Date: 06-14-2001

Case Style: Wiley v. Adkins

Case Number: 1999-SC-0985-DG

Judge: Wintersheimer

Court: Supreme Court of Kentucky

Plaintiff's Attorney: John David Preston of Perry, Preston & Miller, Paintsville, Kentucky

Defendant's Attorney: Debra Hembree Lamber, Mt. Vernon, Kentucky; Joseph R. Lane of Pillersdorf, DeRossett & Barrett, Prestonsburg, Kentucky; and David H. Steele, Mt. Vernon, Kentucky

Description: This appeal is from a decision of the Court of Appeals affirming a judgment of the Knox Circuit Court awarding $2,188,950 in damages in a class action lawsuit for alleged fraud in the operation of a proprietary business school.

The questions presented are whether the trial judge erred in maintaining this action as a class action and instructing the jury as to all plaintiffs as the members of one class; whether the trial judge erred in requiring Wiley to proceed to trial on the issue of liability when the order of the court stated that the case would be tried only as to the codefendant and when Wiley allegedly had insufficient notice of the trial date to be able to prepare; and whether the trial judge erred in failing to grant a directed verdict and in instructing the jury on damages; and whether the trial judge properly instructed the jury on punitive damages.

Wiley was the proprietor of Excel College, an incorporated business school in Corbin. In 1990, a group of former students brought a civil action alleging that Wiley and the college had defrauded them. At the trial of the case, there was an indication that there were 308 such students and a list prepared by Wiley indicates that there may have been at one time or another as many as 378 students. The plaintiffs amended their complaint to add Huntington Federal Savings and Loan Association as a defendant, claiming that it had made federally insured student loans to a majority of the plaintiffs while knowing that Wiley was committing fraud.

In 1992, Wiley’s attorneys were permitted to withdraw and he did not retain new counsel, but moved to Texas and opened another school, neglecting to inform anyone of his new address. Although Wiley could not be found, the case continued against the bank. Over the objection of the bank, the trial court certified the case as a class action. In August of 1997, the trial judge entered an order scheduling trial for November 17, 1997. On October 22, the judge entered an order stating that the November 17th trial would be bifurcated and that the first phase would address the liability of the bank and the second phase, if required, would consider the issues of individual reliance by the plaintiffs and damages.

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Click the case caption above for the full text of the Court's opinion.

Outcome: Reversed and remanded.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None