end of a year from the first sale, pay the prior purchaser his purchase money and interest as provided in KRS 426.530, and shall then be entitled to the land, subject to the rights of possession and redemption held by the defendant in the execution. A sale made in pursuance of any such judgment or order shall be reported to the court by the commissioner or officer who made the sale, and the report shall state at what sum the property sold was appraised. If the report is not excepted to, the sale may be confirmed, but if the land is redeemed the confirmation shall thereafter be null and void.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 2365.

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426.550 Death of party after sale under court order — Revivor not necessary.

If, by the judgment of any court of this state, real property is sold and any party to the action dies after the sale is confirmed, or, if the court orders any conveyance of real property by a commissioner and a party to the proceedings dies before the conveyance is perfected, it shall not be necessary on that account to revive the action, but the sale or conveyance when perfected shall pass title to the same extent as if all the parties were living.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 521.

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426.560 Newspaper advertisement required in execution and judicial sales.

In addition to the notices now required by statute to be posted, all public sales of any kind of property sold under execution, judgment or decree, shall, unless otherwise agreed upon by the parties, be advertised by publication pursuant to KRS Chapter 424. The advertisement shall state the time, place and terms of sale and describe the property to be sold. The newspaper advertisement shall not be necessary where the appraised value of the property to be sold is less than one hundred dollars ($100).

History: Amended 1966 Ky. Acts ch. 239, sec. 229. — Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 14a-1.

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426.570 Conveyances to be made by commissioner — Deed of partition.

Unless otherwise specially ordered by the court, the master commissioner of a Circuit Court shall make all conveyances of real property that are authorized by law to be made by a commissioner of the Circuit Court. In the partition of land, there shall be but one (1) deed, unless otherwise ordered by the court.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 406.

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426.572 Requisites of commissioner’s deed.

The deed of the commissioner shall refer to the judgment, orders and proceedings, authorizing the conveyance, so that the same may be readily found.

Effective: July 1, 1953

History: Transferred 1952 Ky. Acts ch. 84, sec. 1, effective July 1, 1953, from C.C. sec. 395.

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426.573 Title passed by deed made pursuant to judgment.

A conveyance made in pursuance of a judgment shall pass to the grantee the title of the parties ordered to convey the land.

Effective: July 1, 1953

History: Transferred 1952 Ky. Acts ch. 84, sec. 1, effective July 1, 1953, from C.C. sec. 396.

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426.574 Title passed by deed made pursuant to order of sale.

A conveyance made in pursuance of a sale ordered by the court shall pass to the grantee the title of all the parties to the action or proceeding.

Effective: July 1, 1953

History: Transferred 1952 Ky. Acts ch. 84, sec. 1, effective July 1, 1953, from C.C. sec. 397.

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426.575 Court to examine and approve deed.

A conveyance by a commissioner shall not pass any right, until it has been examined and approved by the court; which approval shall be indorsed on the conveyance, and recorded with it.

Effective: July 1, 1953

History: Transferred 1952 Ky. Acts ch. 84, sec. 1, effective July 1, 1953, from C.C. sec. 398.

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426.576 Commissioner to sign — Names of parties to be stated.

It shall be necessary for the conveyance to be signed by the commissioner only, without affixing the names of the parties whose title is conveyed; but the names of such parties shall be recited in the conveyance.

Effective: July 1, 1953

History: Transferred 1952 Ky. Acts ch. 84, sec. 1, effective July 1, 1953, from C.C. sec. 399.

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426.577 Where deed to be recorded.

The conveyance shall be recorded where, by law it should have been recorded, had it been made by the parties whose title is conveyed by it.

Effective: July 1, 1953

History: Transferred 1952 Ky. Acts ch. 84, sec. 1, effective July 1, 1953, from C.C. sec. 400.

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426.685 Provisions governing sales by court order of indivisible real property.

(1) Before ordering a sale of real property for the payment of debt, the court must be satisfied by the pleadings, by an agreement of the parties, by affidavits filed, or by a report of a commissioner or commissioners, whether or not the property can be divided without materially impairing its value, and may cause it to be divided, with suitable avenues, streets, lanes or alleys, or without any of them.

(2) If it be necessary to sell, for the payment of debt, a parcel of real property which can not be divided without materially impairing its value, the officer shall sell the whole of it, though it bring more than the sum to be raised, and the court shall make proper orders for the distribution of the proceeds.

Effective: July 1, 1953

History: Transferred 1952 Ky. Acts ch. 84, sec. 1, effective July 1, 1953, from C.C. sec. 694(1) and (2). — C.C. sec. 694 amended 1916 Ky. Acts ch. 105, sec. 1.

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426.690 Procedure in action to enforce lien where other liens exist against real property.

The plaintiff in an action to enforce a lien on real property shall state in his petition the liens, if any, which are held thereon by others, and make the holders defendants; and no sale of the property shall be ordered by the court prejudicial to the rights of the holders of any of the liens, and when it appears from the petition or otherwise, that several debts are secured by one (1) lien, or by liens of equal rank, and they are all due at the commencement of the action, or become so before judgment, the court shall order the sale for the pro rata satisfaction of all of them, but if, in such case, the debts be owned by different persons and be not all due, the court shall not order a sale of the property until they all mature. If all such liens be held by the same party, the court may order a sale of enough of the property to pay the debts then due, unless it appear that it is not susceptible of advantageous division, or that, for some other reason, the sale would cause a sacrifice thereof, or seriously prejudice the interests of the defendants, but the holder of a prior lien may enforce the same when the debt thereby secured is due, notwithstanding the existence of inferior liens, whether the debts secured thereby are due or not; and the holder of an inferior lien, when the debt thereby secured is due, may enforce the same by a sale of land subject to a prior lien or liens thereon, where the debt or debts secured thereby are not yet due. Provided, that the provisions of this section shall not apply to any liens now of record.

Effective: July 1, 1953

History: Transferred 1952 Ky. Acts ch. 84, sec. 1, effective July 1, 1953, from C.C. sec. 694(3). — C.C. sec. 694 amended 1916 Ky. Acts ch. 105, sec. 1.

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426.700 Time, place and terms of sale — Notice.

Every sale made under an order of court must be public, either for cash or upon reasonable credits to be fixed by the court; and shall be made after such notice of the time, place and terms of sale as the order may direct; and, unless the order direct otherwise, shall be made at the door of the courthouse of the county in which the property, or the greater part thereof, may be situated; and the notice of sale must state for what sum of money it is to be made.

History: Amended 1970 Ky. Acts ch. 178, sec. 1. — Transferred 1952 Ky. Acts ch. 84, sec. 1, effective July 1, 1953, from C.C. sec. 696.

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426.705 Bond required of purchaser.

(1) The purchaser of property sold under an order of court shall give bond for the price, with good surety, approved by the officer making the sale, payable to him or to the person entitled to receive the money, as the court may direct; or, if the court make no order on the subject, they shall be made payable to the officer.

(2) They shall bear interest from date at the rate the judgment bears.

(3) They shall have the force of judgments; and on executions issued upon them no replevy shall be allowed, and sales shall be for cash.

Effective: July 1, 1953

History: Transferred 1952 Ky. Acts ch. 84, sec. 1, effective July 1, 1953, from C.C. sec. 697.

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426.715 Lien on realty as security for purchase money — Release.

A lien shall exist on real property sold under an order of court, as security for the purchase money; and, upon payment thereof the clerk shall release the lien on the margin of the record of the deed in the office of the county clerk, or at the option of the county clerk, in a marginal entry record kept for the same purpose. Each entry in the marginal entry record shall be linked to its respective referenced instrument in the indexing system for the referenced instrument.

Effective: July 15, 1982

History: Amended 1982 Ky. Acts ch. 323, sec. 5, effective July 15, 1982. — Amended 1978 Ky. Acts ch. 384, sec. 529, effective June 17, 1978. — Transferred 1952 Ky. Acts ch. 84, sec. 1, effective July 1, 1953, from C.C. sec. 699.

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426.720 Final judgment to act as lien on realty — Judgment creditor’s notice requirements.

A final judgment for the recovery of money or costs in the courts of record in this Commonwealth, whether state or federal, shall act as a lien upon all real estate in which the judgment debtor has any ownership interest, in any county in which the following first shall be done:

(1) The judgment creditor or his counsel shall file with the county clerk of any county a notice of judgment lien containing the court of record entering the judgment, the civil action number of the suit in which the judgment was entered, and the amount of the judgment, including principal, interest rate, court costs, and any attorney fees;

(2) The county clerk shall enter the notice in the lis pendens records in that office, and shall so note the entry upon the original of the notice;

(3) The judgment creditor or his counsel shall send to the last known address of the judgment debtor, by regular first class mail, postage prepaid, or shall deliver to the debtor personally, a copy of the notice of judgment lien, which notice shall include the text of KRS 427.060 and also the following notice, or language substantially similar:
“Notice to Judgment Debtor. You may be entitled to an exemption under KRS 427.060, reprinted below. If you believe you are entitled to assert an exemption, seek legal advice.”; and

(4) The judgment creditor or his counsel shall certify on the notice of judgment lien that a copy thereof has been mailed to the judgment debtor in compliance with subsection (3) of this section.

Effective: July 15, 1988

History: Created 1988 Ky. Acts ch. 318, sec. 1, effective July 15, 1988.

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426.990 Penalties.

(1) Any officer who fails to advertise for sale property taken under execution as required by subsection (1) of KRS 426.340 may, on motion of either the plaintiff or the defendant in the execution, be fined by the court from which the execution issued not less than five dollars ($5) nor more than twenty dollars ($20), and costs, for the use of the party making the motion. The officer shall be given at least ten (10) days’ notice, in writing, of the motion. The officer shall, in addition to the fine provided, be liable on his bond to the party aggrieved for damages.

(2) Any officer who fails to return a writ as required by subsection (2) of KRS 426.340 may, on motion, be fined by the court from which the writ issued not more than fifty dollars ($50), for the use of the party injured. The officer shall be given at least three (3) days’ notice, in writing, of the motion.

Effective: October 1, 1942

History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 1712, 1714.

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ANNOTATIONS:

Wood v. Commonwealth, No. 2006-CA-000683-MR (KYCA 4/13/2007)

Summary:  A former Master Commissioner for McCreary County was found guilty of misappropriating over $300,000.00 of funds.  The Master Commissioner was eventually disbarred and the individuals whose money was misappropriated had some remedies by filing a civil suit against the former Master Commissioner for his criminal conduct.

Full Text:

RENDERED: APRIL 13, 2007; 2:00 P.M.

NOT TO BE PUBLISHED

Commonwealth of Kentucky Court of Appeals

NO. 2006-CA-000683-MR

DEAN WOOD; THELMA CORNELIUS; PATRICIA GREEN; SANDY WOOD JOHNSON; ANN PERKIN; DOROTHY WOOD; JOHN CHESTER WOOD; AND LORELLA WOOD, ADMINISTRATRIX OF THE ESTATE OF HAROLD WOOD

APPELLANTS

v.

APPEAL FROM FRANKLIN CIRCUIT COURT

HONORABLE WILLIAM L. GRAHAM, JUDGE ACTION NO. 04-CI-00353

COMMONWEALTH OF KENTUCKY, ADMINISTRATIVE OFFICE OF THE COURTS FOR CHARLES E. KING, FORMER MASTER COMMISSIONER OF THE MCCREARY CIRCUIT COURT, AND HONORABLE JERRY WINCHESTER, JUDGE OF THE MCCREARY CIRCUIT COURT; AND THE KENTUCKY BOARD OF CLAIMS

APPELLEES

OPINION AFFIRMING

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BEFORE: ABRAMSON AND STUMBO, JUDGES; KNOPF, SENIOR JUDGE:1

1 Senior Judge William L. Knopf sitting as Special Judge by assignment of the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution and KRS 21.580.

KNOPF, SENIOR JUDGE: This is an appeal from an order of the Franklin Circuit Court affirming the dismissal of appellants’ action against the Administrative Office of the Courts (AOC) by the Kentucky Board of Claims. Because it is clear that neither McCreary Circuit Judge Jerry Winchester nor his master commissioner Charles E. King can be considered employees of AOC, the judgment of Franklin Circuit Court must be affirmed.

The facts are not in dispute. In 1987, Judge Winchester appointed King to serve as master commissioner for a four-year period ending May 11, 1991. Despite the fact that KRS 31A.010(3) specifically limits a master commissioner’s term to four years unless reappointed, it appears that King continued to serve as the de facto master commissioner until 2003 without reappointment or renewal of the $25,000 bond acquired in May 1987.

On August 19, 2002, the McCreary Circuit Court ordered King to sell four tracts of land formerly owned by John and Zola Wood. The property was sold for $234,600 and payment was completed on October 22, 2002. By order of January 2, 2003, the circuit court ordered King to distribute the proceeds of the sale to appellants but he failed to follow the court’s directive and distribution did not occur. On January 21, 2003, King was again ordered to distribute the sale proceeds, but the funds were never distributed to appellants.

King eventually pled guilty and was sentenced in May 2005 for one hundred and thirty-two counts of theft by failure to make required disposition of property valued over $300. The Supreme Court of Kentucky thereafter permanently disbarred King from the practice of law on the basis of the following misconduct :

While acting as Master Commissioner for McCreary Circuit Court, King misappropriated the proceeds from numerous separate sales by transferring funds from the Master Commissioner’s account to his own personal account instead of to the rightful beneficiaries. The aggregate value of the misappropriated funds exceeded $300,000.

King v. Kentucky Bar Ass’n, 162 S.W.3d 462 (Ky. 2005). The Supreme Court also ordered that King would not be permitted to apply for reinstatement of his license to practice law.

Prior to the resolution of the criminal charges, on August 11, 2003, appellants filed claims for damages in the Kentucky Board of Claims against AOC, King, and Judge Winchester. Respondents moved for summary judgment alleging that AOC was entitled to sovereign immunity and that appellants failed to state a claim upon which the Board of Claims could grant relief. The Board dismissed appellants’ claims by order dated January 27, 2004.

On appeal to the Franklin Circuit Court, appellants argued that Judge Winchester was negligent in his ministerial duties to reappoint King as master commissioner and to require him to post bond in a sufficient amount. Although the Franklin Circuit Court cited judicial immunity as its basis for upholding the dismissal of appellants’ claims, we are convinced that dismissal was required for the more fundamental reason that neither Judge Winchester nor King can be considered employees of AOC.

The Board of Claims was created for the purpose of providing a means of redress for damages occasioned by negligence on the part of the Commonwealth:

By statute, the Commonwealth’s immunity from liability for injury occasioned by its negligence has been waived to a limited extent. KRS 44.070 vests authority in the Board of Claims to ‘investigate, hear proof, and to compensate persons for damages sustained to either person or property as a proximate result of negligence on the part of the Commonwealth, any of its departments or agencies, or any of its officers, agents or employees while acting within the scope of their employment by the Commonwealth or any of its departments or agencies; * * *[.]‘

Gnau v. Louisville and Jefferson County Metropolitan Sewer Dist., 346 S.W.2d 754, 754 (Ky.1961), emphasis added. The Supreme Court of Kentucky recently reiterated the import of the Board of Claims legislation in Stratton v. Commonwealth, 182 S.W.3d 516, 519 (Ky. 2006):

Governmental immunity is a doctrine of law created by section 231 of the Constitution of Kentucky. As an agency operating under the direction and control of the central state government, the Cabinet for Families and Children is entitled to the protections of governmental immunity unless that immunity has been explicitly waived. The Board of Claims Act offers a limited waiver of governmental immunity with regard to negligence claims filed with the Board. The waiver extends only to negligence claims involving the performance of ministerial acts. KRS 44.073(2). A “ministerial” act is one in which the agency has no discretion; non-ministerial, or discretionary, acts cannot be a basis for recovery under the Board of Claims Act. [Citation omitted, emphasis added.]

The Supreme Court also made clear in Horn by Horn v. Commonwealth, 916 S.W.2d 173, 175 (Ky. 1995), that this legislation encompasses AOC:

As the AOC is part of the judicial department, it follows that the AOC falls within the reach of KRS 44.070(1) and the Board of Claims.

It does not follow, however, that the Board was the proper forum to pursue appellants’ claims against the circuit judge and his master commissioner for the simple reason that neither the judge nor the master commissioner can be considered employees of AOC.

A circuit judge is an elected constitutional officer whose compensation is fixed by the General Assembly. Ky. Const. §§ 117, 120. Similarly, a master commissioner acts at the direction of and accounts to the circuit judge. KRS 31A.010 provides that the master commissioner shall be appointed by and serve at the pleasure of the circuit judge and that his term “shall automatically terminate following the death, resignation, or permanent replacement of the Circuit Judge who appointed him.” KRS 31A.010(3). The master commissioner is compensated “by fees as provided by rule of the Supreme Court.” KRS 31A.010(4). The Court in Shamburger v. Commonwealth, 240 S.W.2d 636, 638 (Ky.1951), observed that the circuit court commissioner “is not an officer, although he is referred to as an officer of the court, but is an attache or assistant of the chancery court.” In view of these statutorily mandated conditions of employment, we are convinced that, like the circuit judge, a master commissioner cannot be construed to be employed by AOC and thus the Board of Claims is not the proper forum to redress the negligence of either of them. It is also important to note that the limited waiver of sovereign immunity set out in KRS 44.070 is a concept entirely distinct from that of judicial immunity. And because of that critical distinction, the Board lacks authority to waive judicial immunity, reinforcing the impropriety of lodging claims against the judge and master commissioner with that body.

That is not to say that appellants are without a remedy. Although the trial court found that “absolute and judicial immunity applies” to the claims against Judge Winchester and King, that conclusion is clearly erroneous with regard to the criminal acts of King as they were not undertaken within the scope of his duties as commissioner. Consider an analogous situation addressed in McCollum v. Garrett, 880 S.W.2d 530, 534 (Ky. 1994), where our Supreme Court concluded that immunity was unavailable to a prosecutor acting outside the scope of his authority:

The court correctly recognized that a public prosecutor must have immunity when he is acting within the scope of his authority for without it, the prosecutorial function would suffer. Nevertheless, the court examined the applicable constitutional and statutory provisions and concluded that as the prosecutor had no lawful authority to sign the name of a judge to an arrest warrant, he was outside the scope of his authority and without immunity. Throughout the Dugger opinion, one encounters the concept of “scope of prosecutorial duties,” or words to that effect, as defining the availability of prosecutorial immunity. The opinion is clear that so long as a prosecutor acts within the scope of the duties imposed by law, quasi-judicial immunity is available, but otherwise it is not. [Footnote omitted, emphasis added.]

We are convinced that this rationale applies with equal force to King, who has admitted his criminal conduct with regard to appellants’ property. Acting outside the scope of his duties as commissioner, King would not be entitled to the cloak of immunity in a civil suit.

Because the Board of Claims was not the proper forum in which to lodge the appellants’ claims, the judgment of the Franklin Circuit Court is affirmed.

ABRAMSON AND STUMBO, JUDGES, CONCUR.

KNOPF, SENIOR JUDGE, CONCURS BY SEPARATE OPINION.

KNOPF, SENIOR JUDGE, CONCURRING: I fully concur in the majority opinion, but write separately to address the question of judicial immunity concerning the omissions of Judge Winchester. While an important matter, it is not essential to the majority holding. However, I am of the opinion that because the Franklin Circuit Court found that judicial immunity applied to Judge Winchester’s failure to properly reappoint and supervise his master commissioner King by requiring an appropriate bond–the availability of judicial immunity in regard to those actions should be addressed.

In Forrester v. White, 484 U.S. 219, 229, 108 S.Ct. 538, 545, 98 L.Ed.2d 98 (1988), the United States Supreme Court drew a clear distinction between judicial or discretionary acts and ministerial acts for purposes of invoking judicial immunity:

In the case before us, we think it clear that Judge White was acting in an administrative capacity when he demoted and discharged Forrester. Those acts-like many others involved in supervising court employees and overseeing the efficient operation of a court-may have been quite important in providing the necessary conditions of a sound adjudicative system. The decisions at issue, however, were not themselves judicial or adjudicative. As Judge Posner pointed out below, a judge who hires or fires a probation officer cannot meaningfully be distinguished from a district attorney who hires and fires assistant district attorneys, or indeed from any other Executive Branch official who is responsible for making such employment decisions. Such decisions, like personnel decisions made by judges, are often crucial to the efficient operation of public institutions (some of which are at least as important as the courts), yet no one suggests that they give rise to absolute immunity from liability in damages under § 1983. [Emphasis added.]

It is certainly arguable that the failure to reappoint the master commissioner and to require the posting of an appropriate bond might fall within that criterion as distinguished from the purely judicial functions involved in Vaughn v. Webb, 911 S.W.2d 273 (Ky.App. 1995). In Vaughn, this Court discussed the availability of judicial immunity to the acts of a judge undertaken in the course of a particular case:

Judge Ray was acting within his jurisdiction when he entered the order of February 5, 1990, approving the periodic settlement filed by the guardian. His act was a judicial act, not an administrative act, and the plaintiff’s claim is barred by the doctrine of judicial immunity.

911 S.W.2d at 277.  Comparing the clearly judicial acts in Webb with the failure to properly supervise the reappointment and bonding of a master commissioner, it is clear to me that a legitimate argument could be made that the latter acts are not judicial or adjudicative, but rather fall within the Forrester rationale of “overseeing the efficient operation of a court.” The omissions in question here did not involve particular litigants or litigation, but were matters related to the staffing of a statutorily created assistant to the circuit judge. Legal ramifications notwithstanding, our circuit judges must be ever vigilant to avoid the problems generated by such omissions.

BRIEFS FOR APPELLANTS: M. Austin Mehr Timothy E. Geertz Austin Mehr Law Offices, P.S.C. Lexington, Kentucky

BRIEF FOR APPELLEE: Gregory D. Stumbo Attorney General of Kentucky James M. Herrick Assistant Attorney General Frankfort, Kentucky

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Sterling Grace Mun. Securities Corp. v. Central Bank & Trust Co., 926 S.W.2d 670 (KYCA 1995) 94-CA-001857

Summary: Appellants argue that the trial court should have set an “upset” price, as the amount of money brought by the master commissioner sale of the commercial property was inadequate.  However, the Court of Appeals ruled that it is within the discretion of the trial court whether to set an “upset” price and that the trial court declined to do so in this instance.  Therefore, the trial court did not abuse its discretion by not setting an “upset” price.

Text of the Case:  This appeal, brought by Sterling Grace Municipal Securities Corporation, R.J. Wall and Company, Ingalls and Snyder Value Partners, L.P., Tom Boucher, Steven Foote and John Dougherty, concerns the judicial sale of the property known as Lexington Festival Market Place in Lexington, Kentucky.

The appellants argue that:

(1) they did not receive timely notice of a hearing at which the circuit court fixed the terms of the judicial sale of the Lexington Festival Market Place property:

(2) the special master commissioner impermissibly objected to the inclusion of an upset price in the order of sale; and

(3) the circuit court erred in refusing to specify an upset price, or minimum acceptable bid, for the subject property in its order of sale.

Appellants are concerned with the price ultimately received for the property because they are the beneficiaries of a trust set up, in part, to receive the proceeds from the sale, and, in turn, distribute the net proceeds to the appellants. Because we are satisfied that the circuit court acted within its scope of authority and that the appellants had notice of all proceedings below, we affirm the court’s orders.

. . . .

Appellants argue that they did not receive notice that the circuit court intended to hear and decide whether to include an upset price in the order for a judicial sale of the Lexington Festival Market Place property. Thus, appellants contend, they were unable to present arguments for the inclusion of a “reserve” or upset price.

The record reveals that on June 1, 1994, appellants’ Kentucky and New Jersey counsel were notified of a hearing to approve an order of judicial sale to be held June 20, 1994. The hearing was postponed for reasons not apparent from the record, and a new notice of a hearing to be held on June 22, 1994, was hand-delivered to trustee for appellants’ interest and served by telecopy on appellants’ New Jersey counsel. Both notices clearly state that the movants would appear before the court to seek approval for a judicial sale of the property and to have the court set the terms of the sale. Notice of particular arguments, objections or issues to be addressed is not required by Ky.R.Civ.Proc. (CR) 5.01. In fact, it is the duty of counsel to be prepared to present arguments to the court that are appropriate in light of the proceedings. A motion to approve a judicial sale indispensably reviews what terms shall govern the sale. An upset price most assuredly falls within this category.

. . . .

Appellants’ second contention is that the special master commissioner lacked standing to object to the inclusion of an upset price in the order of sale. The position of master commissioner is created by statute, specifically Ky.Rev.Stat. (KRS) 31A.010. The disposition of property through a judicial sale requires the court to “refer the matter to the master commissioner or appoint a commissioner to conduct a public sale.” KRS 389A.030(4). If the master commissioner has sufficient reason to recuse himself, such as a conflict of interest, the court may appoint a special master commissioner “who shall meet the same qualifications as a master commissioner.” KRS 31A.040.

The master commissioner’s duties and powers have evolved over time. KRS 31A.010(2) provides that the master commissioner shall be governed by rules that are not in conflict with the statutes of the Commonwealth, in accord with Supreme Court rules and rules adopted by the court that employs him. The parameters of the master commissioner’s duties may be set by court order, and the Supreme Court has the authority to promulgate rules of conduct and other matters governing master commissioners. KRS 31A.010(6) and (8).

Nowhere in the law is there a prohibition against a master commissioner voicing objections or suggesting alternatives to the terms of a judicial sale. The final authority for the terms to be included in the order of sale rests, of course, with the circuit court. KRS 389A.030(4); CR 53.02(1).

. . . .

The appellants assert that the circuit court committed reversible error in declining to fix an upset price for the Lexington Festival Market Place property. They point to the price received for the property, $600,000.00, as grossly inadequate. While appellants claim that the value of the property was twenty times more than the price received, our search of the record fails to reveal supporting documentation for this claim. One memorandum filed with the circuit court argues that the value of the property was two to three times the amount obtained in the sale.

Whatever the value of the property, it has long been the rule in this jurisdiction that mere inadequacy of price is an insufficient ground for setting aside a judicial sale.

. . . .

A sale may be set aside if the price is inadequate and is accompanied by irregularities in the proceeding. Gross, 350 S.W.2d at 471. Here, the order of sale was entered only after a hearing held to determine the terms of sale. There is no suggestion that the master commissioner did not advertise the sale in accordance with the court’s orders, or that he in any way deviated from the terms the court specified for the conduct of the sale. Although the confirmation of the sale was not appealed in this action, there were objections to the confirmation of the sale based upon the same grounds argued here, objections which the court considered and found insufficient to justify a resale of the property.

The adequacy or inadequacy of the sale price aside, the appellants’ insistence that the trial court erred when it failed to set an upset price is without merit. We can find only three instances in the past century in which the failure to set an upset price was held to constitute reversible error. In Rosenham v. Pottinger, supra, Kentucky’s highest court reversed a sale and set an upset price because assurances were given to another party having an interest in the property that a certain price would be obtained. Rosenham, 60 S.W. at 370. The Court was influenced in its decision by the fact that the assurances given appeared to mislead one who might otherwise have bid for the property. Id.

. . . .

Accordingly, we hold that it is within the trial court’s discretion to fix or decline to fix an upset price. There was no abuse of discretion in this case.

The order of sale is affirmed.

All concur.

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