Court Opinion

ID: 5140540
Source: CourtListenerOpinion
Date Created: 2021-12-24 15:05:48.322367+00
Date Added: 2024-06-11T08:24:24.090099
License: Public Domain

RENDERED: DECEMBER 22, 2021; 10:00 A.M.
                   NOT TO BE PUBLISHED

            Commonwealth of Kentucky
                    Court of Appeals

                      NO. 2020-CA-1566-MR

CABINET FOR HEALTH AND FAMILY
SERVICES, DEPARTMENT FOR MEDICAID
SERVICES; ERIC FRIEDLANDER, IN HIS
OFFICIAL CAPACITY AS SECRETARY OF
THE CABINET FOR HEALTH AND FAMILY
SERVICES; AND LISA LEE, IN HER OFFICIAL
CAPACITY AS COMMISSIONER OF THE
DEPARTMENT FOR MEDICAID SERVICES                  APPELLANTS

            APPEAL FROM FRANKLIN CIRCUIT COURT
v.          HONORABLE PHILLIP J. SHEPHERD, JUDGE
                    ACTION NO. 20-CI-00290

HELP AT HOME, LLC                                     APPELLEE

                           OPINION
                          AFFIRMING

                          ** ** ** ** **

BEFORE: CLAYTON, CHIEF JUDGE; TAYLOR AND L. THOMPSON,
JUDGES.
TAYLOR, JUDGE: The Cabinet for Health and Family Services, Department for

Medicaid Services; Eric Friedlander, in his official capacity as Secretary of the

Cabinet for Health and Family Services; and Lisa Lee, in her official capacity as

Commissioner of the Department for Medicaid Services (collectively “appellants”)

appeal a November 10, 2020, Opinion and Order entered by the Franklin Circuit

Court. The court reversed a final order of the Secretary that dismissed an

administrative appeal filed by the appellee, Help at Home, LLC, and remanded for

further administrative proceedings. Finding no error, we affirm.

                                 BACKGROUND

             The Cabinet for Health and Family Services, Department for

Medicaid Services (DMS), is charged with administering Kentucky’s Medicaid

program and is responsible for recouping Medicaid overpayments made to

providers of Medicaid services. Appellee, Help at Home, LLC (HAH), is a

provider of Medicaid services in Kentucky. On June 8, 2018, DMS notified HAH

that it was pursuing a post-payment review regarding what it identified as having

been a potential $54,596 Medicaid overpayment to HAH. Its correspondence

directed HAH to either provide full repayment of that sum, or to file an

administrative appeal in accordance with the formal dispute resolution process

outlined in 907 Kentucky Administrative Regulation (KAR) 1:671 §§ 8 and 9.

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              Later that month, and pursuant to 907 KAR 1:671 § 8, HAH’s Chief

Operating Officer (COO), Rick Cantrell, made a written request on HAH’s behalf

for a dispute resolution meeting, contesting DMS’s position that an overpayment

had been made to HAH. Following the dispute resolution meeting, DMS notified

HAH in a letter dated August 16, 2018, that it was upholding its original decision

regarding the overpayment.

              On September 5, 2018, after HAH received DMS’s letter, Cantrell

(acting as HAH’s corporate representative, but not as HAH’s attorney) submitted a

written request on behalf of HAH for an administrative hearing as outlined in 907

KAR 1:671 § 9.1 Afterward, the Cabinet’s Division of Administrative Hearings

confirmed receipt of HAH’s request, and it contacted Cantrell to schedule a

prehearing telephonic conference. Cantrell corresponded with DMS’s counsel.

HAH later retained and was represented by counsel at the prehearing conference,

and at each of the several other prehearing conferences that followed. And, over

the course of the year or so of negotiations and administrative practice that

followed HAH’s request for an administrative hearing, the record does not indicate

that anyone from DMS took issue with the fact that HAH’s request for an

administrative hearing had come from a non-attorney.

1
 This is effectively an administrative appeal of the Cabinet for Health and Family Services,
Department for Medicaid Services’ dispute resolution process as provided for in 907 KAR 1:671
§§ 8 and 9.
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            However, that changed on August 2, 2019, when DMS moved to

dismiss HAH’s administrative appeal on precisely that ground. DMS asserted that

a request for an administrative hearing pursuant to 907 KAR 1:671 § 9, made on

behalf of another, qualified as the “practice of law” and could thus only be deemed

effective if made by a licensed attorney. It reasoned that because Cantrell was not

an attorney when he made the request on HAH’s behalf, the request was therefore

invalid, and HAH’s administrative action was therefore improper.

            The Secretary of the Cabinet ultimately agreed and entered a final

order granting DMS’s motion. HAH then sought review in Franklin Circuit Court,

which reversed and remanded for further proceedings. This appeal follows.

                            STANDARD OF REVIEW

            Judicial review of an administrative agency’s decision is generally

concerned with arbitrariness and is guided by Kentucky Revised Statutes (KRS)

13B.150:

            (2) The court shall not substitute its judgment for that of
            the agency as to the weight of the evidence on questions
            of fact. The court may affirm the final order or it may
            reverse the final order, in whole or in part, and remand
            the case for further proceedings if it finds the agency’s
            final order is:

                (a) In violation of constitutional or statutory
                    provisions;

                (b) In excess of the statutory authority of the agency;

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                (c) Without support of substantial evidence on the
                    whole record;
                (d) Arbitrary, capricious, or characterized by abuse of
                    discretion;

                (e) Based on an ex parte communication which
                    substantially prejudiced the rights of any party and
                    likely affected the outcome of the hearing;

                (f) Prejudiced by a failure of the person conducting a
                    proceeding to be disqualified pursuant to KRS
                    13B.040(2); or

                (g) Deficient as otherwise provided by law.

             To the extent questions of law arise out of an administrative

proceeding, the court’s review is de novo. Aubrey v. Off. of the Att’y Gen., 994

S.W.2d 516, 519 (Ky. App. 1998). In this case, the only issue before this Court is

whether a request for administrative appeal by a non-attorney on behalf of a

corporate entity constitutes the unauthorized practice of law, and thus warrants

dismissal of the administrative proceeding under KRS 13B.150. This issue is

clearly a question of law and our review proceeds de novo.

                                    ANALYSIS

             As noted, the primary issue on appeal is whether the request for a

hearing by HAH’s chief operating officer constituted the unauthorized practice of

law, and thus requires dismissal of the administrative appeal. The practice of law

is defined as follows:

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             The practice of law is any service rendered involving
             legal knowledge or legal advice, whether of
             representation, counsel or advocacy in or out of court,
             rendered in respect to the rights, duties, obligations,
             liabilities, or business relations of one requiring the
             services. But nothing herein shall prevent any natural
             person not holding himself out as a practicing attorney
             from drawing any instrument to which he is a party
             without consideration unto himself therefor. An
             appearance in the small claims division of the district
             court by a person who is an officer of or who is regularly
             employed in a managerial capacity by a corporation or
             partnership which is a party to the litigation in which the
             appearance is made shall not be considered as
             unauthorized practice of law.

Kentucky Rules of the Supreme Court (SCR) 3.020. This case does not involve a

natural person representing himself or herself, nor does it involve a small claims

court; therefore, our focus will be on the first sentence of SCR 3.020.

             Appellant’s primary argument relies on Kentucky State Bar

Association v. Henry Vogt Machine Co., Inc., 416 S.W.2d 727 (Ky. App. 1967);

Bobbett v. Russellville Mobile Park, LLC, No. 2007-CA-000684-DG, 2008 WL

4182001 (Ky. App. Sep. 12, 2008); Nichols v. Kentucky Unemployment Insurance

Commission, No. 2017-CA-001156-MR, 2019 WL 1868589 (Ky. App. Apr. 26,

2019), disc. rev. granted (Ky. Jul. 1, 2020), ordered not to be published (Ky. Jul. 1,

2020), and Kentucky Bar Association, Unauthorized Practice of Law Opinion

KBA U-64 (2012).

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              We have thoroughly reviewed the authority cited, including the KBA

opinion referenced above. Based on our review, we find this authority

distinguishable, with the exception of Nichols as discussed below, and otherwise

not applicable to the facts of this case. Accordingly, we conclude that the letter

Cantrell sent to request an administrative hearing for HAH did not constitute the

practice of law.

              In Henry Vogt Machine Co., Inc., 416 S.W.2d 727, a non-attorney

raised objections and questioned witnesses during an administrative hearing. This

is clearly the practice of law because it requires a person to know the legal rules

and procedures regarding what is objectionable at an evidentiary hearing and how

to question witnesses. In our case, subsequent to Cantrell’s request for a hearing

pursuant to 907 KAR 1:671 § 9, HAH retained counsel to participate in the

proceedings, including the administrative hearing. And, a non-attorney did not ask

questions or make objections during an administrative hearing in this case.

              In Bobbett, 2008 WL 4182001, a forcible detainer was filed by a non-

lawyer to evict a tenant from a mobile home park that was doing business as a

limited liability company. A forcible detainer is a legal pleading, similar to a

complaint, that is filed in a court of law. A forcible detainer complaint initiates a

legal action against a third party; therefore, it is subject to the rules of civil

procedure, including CR 11. As the Bobbett case involved court proceedings that

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were subject to Kentucky Rules of Civil Procedure (CR) 11, the detainer complaint

had to be signed by an attorney representing the limited liability company. Filing

the detainer clearly involved the practice of law because it required knowledge of

the civil rules and was filed in a court of law. Here, Cantrell’s letter of September

5, 2018, requesting an administrative hearing was not filed in a court of law. The

request was also not subject to CR 11 because administrative actions are not

subject to the civil rules until they are heard on appeal by a court. CR 1(2); Bd. of

Adjustments of City of Richmond v. Flood, 581 S.W.2d 1, 2 (Ky. 1978); Dep’t for

Human Resources v. Redmon, 599 S.W.2d 474, 475 (Ky. App. 1980). The letter

also did not initiate a civil action against a third party; it simply constituted the

initiation of an administrative appeal in accordance with the Cabinet’s regulations.

             As for Nichols, this case also concerned a non-attorney representing a

corporation during an administrative hearing. In Nichols, a non-attorney

participated in an unemployment hearing on behalf of a corporation and asked a

witness questions. This Court held that corporations must be represented by

attorneys in employment hearings. The Kentucky Supreme Court recently

reversed this Court in Kentucky Unemployment Insurance Commission v. Nichols,

___ S.W.3d ___ (Ky. 2021) (final on November 18, 2021). In Nichols, the

Supreme Court did not reach the merits of the appeal based on a standing issue, but

did address similar issues in the Court of Appeals’ interpretation of Turner v.

                                          -8-
Kentucky Bar Association, 980 S.W.2d 560 (Ky. 1998). Id. at *5. Relevant to this

appeal, the Supreme Court observed: “If no legal advice is being given or legal

rights are being adjudicated, it is unlikely this court would find that the non-

attorney is engaging in the practice of law.” Id.

             Finally, as to the KBA opinion, it is only advisory and not binding on

this Court. Further, while it does state that a non-attorney cannot initiate an

administrative action on behalf of a corporation, the body of the opinion does not

explain this reasoning. The body of the opinion analyzes and cites to case law

which concerns a non-attorney answering legal questions, a non-attorney

participating in an administrative hearing, or a non-attorney drafting legal

documents, like a mortgage and bankruptcy documents. The KBA opinion deals

with issues more complex than sending a two-sentence letter as is the case here.

             Based on the foregoing, we conclude that Cantrell was not engaged in

the practice of law when he requested an administrative hearing on behalf of HAH.

The letter drafted by Cantrell did not require any special legal knowledge and did

not give any legal advice. The administrative regulation does not require any

specific format other than the request be in writing. Nor does the regulation

require the request to be submitted by an attorney. The request was not filed in a

court of law and thus did not trigger application of the rules of civil procedure.

Likewise, DMS had informed HAH in writing that all it needed to do to request a

                                         -9-
hearing was to send a letter to specific Cabinet departments. DMS then freely gave

the necessary mailing addresses to HAH. As stated previously, sending this

request required no special skill; therefore, it cannot be considered the practice of

law.

                 While this Court agrees with the proposition that corporations and

business entities must be represented by counsel in adjudicatory hearings, there is

no legal or administrative basis to support the proposition that the initial request for

an administrative hearing must be filed by a lawyer under the regulation.

                                     CONCLUSION

                 The Cabinet raises other issues on appeal, but they are moot based on

our conclusion that HAH’s COO, Cantrell, was not practicing law when he made

his request for a hearing. Based on the foregoing, we affirm the judgment of the

circuit court.

                 ALL CONCUR.

 BRIEFS FOR APPELLANTS:                       BRIEF FOR APPELLEE:

 Shaun T. Orme                                R. Morgan Salisbury
 Frankfort, Kentucky                          Lexington, Kentucky

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