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April 3, 2026 Get Citation Alerts Download PDF Add Note

Bill Nation, of the Estate of Harold Nation v. Century21 Abbot Realty & Auction Corp. D/B/A Abbot Realty & Auction A/K/A Century 21 Abbot Realty & Auction

Court of Appeals of Kentucky

• Citations: None known
• Docket Number: 2024-CA-1438
• Precedential Status: Non-Precedential
• Judges: L. Jones

• Disposition: OPINION AFFIRMING IN PART, REVERSING IN PART, AND REMANDING APPEAL NO. 2024-CA-1424-MR; REVERSING CROSS-APPEAL NO. 2024-CA-1438-MR

• Opinion

• Authorities (12)

• Cited By (0)

• Summaries (0)

• Similar Cases (29.3K)

• PDF

Disposition

OPINION AFFIRMING IN PART, REVERSING IN PART, AND REMANDING APPEAL NO. 2024-CA-1424-MR; REVERSING CROSS-APPEAL NO. 2024-CA-1438-MR

Combined Opinion

                        by [Allison Jones](https://www.courtlistener.com/person/7333/allison-jones/)

RENDERED: APRIL 3, 2026; 10:00 A.M.
NOT TO BE PUBLISHED

Commonwealth of Kentucky
Court of Appeals

NO. 2024-CA-1424-MR
AND
CROSS-APPEAL NO. 2024-CA-1438-MR

ABBOT REALTY CORP. D/B/A
ABBOT REALTY & AUCTION
A/K/A CENTURY 21 ABBOT
REALTY & AUCTION; AND
ROBERT DORGAN APPELLANTS/CROSS-APPELLEES

APPEAL FROM SHELBY CIRCUIT COURT
v. HONORABLE MELANIE H. BRUMMER, JUDGE
ACTION NO. 17-CI-00005

BILL NATION, EXECUTOR
OF THE ESTATE OF HAROLD
NATION APPELLEE/CROSS-APPELLANT

OPINION
AFFIRMING IN PART, REVERSING IN PART, AND REMANDING APPEAL
NO. 2024-CA-1424-MR; REVERSING CROSS-APPEAL NO. 2024-CA-1438-
MR

---

BEFORE: CALDWELL, L. JONES, AND TAYLOR, JUDGES.
JONES, L., JUDGE: These appeals involve Robert Dorgan’s refusal to

compensate the estate of his deceased salesperson, Harold Nation, for a sale Harold

facilitated for Dorgan’s company prior to Harold’s passing in February 2016. In

Appeal No. 2024-CA-1424-MR, the above-captioned appellants/cross-appellees

(collectively “Dorgan”) contest a January 5, 2024 judgment of the Shelby Circuit

Court that, in conformity with a jury verdict, awarded Harold’s estate (the above-

captioned appellee/cross-appellant, hereinafter “Nation”) $45,825 in damages for

breach of contract, one dollar in damages for conversion, and $410,000 in punitive

damages. As set forth below, we affirm that judgment in part and reverse it in part.

Nation, in Cross-Appeal No. 2024-CA-1438-MR, also contests the trial court’s

refusal to grant him prejudgment interest. As set forth below, we reverse.

I. APPEAL NO. 2024-CA-1424-MR

Dorgan’s appeal contests the legal veracity of Nation’s conversion

and punitive damages claims, as well as what Nation was awarded for those

claims. Dorgan also takes issue with several of the trial court’s evidentiary rulings.

A. CONVERSION AND PUNITIVE DAMAGES

Dorgan presents several arguments relating to why, in his view, the

circuit court erred in granting Nation awards for compensatory and punitive

damages. However, the most critical issue Dorgan has preserved1 in this vein is

1
Dorgan raised this point in directed verdict and post-judgment motions.

-2-
whether the “economic loss doctrine,” as adopted in Kentucky, precluded Nation

from asserting conversion and punitive damages claims in conjunction with his

breach of contract claim. This is an issue of law. As such, we review it de novo.

See Kentucky Farm Bureau Mut. Ins. Co. v. Blevins, 268 S.W.3d 368, 372 (Ky.

App. 2008). It is also an issue that, before we delve into its substance, requires a

measure of context – much of which is provided by Nation’s operative complaint

(i.e., the second amended complaint Nation filed on March 9, 2021) and the

instructions that were ultimately submitted to the jury. In relevant part, Nation’s

complaint provided:

1. That on May 4, 2008[,] Defendant, Century 21 Abbot
   Realty, by and through, broker and Defendant, Robert
   Dorgan, did enter into a Broker-Salesman Contract with
   the decedent Harold Nation.

2. That pursuant to the terms of that contract, Harold
   Nation was to work diligently to sell, lease or rent real
   estate listed with the Broker.

3. That the usual and customary commissions would be
   charged for services performed at rates agreed upon by
   the parties.

4. That division and distribution of the earned
   commissions paid to or collected by the Broker is to take
   place as soon as practicable after collection of such
   commissions from the party or parties for whom the
   services may have been performed.

5. That according to the customary practices and
   agreement of Harold Nation and the Defendants, in 2015

-3-
and thereafter, Harold Nation’s division of commissions
earned was 70.5%.

1. [sic] The decedent, Harold Nation, did enter into a
   Multiple Listing Contract as an agent for Century 21 with
   the Tobacco Road Farms, LLC, for 305 acres on Mt.
   Eden Road, Shelbyville, Kentucky 40065, PIN 053-00-
   029, 053-00-040, 063-00-001, with terms that included
   commission was to be paid at 5% of the sale price and
   was earned upon acceptance of an offer.

2. That the decedent, Harold Nation was also the agent
   of the purchaser, The David Howard Fenley Living
   Trust;

3. On or about October 22, 2015, The David Howard
   Fenley Living Trust did offer to purchase the 305 acres
   on Mt. Eden Rd., in Shelbyville, Kentucky, identified
   above, and the owner, Tobacco Road Farms, LLC, did
   accept that offer. The parties formalized their agreement
   in a Uniform Sales and Purchasing Contract.

4. The decedent did all of the necessary work to
   complete the contract for sale of said property;

5. The decedent died on February 15, 2016;

6. The closing on the property occurred on March 29,
   2016;

7. Robert Dorgan attended the closing and collected a
   commission of $65,000.00;

8. Demand has been made by the estate for the division
   and distribution of the commission to Defendants, which
   has been refused;

-4-
CAUSE OF ACTION I – BREACH OF CONTRACT

1. Plaintiff re-alleges and re-avers all of the allegations
   set forth herein above as if restated fully herein below,
   and for Count I of its Second Amended Complaint states
   as follows:

2. Nation and Defendants entered into a valid, written
   contract entitled Broker-Salesman Contract, on May 5,
   2008;

3. The contract was in full force and effect on the date
   of the contract for the sale of the Tobacco Road Farm;

4. Pursuant to the terms of the Uniform Sales Contract,
   the commission of the sale was earned upon acceptance
   of the offer;

5. [sic] By the deliberate and intentional act of the
   Defendants, Defendants breached the terms of the Broker
   Salesman Contract by denying Plaintiff the division and
   distribution of the commissions earned by Harold Nation
   at the time the commission was received pursuant to the
   terms of the contract;

6. As a direct and proximate result of the breach of the
   contract by Defendants, Plaintiff has incurred damages in
   an amount in excess of the minimum amount for subject
   matter jurisdiction of this Court, to be proven at trial;

CAUSE OF ACTION II – CONVERSION AND
CIVIL THEFT

1. Plaintiff re-alleges and re-avers all of the allegations set forth herein above as if restated fully herein below, and for Count II of its Second Amended Complaint states as follows:

-5-
23. Harold Nation had a legal right to his commission
from the sale of the property having performed his duties
under the Broker-Salesman Contract;

1. Defendants in gross disregard for human decency
   and in breach of their contract with Nation denied
   Nation’s estate from the right of possession of Nation’s
   commission;

2. Defendants exercised dominion over the commission
   in a manner that denied and continues to deny Plaintiff’s
   right to use and enjoy the division, all to Defendant’s
   own use and beneficial enjoyment;

3. Defendants have acted intentionally to interfere with
   Plaintiff’s possession of its division of the commission;

4. Plaintiff has made demand for the distribution of the
   Plaintiff’s division of the commission from Defendants,
   and said request has been refused;

5. The Defendants’ acts are the actual and legal cause
   of Plaintiff’s loss;

6. As a direct and proximate result of the Defendants’
   conversion of the division, Plaintiff has suffered damage
   by the loss and continued loss of the use and enjoyment
   of the division of the commission in an amount in excess
   of the minimum amount for subject matter jurisdiction of
   the Court, to be proven at trial[.]

Record at 499-502 (citations to referenced exhibits omitted).

As the above indicates, Nation’s claims of conversion and breach of

contract were both dependent upon Dorgan’s alleged breach of a contractual duty

to pay Nation compensation commensurate with a 70.5% division of the $65,000

commission Dorgan received from the sale of the Mt. Eden property, which is

-6-
$45,825. Likewise, after these claims were submitted to the jury following trial,

the jury was instructed to assess, in the context of both claims, whether Dorgan

breached a duty to pay Nation what was owed by virtue of their contract.

Specifically, the breach of contract instructions provided:

INSTRUCTION NO. 3
Breach of Contract

If you are satisfied by a preponderance of the evidence
that:

1. That the Plaintiff entered into a valid contract titled
   Broker-Salesman Contract with the Defendants Century
   21 and Mr. Dorgan on May 5, 2008; and

2. That said Contract entitled the Plaintiff to a portion of
   the commission upon completion of the sale of the
   Property; and

3. That the Plaintiff earned a portion of the commission;
   and

4. That Defendants Century 21 and Mr. Dorgan failed to
   give the Plaintiff the commission that the Plaintiff earned
   under the Contract; and

5. That the Plaintiff suffered damages when the
   Defendants Century 21 and Mr. Dorgan failed to give the
   Plaintiff the commission he earned under the contract,

Then you will find for the Plaintiff and proceed to
Verdict Form No. 1. If you are not satisfied by the
evidence, you will find for the Defendants and proceed to
Verdict No. 2.

Record (R.) at 1060.

-7-
“Verdict Form No. 1” – which the jury was instructed to utilize only if

they found in Nation’s favor on the breach of contract claim – directed the jury to

award “Damages, not to exceed $45,825.00,” that is the full amount of what Nation

alleged in his complaint he was entitled to contractually receive of the commission.

Further, the jury was directed to “return to Jury Instruction 5” (set forth below)

only if they awarded Nation those contractual damages. See R. at 1065. By

contrast, “Verdict Form No. 2” – which the jury was instructed to utilize if they did

not find in Nation’s favor on the breach of contract claim – directed the jury not to

consider Jury Instruction 5. See R. at 1066.

In turn, “Jury Instruction 5” delineated Nation’s conversion claim – a

claim that sought only nominal damages:

INSTRUCTION NO. 5
Conversion

You will find for Plaintiff if you are satisfied by clear and
convincing evidence:

1. That the Plaintiff had legal title to a portion of the
   Commission; and

2. That the Plaintiff had possession of that portion of the
   Commission at the time of the conversion or the right to
   possess that portion of the Commission at the time of the
   conversion; and

3. That the Defendants Century 21 and Mr. Dorgan
   exercised dominion over that portion of the Commission
   in a manner which denied the Plaintiff’s rights to use and
   enjoy that portion of the Commission; and

-8-
4. That the Defendants Century 21 and Mr. Dorgan used
that portion of the Commission for its own use and
beneficial enjoyment; and

1. That the Defendants Century 21 and Mr. Dorgan
   intended to interfere with the Plaintiff’s possession of
   that portion of the Commission; and

2. That the Plaintiff made some demand for that portion
   of the Commission; and

3. That the Defendants Century 21 and Mr. Dorgan
   refused to return said portion of the Commission; and

4. That the Defendants Century 21 and Mr. Dorgan’s
   acts were the cause of the Plaintiff’s loss of that portion
   of the Commission; and

5. That the Plaintiff suffered damage by the loss of that
   portion of the Commission.

If you find for the Plaintiff, you will proceed to Verdict
Form No. 5. . . .

VERDICT FORM NO. 5
Conversion

We, the Jury, find for the Plaintiff, under Instruction No.
5, and award it the following nominal damages:

---

Damages, not to exceed $1.00.

R. at 1062 and 1069.

The jury ultimately awarded Nation $45,825 for breach of contract,

and $1 in “nominal” damages for conversion. The “nominal” damage award for

-9-
conversion was, in turn, the sole predicate specified in the instructions for directing

the jury to proceed to “INSTRUCTION NO. 6 Punitive Damages.” See R. at

1063 and 1069. And, after proceeding to that instruction, the jury then awarded

Nation punitive damages against Dorgan in the amount of $410,000.

With that context in mind, we turn to whether the “economic loss

doctrine” precluded Nation from asserting conversion and punitive damages claims

in conjunction with his breach of contract claim, and we begin our analysis with a

brief review of what constitutes “breach of contract” and “conversion.” Generally,

a plaintiff must establish three things to prove a breach of contract claim: (1)

existence of a contract; (2) breach of that contract; and (3) damages flowing from

that breach. Barnett v. Mercy Health Partners–Lourdes, Inc., 233 S.W.3d 723,

727 (Ky. App. 2007). In a breach of contract action, the measure of damages “is

that sum which will put the injured party into the same position he would have

been in had the contract been performed.” Id. at 727-28. A breach of contract

typically does not permit an award of punitive damages. See Nami Res. Co., LLC

v. Asher Land & Min., Ltd., 554 S.W.3d 323, 335 (Ky. 2018). By contrast,

punitive damages can be recoverable for a tort claim such as conversion. See

Jones v. Marquis Terminal, Inc., 454 S.W.3d 849, 854 (Ky. App. 2014). To prove

a claim of conversion, a plaintiff must establish the following:

(1) the plaintiff had legal title to the converted property;

-10-
(2) the plaintiff had possession of the property or the
right to possess it at the time of the conversion;

(3) the defendant exercised dominion over the property in
a manner which denied the plaintiff’s rights to use and
enjoy the property and which was to the defendant’s own
use and beneficial enjoyment;

(4) the defendant intended to interfere with the plaintiff’s
possession;

(5) the plaintiff made some demand for the property’s
return which the defendant refused;

(6) the defendant’s act was the legal cause of the
plaintiff’s loss of the property; and

(7) the plaintiff suffered damage by the loss of the
property.

Jones, 454 S.W.3d at 853 (citations omitted).

Considering their respective elements of proof, one can imagine any

number of scenarios where a breach of contract and conversion claim might

overlap. And to be clear, “a breach of contract action and a claim for conversion

are not necessarily incompatible[.]” Id. at 853-54. However, “[t]he failure to

perform a contractual obligation typically does not give rise to a cause of action in

tort[.]” Mims v. Western–Southern Agency, Inc., 226 S.W.3d 833, 836 (Ky. App.

2007) (internal quotation marks and citation omitted). Furthermore, a failure to

pay money that is owed, standing alone, cannot be considered tortious because:

The action of tort has for its foundation the negligence of
the defendant, and this means more than a mere breach of

-11-
a promise. Otherwise, the failure to meet a note, or any
other promise to pay money, would sustain an action in
tort for negligence, and thus the promisor be made liable
for all the consequential damages arising from such
failure.

Dice’s Adm’r v. Zweigart’s Adm’r, 161 Ky. 646, 171 S.W. 195, 197 (1914)

(quoting Tuttle v. George H. Gilbert Mfg. Co., 13 N.E. 465, 467 (Mass. 1887)).

In other words, more is required for these claims to coexist in the

same action, such as “[a] breach of a duty arising independently of any contract

duties between the parties[.]” Nami, 554 S.W.3d at 336 (emphasis in original).

Furthermore, these claims cannot coexist where “the economic losses

arising from the breach of contract [are] fully recoverable” through a breach of

contract action, and the plaintiff “d[oes] not show that he sustained tort damages or

a loss independent of the contract damages.” Jones, 454 S.W.3d at 854. That was

the case in Jones; and because of it, we held that the trial court in that matter did

not err by refusing to award the plaintiff compensatory and punitive tort damages

for conversion in addition to contractual damages. Id. This was essentially an

application of the “economic loss doctrine.” The doctrine was also applied and

formally recognized in Nami, supra. There, as the Kentucky Supreme Court

explained, the plaintiff was properly denied compensatory and punitive damages

for alleged fraud associated with the breach of a gas royalty contract because the

plaintiff “was made whole through its award for unpaid royalties” and “[i]t

-12-
assert[ed] no compensable injury beyond its claim for unpaid royalties” nor did it

allege “misconduct by [the defendant] other than the conduct of breaching the

contract.” Nami, 554 S.W.3d at 336.

In Kentucky, the “economic loss doctrine” prohibits recovery for tort

claims “where the damages plaintiffs seek are the same economic losses arising

from the alleged breach of contract.” Nami, 554 S.W.3d at 335 (internal quotation

marks omitted). The doctrine ensures that the “law of contract” and “the law of

torts” do not “dissolv[e] one into the other.” Id. (citation omitted). Thus, a

plaintiff can only “recover in contract for purely economic loss due to disappointed

expectations, unless he can demonstrate harm above and beyond a broken

contractual promise.” Id. Accordingly, where the tort claim and its associated

damages are indistinguishable from the breach of contract claim, the plaintiff

cannot recover for the tort claim. Id. at 336.

To be sure, neither Jones nor Nami involved the kind of contract at

issue here. However, in Nami, the Kentucky Supreme Court analyzed this issue

broadly enough to encompass it, explaining “the rule in Kentucky” is that “when a

plaintiff may obtain complete relief for his contractual losses by means of

compensatory damages under a breach of contract claim,” then “he may not

simultaneously recover punitive damages after being made whole on his

contractual damages.” Nami, 554 S.W.3d at 336. The Court explained a party

-13-
may assert an independent claim for fraudulent or malicious conduct associated

with the breach of contract only if that conduct resulted in “damages that differ

from the damages sustained by reason of the breach of contract[.]” Id. (emphasis

added).

Here, Nation did not allege or otherwise demonstrate harm above and

beyond a broken contractual promise. The only damage Nation claims he suffered

was the nonpayment of $45,825 – what he asserted was contractually owed. He

was awarded all of that under his breach of contract claim. That award made

Nation whole. True, Nation asserted that Dorgan’s prolonged refusal to pay him

was baseless and malicious, but the economic loss doctrine applies “even when the

breach is motivated by malice and accomplished through fraud[.]” Id. Nation also

attempted to distinguish his “conversion damages” from his “breach of contract

damages” through the artifice of a one-dollar nominal damages award. However,

Nation’s complaint and the jury instructions both underscored that but for the

breach of contract, that nominal damages award could never have existed; and in

any event, lending credence to such a “nominal damages” artifice in this context

would effectively eviscerate our Supreme Court’s pronouncement that a plaintiff

who obtains complete relief for his contractual losses in a breach of contract claim

may not simultaneously recover tort-related punitive damages after being made

whole on his contractual damages. Id. at 336.

-14-
In sum, Nation asserted no breach of any “duty” independent from his

breach of contract action; he simply repackaged a contractual duty into a predicate

for a tort claim. His conversion claim, and his accompanying punitive damages

claim that was wholly dependent upon it, were therefore barred by Kentucky’s

economic loss rule and should have been dismissed. Accordingly, we reverse to

this extent and remand.

B. EVIDENTIARY ISSUES

We review a trial court’s evidentiary rulings under the abuse of

discretion standard. See Engles v. Commonwealth, 373 S.W.3d 456, 457 (Ky.

App. 2012). An improper evidentiary ruling cannot warrant reversal if it only

results in harmless error. See Kentucky Rule of Civil Procedure (“CR”) 61.01. On

appeal, Dorgan argues the trial court abused its discretion with respect to three

evidentiary rulings: (1) admitting his entire deposition into evidence and then

permitting the jury to have his deposition with them during deliberations; (2)

admitting the report of Nation’s expert witness into evidence and then permitting

the jury to have the report with them during deliberations; and (3) failing to exempt

Nation’s expert witness from the requirements of sequestration.

For purposes of our review, we will limit our analysis of Dorgan’s

arguments to whether these perceived errors were something more than harmless –

the crux of the trial court’s rulings with respect to each of these perceived errors

-15-
was that none of them were more than harmless. The two points connecting these

perceived errors together are Dorgan’s contentions that none of them were

harmless because in his view: (1) this evidence likely caused the jury to give undue

weight to Nation’s contention that Harold was owed compensation from Dorgan at

a rate equivalent to 70.5% of the commission received for the Mt. Eden

transaction; and (2) this evidence likely inflamed the jury’s prejudice and caused it

to award Nation an unfairly large amount of punitive damages.

That latter point is a moot one: We have already held that Nation’s

conversion and punitive damages claims were not legally tenable; accordingly, it is

irrelevant whether these complained-of evidentiary rulings inflamed the jury’s

prejudice and caused it to award Nation an unfairly large measure of punitive

damages. Instead, we will focus only upon the former point, i.e., whether this

evidence likely caused the jury to give undue weight to Nation’s contention that it

was owed compensation from Dorgan at a rate equivalent to 70.5% of the

commission received for the Mt. Eden transaction.

1. Admitting Dorgan’s entire deposition into evidence and then permitting the jury to have his deposition with them during deliberations was at most harmless error.

Some additional background is necessary to address this issue. The

“broker-salesman contract” Harold executed with Dorgan included two provisions

that have been central to this dispute from the outset:

-16-
7. The usual and customary commissions shall be
charged for any service performed hereunder at rates
agreed upon by the parties.

1. The division and distribution of the earned commissions as set out in Paragraph 7 hereof, which may be paid to or collected by the Broker shall take place as soon as practicable after collection of such commissions from the party or parties for whom the services may have been performed.

In other words, the contract provided Harold was entitled to a

“division and distribution of the earned commissions,” but it was silent regarding

what that “division” was. Consequently, the parties relied upon course of dealing

evidence to supply the missing term. Nation, as indicated, alleged in the complaint

that Harold was entitled to compensation equivalent to a 70.5% division of the Mt.

Eden commission. Nation asserted that figure was consistent with Harold’s course

of dealing with Dorgan. Dorgan, on the other hand, denied that allegation in his

answer and claimed prior to trial that Harold and all of Dorgan’s other salespeople

who had signed the same contract as Harold were never entitled to any set rate of

compensation; and that pursuant to their courses of dealings their compensation

was always decided on a “transaction by transaction” or “sale by sale” basis

dependent upon “participation” and whether that salesperson – as opposed to some

other salesperson – “completed the transaction.” Dorgan also emphasized that

claim throughout his 104-page deposition of October 16, 2018. Indeed, that claim

-17-
was the focus of almost the entirety of his deposition. Here are some illustrative

examples:

Q: In that contract, there’s no mention of a split of the
commission by percentage. How would you all
determine that division of the commission?

DORGAN: There was no set agreement.

Q: So would you make that decision on a transaction by
transaction basis?

DORGAN: Yes.

Q: And how would that come about?

DORGAN: Based on the participation.

Q: What do you mean?

DORGAN: Participation that the agent put in.

...

Q: Your 12 agents right now do you believe that they
operate under an assumption that they are entitled to a
certain percentage of the commission that they earn
through their sales?

DORGAN: No, I don’t.

Q: They’re all just on a transaction by transaction basis?

DORGAN: All the listings are mine. We work, if they
complete the transaction, we work accordingly.

Q: And so are you saying that they don’t know how
much they earn?

-18-
DORGAN: When they receive their check.

Q: They don’t have any idea before that time?

DORGAN: Each agent is on an agent by agent basis.

Q: Okay. You said that each one was paid according to
transaction by transaction. I’m asking does an agent
have an expectation as to what their division of the
commission would be?

DORGAN: There is no set amount.

...

Q: And so per agent each agent has no idea what you’ll
pay them for their percentage –

DORGAN: There is no set amount.

Dorgan Deposition at 6-10 (emphasis added).

Q: Now Mr. Dorgan, can you agree that in 2015 Mr.
Nation received between 70.5 percent and 72 percent of
the gross commissions paid to Century 21?

DORGAN: On, each agent is paid on a case by case
basis, and Harold was on individual sales basis.

Q: That is not an answer to the question that I asked. In
2015 was Mr. Nation paid a percentage of the gross
commission ranging between 70.5 percent and 72
percent?

DORGAN: The commission payment that Mr. Nation –

Q: Mr. Dorgan, yes or no?

DORGAN: – was never a set amount.

-19-
Q: Was he paid between 70.5 percent and 72 percent on
each of the sales in 2015?

...

DORGAN: There was not a set rate that he was paid.

Dorgan’s Deposition at 62-63.

Despite claiming that his course of dealing with Harold and his other

salespeople supported that a given salesperson’s compensation was dependent

upon “participation,” however, Dorgan could not provide any supportive examples

during either his deposition or trial testimony. Additionally, Dorgan pulled a

sudden “about-face” from his deposition testimony when he testified, at trial, about

the set rate of roughly 70% that Harold actually did receive throughout 2015:

Q: In [the broker-salesman contract], is there a set
percentage of the commission that an agent would
receive?

DORGAN: There is not.

Q: Why?

DORGAN: Each agent in the office, as in most offices, is
at their own set commission rate because different agents
are more experienced than others, been in the business
longer, better able to work on their own with less
supervision. So, there are various reasons for various
commission levels.

Q: Did this contract authorize Harold Nation to procure
listings on behalf of Abbot Realty?

DORGAN: It did.

-20-
Q: Were there any other written agreements,
memorandums, or addendums to this contract?

DORGAN: No, ma’am.

Q: Can you read paragraph 7 please?

DORGAN: Would you like me to read it out loud?

Q: Please.

DORGAN: Number seven. The usual and customary
commission shall be charged for any service performed
hereunder at rates agreed upon by the parties.

Q: Now, that’s charged to the client, right?

DORGAN: Right.

Q: Okay. And then paragraph 8, please?

DORGAN: Eight. The division and distribution of
earned commissions as set out in paragraph seven hereof,
which may be paid to or collected by the broker, shall
take place as soon as practicable after collection of such
commissions from the party or parties for whom the
services may have been performed.

Q: Did Mr. Nation have a percentage of commission that
he historically received for sales on which he was an
agent?

DORGAN: He did.

Q: What was that?

DORGAN: It was roughly 70 percent.

-21-
Video Record (V.R.), September 6, 2023, at 1:08:47-1:10:41 p.m. (emphasis

added).

Q: In this deposition, when I asked you if you would
make the decision on a transaction by transaction basis,
you said “yes.” And the question was, “how would that
come about,” and your answer was “based on the
participation.” Was that the question asked and your
answer given?

DORGAN: Yes.

Q: Thank you. When I asked you what did you mean by
that, you said “participation of the agent put in.” Was
that the question asked and your answer given?

DORGAN: Yes.

Q: And earlier today, I asked you if the agents had a set
percentage of a commission that they received, and you
replied that they did. Is that correct?

DORGAN: Yes.

Q: If you look on the deposition on page eight, I asked
you about whether or not the agents had a belief that you
would pay them, and you responded yes.

...

“Do they just act in their belief that you will pay them,”
and your response was “yes.” Was that the question I
asked and the answer given?

DORGAN: Yes.

Q: And then I asked, “but with no idea about how much
that would be,” and you responded “it’s on a sale by
sale.” Was that the question asked and the answer given?

-22-
DORGAN: Right. Because each sale was completed by
different agents in the office, and they’re at different
commission rates.

Q: And then again, on line 24, I questioned you again,
and I asked, “They have no idea what the percentage of
that commission would be?” And you responded at the
top of page 9, line 2, “There’s no set amount.” Was that
the question asked and the answer given?

...

The question was, “So sale by sale, and no other written
communication between you, they have no idea what the
percentage of that commission would be.” And your
response was, “There’s no set amount. Was that the
question asked and the answer given?

DORGAN: That was the answer, and the gist of it was
that each agent has a separate sales commission because
they’re all at different levels.

Q: On page 10, line 12, the question was, “Mr. Dorgan,
when you sit down with each one of your agents and
discuss the percentage of fees per transaction,” and you
respond “yes,” and I ask, “Yes, okay, and when do you
do that, Mr. Dorgan?” And your response was “after the
transaction is completed.” Was that the question asked
and your answer given?

DORGAN: Yes.

Q: Today, though, you’ve testified that the agents do
have a percentage that they expect to receive on the
commission. Is that true?

DORGAN: Each agent has their own amount that they
receive. Yes. It varies based on their experience.

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Q: On the top of page 17, the question was “the average
of all the properties listed in here is – ”

DORGAN’S COUNSEL: Sorry counsel. One second.

Q: Sure. I’m sorry. It’s line 1. “The average of all the
properties listed in here is 69% Mr. Dorgan.” And at this
time we’re talking about pre-2013 closings. And I asked
you, “Did you have an arrangement with Mr. Nation to
pay him 69% of the commission reflected by your
office?” And your answer was, “there was no set rate.”
Was that the question asked and your response given?

DORGAN: I recall we were paying Harold roughly that
amount, but this question I thought was in terms of the
agents in the office. Each agent is at a different rate and
level based on their experience in the real estate
business.

V.R., September 6, 2023, at 1:18:32-1:24:26 p.m. (emphasis added).

With the above in mind, we now turn to the specifics of why, in

Dorgan’s view, the admission of his deposition into evidence influenced the jury to

find in favor of Nation regarding Nation’s breach of contract claim. In his words:

[T]he deposition testimony is a lengthy and adversarial
quarrel, where Dorgan largely refuses to submit to Mrs.
Whitten’s (deposing counsel) beratement and insistence
that Nation was unequivocally owed 70.5% of
commission for the transaction in dispute.

Dorgan’s Br. at 17-18.

After reading the length and volume of the transcript, the
jurors likely disregarded most – if not all – of their
recollection of Dorgan’s spoken words and instead
unduly emphasized the written words readily before
them.

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Id. at 19.

As for his “spoken words” that Dorgan believes the jury “likely

disregarded” due to their possession of his deposition, Dorgan then points to one

sentence of testimony he gave at trial: “There was, as I mentioned before, no set

percentage, as each agent is at a different rate, and these did vary a bit over the

years with Mr. Nation.” V.R., September 6, 2023 at 1:51 p.m. (emphasis added).

Dorgan also adds that because he stated on page 8 of his deposition that “Each

agent is on an agent by agent basis,” his deposition was consistent with his trial

testimony. See Dorgan’s Br. at 22.

In fairness, a substantial part of Dorgan’s argument regarding the

“harm” caused by the jury’s possession of his deposition was, as indicated earlier,

directed toward how he believed it also influenced the jury’s conversion and

punitive damages awards – he asserts it was used to paint him as untruthful,

malicious, and deserving of tort damages. As stated, those are moot points.

Stripped of those contentions, however, what remains of Dorgan’s argument

regarding “harm” – as it relates to Nation’s breach of contract claim – is difficult to

follow.

To start, Dorgan’s lone sentence of deposition testimony that “Each

agent is on an agent by agent basis” did not have the effect of squaring his

deposition testimony with his trial testimony. In his deposition, Dorgan repeatedly

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denied that any of his salespeople had any expectation of being paid anything until

the moment he told them – after the sale closed – what they would get. At trial, by

contrast, he repeatedly testified that all his salespeople expected to be paid at a set

individualized rate for their sales. Further, he testified Harold had a set rate that

was based upon his level of experience; that he was compensating Harold at a rate

equivalent to roughly 69% of commissions received from his sales pre-2013; and

that more recently in 2015, Harold was compensated at a rate of roughly 70%.

Recall that during his deposition, Dorgan was also presented with

course of dealing evidence indicating that in each of the sales Harold made in

2015, Harold received compensation equivalent to a range between 70.5 percent

and 72 percent of the gross commissions paid. That same evidence was presented

at trial. As “Verdict Form No. 1” tends to indicate, Nation only requested

compensation consistent with the lower of those two “roughly 70%” amounts.

Furthermore, Dorgan was asked during his deposition to provide examples

supporting the existence of a course of dealing wherein he would lower the

expected rate of his salespersons’ compensation based upon their “participation.”

He could not do so at his deposition, nor could he do so at trial.

With that in mind, we are left to guess at how Dorgan’s deposition

testimony – as opposed to his trial testimony and other trial evidence – influenced

the jury’s decision to find in favor of Nation regarding Nation’s breach of contract

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claim. However, it certainly cannot be said that the jury’s possession of Dorgan’s

deposition – a deposition where Dorgan vehemently maintained none of his

salespeople were entitled to be compensated at any rate – caused the jury to ignore

Dorgan’s one sentence of trial testimony that “each agent [was compensated] at a

different rate.” (Emphasis added.) After all, the jury determined Harold was

indeed entitled to be compensated at a rate of 70.5%. If any error resulted from

the trial court’s decision to admit Dorgan’s deposition into evidence and allow the

jury to review it during deliberations, the error had no discernable impact upon

how the jury resolved the breach of contract claim, and it does not warrant

reversal. See CR 61.01.

1. Admitting the report of Nation’s expert witness into evidence and then permitting the jury to have the report with them during deliberations was at most harmless error.

Over Dorgan’s objection, the trial court admitted into evidence the

January 23, 2023 report of Debra Holloway Ison, the expert Nation hired to, in the

words of Ison’s report, “evaluate the enforcement of the broker-salesman contract

executed between Harold and Dorgan.” Her report’s ultimate conclusion was that

“Harold Nation is owed his customary division of the commission paid on the sale

of the Tobacco Road Farm, Mt. Eden Road, Shelbyville, Kentucky, in the amount

of 70.5%.” The report’s written bases for that conclusion were as follows:

On or about May 5, 2008, Harold Nation became a
real estate agent for Century 21 Abbot Realty. Dorgan,

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as broker for Abbot Realty, entered into a contract with
Nation entitled Broker-Salesman Contract. The Broker-
Salesman Contract required Nation to charge “usual and
customary commissions” for his services and required
Dorgan to distribute the agent’s division of earned
commissions as soon as practicable after collection of
such commissions from the party or parties for whom the
services may have been performed. Dorgan and Nation
operated under this agreement from 2008 until Nation’s
death on February 15, 2016. A review of the listings
handled by Nation during his tenure at Abbot Realty
confirm that from 2008 until 2013 Nation was paid 69%
of the gross commission 23 out of 27 times. The four
times he was not paid 69% he was paid 73.7%, 54.7%,
70.8% and 92%. From December of 2013 through the
end of 2015, Nation was paid 70.5% 15 out of 21 times.
The remaining six times he was paid 71.9%, 71.2%,
72.29%, 71.64%, 70.9% and 71.6%. At no time was
Nation not paid a division of commissions earned for his
services as an agent of Abbot Realty.

On or around October 12, 2015, Nation secured the
listing contract for the Tobacco Road Farm on Mt. Eden
Road in Shelbyville, Kentucky. Pursuant to the terms of
the listing contract, the seller, agreed to pay a
commission of 5% of the sales price, at the time of
closing. The listing contract further provided that the
total commission was earned upon acceptance of the
offer.

Harold Nation found the buyer for the property and
on October 22, 2015[,] an offer was accepted for the sale
of the Tobacco Road Farm in the amount of $1,300,000.
The commission was paid to Abbot Realty at the closing
in the amount of $65,000 on March 29, 2016. Mr. Nation
passed away on February 15, 2016. Abbot Realty has
failed to distribute Mr. Nation’s division of the
commission as required under the Broker-Salesman
Contract between Dorgan and Nation.

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In reviewing the 2011-2016 YTD Sold (Property)
Totals by Agent forms and the 2011 – 2016 Gross & Paid
Commissions Forms, my research shows that the other
agents at Abbot Realty were consistently paid a particular
percentage on the commission on their transactions and
periodically the agents received an increase in
percentage. This is consistent with other agencies that
reward agents for longevity or business that the agent
may be bringing in. In my opinion, the agents had a
reasonable expectation that they would receive a
particular percentage of the commissions earned. I did
not see anything in the research provided to me that
would support a theory that the agents had no expectation
to be paid a particular rate or that the rate was subject to
the discretion of Dorgan.

In my opinion, Nation is owed a division of the
gross commission received for the sale in the amount of
70.5% or $45,825.00. The history and customary
practices of the parties should govern this matter.
Though there is no specific term that sets forth the
agent’s division of the commission, the previous dealings
of the parties reveal that Nation had an expectation to be
paid a minimum of 70.5%. Nation secured the sales
contract between the seller and buyer, and from that
contract the commission was earned. Nation is therefore
due his division pursuant to the Broker Salesman
Contract after collection of the commission, which
occurred at the closing on March 29, 2016. Any acts of
Dorgan to finalize the deal, including but not limited to
attending the closing, or escorting the appraiser to the
property did not negate Nation’s right to receive his
division of the earned commission. Brokers frequently
attend closings or perform other services when an agent
is unavailable. These acts are common courtesy, and part
of the services rendered by the Broker for his portion of
the earned commission.

Ison Expert Report (Plaintiff’s Exhibit 15) at 3-4.

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As stated, our analysis is limited to whether the admission of this

document caused something more than harmless error in the context of Nation’s

breach of contract claim against Dorgan. In that vein, Dorgan’s argument is as

follows:

The admission of the expert report on its own was
erroneous and harmful, but its impact was compounded
by the erroneous and harmful admission of the deposition
transcript. Ison’s report sears the first impression; it left
the jury with the improper conclusion that it was an
unequivocal fact that Nation was owed 70.5% of the
commission for the transaction in dispute and that
Dorgan lied in saying anything otherwise.

Dorgan’s Br. at 20.

Under the circumstances of this case, we disagree. First, as we have

previously set forth at length, the admission of Dorgan’s deposition transcript was

at most harmless error relative to Nation’s breach of contract claim.

Second, even if Ison’s opinion set forth in her report that Nation was

owed 70.5% of the commission for the transaction in dispute was legally improper,

it was: (1) consistent with Dorgan’s own trial testimony that Harold had a set rate

that was based upon his level of experience, that he was compensating Harold at a

rate equivalent to roughly 69% of commissions received from his sales pre-2013,

and that more recently in 2015, Harold was compensated at a rate of roughly 70%;

(2) consistent with the course of dealing evidence presented at trial, which

indicated that in each of the sales Harold made in 2015, Harold received

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compensation equivalent to a range between 70.5 percent and 72 percent of the

gross commissions paid; and (3) consistent with Dorgan’s continued inability to

provide any examples supporting the existence of a course of dealing wherein he

would lower the expected rate of his salespersons’ compensation based upon their

“participation.” It was, in a word, cumulative.

Third, whether the jury believed Dorgan “lied” by saying Nation was

owed anything other than 70.5% of the commission is irrelevant to whether Dorgan

breached his contract with Harold. This is another example of harmless error. See

CR 61.01.

1. The trial court’s decision to exempt Nation’s expert witness from the requirements of sequestration was at most harmless error.

Nation’s expert, Ison, was permitted to listen to Dorgan’s trial

testimony. When Ison testified afterward, she then discussed part of what she had

heard in conjunction with the expert opinion she rendered. Dorgan argues the trial

court erred in doing so. The specifics of his argument are as follows:

Ison was permitted to listen to hours of Dorgan’s
testimony which, in fact, influenced her testimony. She
testifies, “Well, the deposition, as I stated before, was
very clear on it was determined that each and every case
when they brought the closing statement in. Here, when
I listened to him, I noticed he kept saying ‘well it was
case-by-case basis with each agent. Each agent was
different’ So to me, that was a little confusing. Didn’t
match.”

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However, Dorgan’s statement that commissions
differ on a case-by-case basis with each agent was
verbatim what he said during his deposition: “Each agent
is on an agent-by-agent basis.” Yet, Ison was influenced
enough by Dorgan’s testimony to exceed her scope as an
expert and incorrectly alert the jury to this so-called
discrepancy. Dorgan’s spoken testimony was not only
consistent with his deposition but was also corroborated
by the commission history. Ison appears to have been
keenly listening to Dorgan’s testimony in anticipation of
a discrepancy. Otherwise, Appellants see no reason to
misstate Dorgan’s testimony and prejudice Appellants.

Ultimately, Ison’s misstatement shows that she
was influenced enough by Dorgan’s testimony to compel
her to improperly represent his consistent statements as
lies and mislead the jury. Permitting Appellee’s expert to
remain in the courtroom was erroneous, unsupported by
legal principles, and resulted in prejudice to the
Appellants.

Dorgan’s Br. at 22-23 (record citations omitted).

The root of this issue is that Ison, in Dorgan’s view, falsely indicated

at trial that Dorgan’s deposition testimony about how he compensated his

salespeople differed from his trial testimony; and that in making this “false”

indication, Ison effectively painted Dorgan as untruthful. This is the sum-total of

why Dorgan believes the trial court’s decision not to sequester Ison resulted in

more than harmless error. And as before, Dorgan relies solely upon his lone

sentence of deposition testimony – i.e., his statement that “Each agent is on an

agent by agent basis” – to support that his deposition testimony was actually

consistent with his trial testimony.

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But considering what has been set forth previously, Ison made no

misstatement. In his deposition, Dorgan repeatedly denied that any of his

salespeople had any expectation of being paid anything until the moment he told

them – after the sale closed – what they would get. At trial, by contrast, he

repeatedly testified that all his salespeople expected to be paid at a set

individualized rate for their sales. Absent more – and Dorgan presents nothing

more – it is unnecessary to rehash more of what we have already stated on this

subject. This, too, is another example of what was at most harmless error. See CR

61.01.

II. CROSS-APPEAL NO. 2024-CA-1438-MR

Nation presents only one issue in his cross-appeal. He contends the

trial court erred by refusing to grant him prejudgment interest. The award or denial

of prejudgment interest is reviewed for abuse of discretion, “with the

understanding that a party is entitled to such interest on a liquidated damages

award.” Haney v. Stykes, 688 S.W.3d 561, 564 (Ky. App. 2023) (citation omitted).

“The test for abuse of discretion is whether the trial judge’s decision was arbitrary,

unreasonable, unfair, or unsupported by sound legal principles.” Id. (internal

quotation marks and citation omitted).

To review, the evidence adduced at trial supported that Nation was

entitled to receive compensation equivalent to 70.5% of the overall commission

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received for the Mt. Eden transaction, i.e., $45,825. Paragraph 8 of Harold’s

contract with Dorgan specified that Harold was to receive his compensation “as

soon as practicable after collection of such commissions from the party or parties

for whom the services may have been performed.” It is undisputed that the

“collection of such commission” relevant to this case occurred on March 29, 2016,

after the closing; and Dorgan does not argue it would have been impracticable to

have paid Harold’s Estate at that time.

We are left, then, with the trial court’s sole reason for refusing to

grant Nation prejudgment interest on this claim: It believed that because a trial was

necessary for Nation to prove it was entitled to compensation at a rate of 70.5%,

Nation’s claim against Dorgan was not “liquidated” and, therefore, prejudgment

interest was unwarranted.

The trial court abused its discretion. To explain why this is so, we

borrow from and incorporate the following language of Friction Materials Co.,

Inc. v. Stinson, 833 S.W.2d 388, 392 (Ky. App. 1992):

The trial court determined that [Nation] was entitled to
the commissions, and thus [Nation] was entitled to them
when they were earned on the sales, not merely when
[Nation] received a judgment in [Nation’s] favor. The
question is not so much whether a claim is liquidated or
unliquidated, but whether “justice and equity demand an
allowance of interest to the injured party. . . . Where
under a contract a debt is due at a certain time, both
reason and authority say that it carries interest from that
time.” Dalton v. Mullins, Ky., 293 S.W.2d 470, 477

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(1956). See also Finucane v. Prichard, Ky. App., 811
S.W.2d 348 (1991); Borden v. Martin, Ky. App., 765
S.W.2d 34 (1989). [Nation] was due [the] commissions
in [2016], and payment was long delayed. We believe
fairness dictates the additional compensation.

This is a breach of contract case, and although the
amount claimed was vigorously disputed, the amount
was readily ascertainable. Interest should follow as a
matter of course for what in substance is an unpaid debt.
The Restatement (Second) of Contracts § 354 provides:

(1) If the breach consists of a failure to pay a
definite sum in money or to render a performance
with fixed or ascertainable monetary value, interest
is recoverable from the time for performance on
the amount due less all deductions to which the
party in breach is entitled.

(2) In any other case, such interest may be allowed
as justice requires on the amount that would have
been just compensation had it been paid when
performance was due.

Whether this case is factually a subsection (1) or
(2) claim, we conclude that prejudgment interest should
be awarded.

Accordingly, with respect to Cross-Appeal No. 2024-CA-1438-MR,

we reverse.

III. CONCLUSION

Consistent with the foregoing, regarding the January 5, 2024

judgment of the Shelby Circuit Court, we AFFIRM IN PART, REVERSE IN

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PART, and REMAND regarding Appeal No. 2024-CA-1424-MR, and REVERSE

Cross-Appeal No. 2024-CA-1438-MR.

ALL CONCUR.

BRIEFS FOR BRIEFS FOR APPELLEE/CROSS-
APPELLANTS/CROSS- APPELLANT:
APPELLEES:
Katherine H. Whitten
Jason C. Vaughn C. Gilmore Dutton
Louisville, Kentucky Shelbyville, Kentucky

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