Appeals: KINDRED HOSPITALS LTC V. LUTRELL (SC; 4/20/2006)

KINDRED HOSPITALS LTC V. LUTRELL
APPEALS
2006-SC-000093-I.pdf
PUBLISHED
AFFIRMING (DENYING KINDRED’S CR  65.09 MOTION); SCOTT
4/14/2006

Kindred moved the trial court under KRS 417.050, part of the Kentucky Uniform Arbitration Act (KUAA) to dismiss or, in the alternative, stay proceedings pending arbitration of the parties’ controversy.  The trial court refused, finding Luttrell had no authority to bind her mother or her mother’s estate to arbitration when she placed her mother in Kindred’s nursing home.  Kindred appealed to the CA under CR 65.07, which the CA denied as having been improperly taken.  Kindred then appealed to the SOK under CR 65.09; the SOK found that Kindred had failed to show "extraordinary cause" as required and denied the motion.

The meat of this opinion does not deal with the substance of Kindred’s appeal, but with the SOK’s finding that the CA incorrectly applied the tenets of the KUAA in its ruling against Kindred.  The CA had held that CR 65.07 was not the proper mechanism for a party to appeal a trial court’s denial of a motion to stay pending arbitration.  The CA ruled that KRS 417.220(2)’s language, which provides that an appeal from a judgment "shall be taken in the manner and to the same extent as from orders or judgments in a civil action," requires a notice of appeal as if from a final judgment, rendering CR 65.07 inappropriate in such circumstances.  The SOK pointed out that state and federal courts have often found that denials of motions to compel arbitration and stay litigation are akin to denials of injunctions.
The SOK held that this appeal stemmed directly from the trial court’s denial of a motion made pursuant to KRS 417.050, and thus the appellate mechanism in KRS 417.220(2), though somewhat vague in its requirements, served as the appropriate basis for appeal in this case.  However, to require a notice of appeal and to rule in such a way as to foreclose the use of the appellate review mechanism provided by CR 65.07 in cases where the KUAA applies, as the CA did, is contrary to the language of KRS 417.220, i.e, "to the same extent as from orders or judgments in a civil action."  The SOK points out that nowhere in KRS 417.220 is there an explicit requirement that a party must submit a notice of appeal, nor do its terms dictate that such a notice is required.  Nor does KRS 417.220(2) restrict appeals of enumerated items in KRS 417.220(1) to one mechanism.  Rather, the statute recognizes that interlocutory relief may be afforded a party whose appeal is enumerated in KRS 417.220(1).  "Thus, it is of no consequence if a case is an employment arbitration dispute to which KUAA is inapplicable or a case where KUAA is applicable, such as the present one.  What matters is that the party bringing the appeal has met the requisite burden and has complied with whatever appellate mechanism is being utilized to contest the trial court’s decision.  Here, Kindered chose to use CR 65.07, and in doing so, it had a high burden to meet in order to obtain the relief requested."
The SOK pointed out that it recently held in Cavalier Homes of Alabama v. Coleman, 181 S.W.3d 558 (2005), that a party who sought extraordinary relief under CR 81 after a denial of a motion to stay pending arbitration could not do so because the form of relief sought was contrary to the statutory remedy allowed under KRS 417.220.  It noted that the appellant in Cavalier sought an original action for which KRS 417.220 gave no support.  The holding in the instant case doesn’t contradict Cavalier but rather extends its holding to acknowledge that parties may also utilize CR 65.07, where they can meet the "higher" burden, so that a request for interlocutory relief may be had as from orders or judgments in a civil action.
In sum:  a party may appeal the decision of a trial court that implicates any of the items in KRS 417.220(1) utilizing either a motion for interlocutory relief under CR 65.07 or a notice of appeal under CR 73, so long as that party fulfills the requirements and meets inthe burdens in so making an appeal.  HOWEVER, in the future, a party may choose ONLY ONE of these routes.   

Digested by Cherry Henault

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