Thursday, July 9, 2020

Lack of Capacity is an Affirmative Defense

Lack of Capacity is an Affirmative Defense

      The recent decision of the Kentucky Court of Appeals affirmed the prior law to the effect that a claim of lack of capacity to bring a suit is an affirmative defense that must be pled in the this first responsive pleading. Lamar v. Unidentified Individuals Holding Themselves Out as The Trustees of Center Street Baptist Church, an Unincorporated, Voluntary Association, No. 2018-CA-001708-MR, 2020 WL 3124678 (Ky. App. June 12, 2020). 

      This decision arose out of the disputes between a pastor, Lamar, and the church he was hired to serve, Center Street Baptist Church in Owensboro. After a variety of disputes and disagreements between the trustees and Lamar, the trustees filed a complaint against him. Lamar did not, on a timely basis or otherwise, file an answer to that complaint, later asserting that he did not believe he needed to do so consequent to a conversation with the plaintiffs’ counsel. Eventually, the plaintiffs moved for a default judgment, which was entered. Thereafter, acting pro se, Lamar asked the court to vacate the default judgment, which request was denied. Still later he hired counsel who again petitioned that the default judgment set aside and for the first time asserting “that the judgment was void because the church could not sue in its own name since it is an unincorporated association, not a legal person.” After a hearing, the motion to set aside the default judgment was again denied, with this appeal following. 

       In addition to referencing the Kentucky Uniform Unincorporated Nonprofit Association Act, Lamar argued: 

That the church is an unincorporated entity which has not filed a certificate of association with the Kentucky Secretary of State. Therefore, he contends that the church is barred from the right to sue or be sued in its own name pursuant to KRS Chapter 273 As a result, Lamar claims there was no legal person acting as a party-plaintiff in the underlying action. 2020 WL 3124678, *3.
      As did the trial court below, the Court of Appeals held that the argument of lack of capacity was waived, citing C.R. 9.01 and Edwards v. Headcount Management, 421 S.W.3d 403, 405 (Ky. App. 2014), the latter cited for: 

[A]lthough an objection to a parties’ capacity … is not technically speaking an affirmative defense, it can be analogized to an affirmative defense and treated as waived if not asserted by an initial responsive pleading, subject, of course, to the liberal pleading amendment policy of Rule 15. To assert capacity as a defense, whether the basis of that assertion is a plaintiff’s capacity to bring suit or a defendant’s capacity to be sued, compliance with CR 9.1 is compulsory and non-negotiable. Id., (bracketed language, ellipses and italics in original).
      Ultimately, the denial of relief from the default judgment was affirmed.

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