Jackson v. Mackin
2008-CA-000344 01/16/2009 2009 WL 103230
Opinion by Judge Taylor; Judges Moore and VanMeter concurred.
The Court reversed and remanded an order of the circuit court dismissing appellant’s complaint alleging that appellee made false or reckless material misrepresentations in the sale of a home. The Court first held that appellant could bring the action under the contract after the deed had been properly delivered and, because the complaint primarily sounded in fraud, appellant sufficiently asserted claims that survived the merger doctrine. The Court then held that the contract terms permitting “binding arbitration” between the parties were not required to be asserted as an affirmative defense under the “arbitration and award” provision of CR 8.03 in a response to a complaint filed as a result of a dispute arising from the contract. CR 8.03 contemplates that “arbitration and award” is an affirmative defense only in those instances where a dispute has previously been submitted to arbitration and a final award has been made. Even so, the Court held that because appellee failed to comply with the provision in the contract providing that notice of demand for arbitration must be made in writing not more than one year after the dispute arose and further failed to comply with KRS 417.060(1) and (3) by not requesting the court to refer the matter to arbitration in a timely fashion, his action constituted a waiver of any arbitration rights under the contract. The Court finally held that the trial court did not lose subject matter jurisdiction as a result of the arbitration clause and its conclusion to dismiss the action due to appellant’s failure to seek enforcement of the arbitration provision more than a year after the dispute between the parties had arisen was clearly erroneous and dismissal of the case was an abuse of discretion. The Court also held that appellee’s failure to file a protective cross-appeal to properly preserve the issue of whether the trial court could have granted summary judgment on the merits precluded review of that issue.