THE SOMETIMES FUZZY DISTINCTION BETWEEN CIVIL AND CRIMINAL CASES – JAY MATHENY 

Jackie M. Matheny, Jr., Esq. Denton Law Firm, PLLC 555 Jefferson Street, Suite 301 Paducah, KY 42001 Phone: 270-450-8253

BLURRED LINES: THE SOMETIMES FUZZY DISTINCTION BETWEEN CIVIL AND CRIMINAL CASES

As an attorney engaged in civil practice, I receive a number of phone calls every day from people who have been aggrieved in some shape, form, or fashion by the wrongful acts of another. And, as an attorney in civil practice, it is my job to determine the best civil remedy, if any, in these situations. Occasionally, however, I receive a phone call from someone who has been aggrieved by the wrongful acts of another, and I ask myself, “Is that criminal in nature?”

The truth of the matter is that, sometimes, it is incredibly difficult to determine whether a case is purely civil in nature or whether a crime has actually been committed. I have never been a criminal prosecutor myself, but even prosecutors will tell you that this distinction is sometimes hard to make. And, prosecutors are often presented with factual scenarios which they themselves are surprised to learn have now been criminalized by statute.

In looking at this issue, it is important to note that nothing is a crime in Kentucky unless a statute has been enacted which makes it a crime. KRS 500.020 provides that, “[N]o act…shall constitute a criminal offense unless designated a crime or violation under this code or another statute of this state.” All of the things that we traditionally think of as being criminal acts (i.e., theft, burglary, etc.) were criminalized by statute long ago. However, within the last several decades, the Kentucky legislature has also criminalized many other things that traditionally allowed for only a civil remedy. In doing so, the Kentucky legislature has somewhat blurred the lines between civil and criminal cases. With that in mind, let’s take a look at some hypothetical fact patterns which could lead to both civil redress and/or criminal prosecution in Kentucky.

Hypothetical # 1: The Innocent Homeowner

John Q. Homeowner hires Kevin Contractor to build a deck at his home for the sum of $10,000.00 (which includes payment for labor and materials). Homeowner pays Contractor the full $10,000.00 up front, and Contractor builds the deck as promised. However, almost immediately after Contractor completes the deck, ABC Lumber Company asserts a materialman’s lien on Homeowner’s real property for the sum of $5,000.00 based upon Contractor’s failure to pay for materials used in the construction of Homeowner’s deck. And, now Contractor is nowhere to be found. What is Homeowner’s remedy here: criminal prosecution, a civil action, or perhaps both? The answer is: potentially both.

On the civil side, Homeowner could sue Contractor for indemnity as to the full amount of the lien. But, that’s only if Homeowner can find Contractor to serve him/her with process in the indemnity action. Homeowner could also file a bond in the county clerk’s office for double the amount of the lien which would, by operation of law (pursuant to KRS 376.100), release the lien.
But, the material supplier would still be able to file suit to enforce its claim against the bond, and Homeowner would, unfortunately, still be likely named as a party-defendant in any such action. With that said, perhaps the better remedy for Homeowner would be to pursue criminal charges against Contractor pursuant to KRS 376.990.

KRS 376.070(1) provides that any contractor who improves the property of another under such circumstances that a mechanic’s or materialman’s lien may be imposed on the property shall, from the proceeds of any payment received from the owner, pay in full all persons who have furnished material or performed labor on the property. KRS 376.990 states that “Any person who violates any of the provisions of…[KRS] 376.070 shall be guilty of a Class A misdemeanor.” See KRS 376.990(2). Thus, if Homeowner does elect to pursue criminal charges against Contractor in this factual scenario (assuming that law enforcement and the county attorney’s office elect to prosecute the case), then it is entirely possible that Contractor may be required, as part of the disposition of the criminal case, to remit payment to the material supplier in an amount sufficient to satisfy the materialman’s lien. This course of events would result in the release of the materialman’s lien against Homeowner’s property at no expense to Homeowner (which was likely the real intent behind the enactment of KRS 376.990 in the first place).

Hypothetical # 2: The Defrauded Judgment Creditor

Polly Plaintiff was seriously injured in a car accident as a result of Tammy Tortfeasor’s negligent operation of a motor vehicle. Plaintiff then files suit against Tortfeasor for money damages. Plaintiff ultimately obtains a civil judgment against Tortfeasor for money damages, including punitive damages. Tortfeasor immediately thereafter begins transferring all of her assets to family members for no value received. What is Plaintiff’s remedy here: civil or criminal (or both)? The answer here, again, is: potentially both.

Plaintiff could file suit against Tortfeasor to void all of Tortfeasor’s transfers under Kentucky’s Uniform Voidable Transactions Act (codified at KRS 378.005, et seq.). But, Plaintiff could also pursue criminal charges against Tortfeasor pursuant to KRS 517.070.

KRS 517.070 states that: “(1) A person is guilty of defrauding judgment creditors when he secretes, assigns, conveys or otherwise disposes of his property with intent to defraud a judgment creditor or to prevent that property from being subjected to payment of a judgment. (2) Defrauding judgment creditors is a Class A misdemeanor.” And, restitution could possibly be ordered in a criminal case against Tortfeasor (subject to certain limitations) pursuant to KRS Chapter 532 and/or KRS Chapter 533.

CONCLUSION

These are just two (2) hypothetical examples of wrongful acts which, on their face, would otherwise seem to result in only civil redress but have been criminalized by statute. However, there are many more examples of this under Kentucky law, including defrauding secured creditors, willfully removing a boundary line marker, and wrongful cutting of timber (just to name a few). This is not to say that, in every situation where it is available, a criminal remedy will (or even should) be applied. After all, prosecutors (and not private attorneys) in Kentucky have the ultimate say as to whether a case will be prosecuted. And, criminal prosecution is an extraordinary remedy. But, if available to an aggrieved party, criminal prosecution presents unique remedies that are not otherwise available in civil cases. One example of this is the fact that restitution in a criminal case is not ordinarily dischargeable in bankruptcy whereas a normal civil judgment might be. Additionally, criminal prosecution does not cost an aggrieved party anything to pursue, whereas pursuing a civil action will almost certainly result in a plaintiff incurring at least some costs or attorney’s fees. In any event, this much is clear: if you have been aggrieved by the wrongful act(s) of another, it may certainly be worth discussing your options with an attorney to determine the right course of action for you, as well as any drawbacks and/or limitations to the pursuit of any such action(s).

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