Background
The Commonwealth sued investment adviser R.V. Kuhns & Associates and related individuals, collectively RVK, and actuarial-services provider Cavanaugh Macdonald Consulting, LLC and related individuals, collectively CavMac. The claims arose from alleged misconduct surrounding the Kentucky Retirement System’s funding crisis and included breach of fiduciary duty, civil conspiracy, aiding and abetting breach of fiduciary duty, and aiding and abetting breach of trust.
The Commonwealth filed its action in 2020 after the Kentucky Supreme Court ordered dismissal of an earlier suit brought by public employees, known as the Mayberry plaintiffs, for lack of constitutional standing. The Franklin Circuit Court dismissed all claims against RVK and CavMac as untimely, applying the one-year professional-services limitations period to RVK and concluding that even a five-year period would not save the claims against CavMac.
The Court’s Holding
The Court of Appeals held that Kentucky’s one-year statute of limitations for claims arising from professional services, KRS 413.245, did not apply to either RVK or CavMac. The statute covers services rendered in professions required to be licensed in Kentucky. Actuaries are not required to be licensed, and investment advisers are required to be registered rather than licensed; the court concluded that registration and licensure are not interchangeable.
The court nevertheless affirmed dismissal of the civil-conspiracy claim because it was subject to a one-year limitations period and the complaint alleged no conspiratorial act during the year preceding the Commonwealth’s 2020 filing. It reversed dismissal of the breach-of-fiduciary-duty and aiding-and-abetting-fiduciary-duty claims because the complaint alleged at least some misconduct within their five-year limitations period. It also reinstated the aiding-and-abetting-breach-of-trust claims, holding that the ten-year catchall period applied and that the complaint alleged conduct within that period.
The Commonwealth could not use Kentucky’s savings statute to relate its claims back to the Mayberry plaintiffs’ 2017 complaint. Because those plaintiffs lacked constitutional standing, their complaint was a legal nullity that could not preserve claims for a later, proper plaintiff. The surviving claims therefore had to be timely based on the Commonwealth’s own 2020 filing.
Key Takeaways
- KRS 413.245 applies only to services rendered in professions that Kentucky requires to be licensed; professional registration alone is insufficient.
- Aiding-and-abetting claims involving a pension-based breach of trust are governed by the ten-year catchall limitations period because pension trusts are excluded from Kentucky’s Uniform Trust Code and no specific limitations provision clearly controls.
- A later plaintiff cannot invoke the savings statute to relate back to a complaint filed by plaintiffs who lacked constitutional standing, but allegations of conduct within the independently applicable five- or ten-year periods can survive a motion to dismiss.
Why It Matters
The decision revives most of the Commonwealth’s claims against the actuarial and investment advisers while leaving the civil-conspiracy claim dismissed. It also clarifies that Kentucky’s professional-services limitations statute turns on mandatory licensure, not whether an occupation is commonly considered professional or is subject to registration.
The ruling is limited to whether the claims were facially time-barred at the pleading stage. The court expressed no view on their merits and left the parties free on remand to challenge claims based on conduct outside the applicable limitations periods or on other grounds consistent with the opinion.