Background
Leah D. Grobler obtained a mortgage loan in 2007 that was later assigned to Kentucky Housing Corporation. Grobler and her husband entered into a loan modification agreement with KHC in 2016. After KHC alleged that they defaulted, it filed a foreclosure complaint in Boone Circuit Court in October 2024. The court entered summary judgment and an order of sale for KHC on January 28, 2025, and Grobler did not appeal that judgment.
Grobler subsequently moved to reverse the orders or dismiss the case for lack of subject-matter jurisdiction and sought leave to amend under Kentucky Rule of Civil Procedure 60.02(b), claiming newly discovered evidence showed that the IRS had cancelled the debt. The circuit court denied relief, finding that KHC’s proof concerning the note, mortgage, loan modification, and consideration was unrebutted. On appeal, the Court of Appeals limited its review to the April 23, 2025 order denying Grobler’s post-judgment motions.
The Court’s Holding
The Court of Appeals affirmed. Because Grobler’s brief cited multiple nonexistent cases and used several real cases for propositions they did not support, the court reviewed her arguments only for manifest injustice. It held that Boone Circuit Court had subject-matter jurisdiction over the foreclosure action because Kentucky circuit courts hear both legal and equitable claims and KRS 426.005 authorizes a mortgage holder to seek a judgment and sale of mortgaged property.
The court distinguished subject-matter jurisdiction from standing and held that Grobler waived her argument that KHC lacked standing by failing to raise it below. It also rejected her contention that the circuit court failed to address the purported Form 1099-C. The circuit court had expressly found that the document was plainly not issued by the IRS and questioned both Grobler’s sworn claim of authenticity and the premise that the IRS could cancel her debt to KHC. Denying relief based on that purported newly discovered evidence did not result in manifest injustice.
Key Takeaways
- Kentucky circuit courts have subject-matter jurisdiction over mortgage-foreclosure actions, including claims seeking equitable relief.
- Standing and subject-matter jurisdiction are distinct, and a statutory-standing defense may be waived if it is not timely raised.
- Substantive appellate-rule violations, including citations to nonexistent authority, may cause the court to review asserted errors only for manifest injustice.
Why It Matters
The decision illustrates the consequences of unreliable legal citations in an appellate brief, even when the litigant is proceeding without counsel. Although pro se litigants receive some leniency, they remain subject to Kentucky’s appellate rules.
It also confirms that recasting a standing objection as a jurisdictional challenge does not avoid waiver. Here, the circuit court had authority to hear the foreclosure case, while Grobler’s separate challenge to KHC’s standing came too late.