Kentucky Court of Appeals Decisions (Minutes ) for October 11, 2013 (Nos. 957-977); 21 decisions announced with 2 decisions designated “To Be Published”). For a copy of the minutes filed at the AOC web site, click here.
Short summary of the published decisions for this week are (click on the link for the full text of the decision from AOC):
970. Commercial Law. Perfecting Security Interest & Collateral applying “inquiry test”.
Bishop vs. Alliance Banking Co.
COA, Pub. 10/11/2013
TAYLOR, JUDGE: Richard Bishop brings this appeal from a September 7, 2012, summary judgment of the Estill Circuit Court in favor of Alliance Banking Company (Alliance Bank). We affirm.
Bishop contends that the circuit court erred by determining that the financing statement sufficiently described the Case backhoe and that Alliance Bank held a perfected security interest in the Case backhoe. For the following reasons, we disagree.
Under the Kentucky Uniform Commercial Code (U.C.C.), a description of collateral is sufficient “if it reasonably identifies what is described” in the financing statement or security agreement filed with the Secretary of State. KRS 355.9-108(1); KRS 355.9-504. To determine whether collateral is so reasonably identified, the Court utilizes an “inquiry test:”
[A] description of collateral is sufficient for either a security agreement or a financing statement if it puts subsequent creditors on notice so that, aided by inquiry, they may reasonably identify the collateral involved.
Nolin Prod. Credit Ass’n v. Canmer Deposit Bank, 726 S.W.2d 693, 697 (Ky. App. 1986).
In utilizing the inquiry test herein, the record reveals that Alliance Bank filed a financing statement with the Secretary of State on February 5, 2010.
975. Power of attorney included authority to sign nursing home agreement to arbitrate disputes.
Kindred Healthcare, Inc. vs. Cherolis
COA, PUB 10/11/2013
MAZE, JUDGE: Kindred Healthcare, Inc. and associated entities (collectively “Kindred”) appeal from an order of the Daviess Circuit Court denying its motion to compel arbitration of claims brought by Artie Cherolis, as Executrix of the Estate of Thelma Fuqua, Deceased. Kindred argues that the trial court erred in finding that Cherolis lacked authority under a power of attorney to execute an arbitration agreement on her mother’s behalf. Kindred also contends that the restrictive interpretation of an agent’s authority to enter into arbitration contracts violates the Kentucky Uniform Arbitration Act, the Federal Arbitration Act, and Section 250 of the Kentucky Constitution. We conclude that the facts of this case are distinguishable from those of the recent decision by the Kentucky Supreme Court in Ping v. Beverly Enterprises, 376 S.W.3d 581 (Ky. 2012), because the power of attorney in this case permitted Cherolis to execute the arbitration agreement. Consequently, the trial court erred by denying Kindred’s motion to compel arbitration. Hence, we reverse and remand for additional proceedings.