Court Opinion

ID: 7802014
Source: CourtListenerOpinion
Date Created: 2022-08-19 14:05:38.293976+00
Date Added: 2024-06-11T16:29:22.881316
License: Public Domain

RENDERED: AUGUST 12, 2022; 10:00 A.M.
                       NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                             NO. 2021-CA-0694-MR

CHEROKEE PARK
REHABILITATION, LLC, AND MICK
VUJANOVIC, IN HIS CAPACITY AS
ADMINISTRATOR OF CHEROKEE
PARK REHABILITATION                                                APPELLANTS

               APPEAL FROM JEFFERSON CIRCUIT COURT
v.             HONORABLE A. C. MCKAY CHAUVIN, JUDGE
                       ACTION NO. 19-CI-003752

COLLINS CALLENS, EXECUTOR
FOR THE ESTATE OF ROBERT
CALLENS AND DEBRA TROWELL,
AS EXECUTOR FOR THE ESTATE
OF ROBERT CALLENS                                                    APPELLEES

                                   OPINION
                                  AFFIRMING

                                  ** ** ** ** **

BEFORE: CLAYTON, CHIEF JUDGE; ACREE AND TAYLOR, JUDGES.

TAYLOR, JUDGE: Cherokee Park Rehabilitation, LLC, and Mick Vujanovic, in

his capacity as administrator of Cherokee Park Rehabilitation, LLC, bring this
appeal from a May 19, 2021, Opinion and Order of the Jefferson Circuit Court

denying a motion to compel arbitration of an action initiated by Collins Callens

and Debra Trowell, Co-Executors of the Estate of Robert Callens (Estate). We

affirm.

             On December 31, 2010, Robert Callens executed a General Power of

Attorney that appointed his son, Collins Callens, as his agent and also appointed

his daughter, Debra Trowell, as his successor agent. In June of 2017, Robert was

admitted to a long-term care facility in Jefferson County owned by LP Louisville

Cherokee Park, LLC, which was commonly known as Signature Healthcare

(hereinafter referred to as Signature Healthcare). During the admission process,

Debra signed several documents. Some of the documents were apparently signed

electronically, and some were signed in writing. Relevant herein is a document

Debra purportedly signed electronically and is titled “Agreement to Informally

Resolve and Arbitrate All Disputes” (Arbitration Agreement). At the top of the

Arbitration Agreement, it stated, “Please know we require all new residents and/or

their legal representatives to read, agree, and sign this Agreement for admission.

Please know you can choose care at another facility if you do not wish to sign.”

             Several months after Robert’s admission to Signature Healthcare,

there was a transfer of ownership of the facility. More specifically, ownership of

Signature Healthcare was transferred to Cherokee Park Rehabilitation, LLC

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(Cherokee Park Rehabilitation) by an Operations Transfer Agreement. The

Operations Transfer Agreement was executed on January 5, 2018, and set forth the

provisions of such transfer of ownership.

             On July 14, 2018, while a resident of Cherokee Park Rehabilitation,

Robert suffered significant injuries. The record reveals that Robert was in a

wheelchair and was being pushed by an aide. However, Robert’s foot was

dragging on the floor, which caused him to fall forward out of the wheelchair.

Three days later, Robert was taken to the hospital where it was discovered he had

two vertebrae fractures and a closed head injury. Robert was released from the

hospital to another long-term care facility on August 12, 2018. Robert ultimately

passed away on November 24, 2018.

             On June 18, 2019, the Estate filed the underlying civil action in

Jefferson Circuit Court (Action No. 19-CI-003752) against, inter alios, Cherokee

Park Rehabilitation. In the complaint, the Estate asserted claims of negligence,

medical negligence, and corporate negligence related to Robert’s injuries from the

July 14, 2018, incident. Thereafter, Cherokee Park Rehabilitation filed a Motion to

Compel Limited Alternate Dispute Resolution (ADR) Discovery. Once the limited

discovery had been completed, Cherokee Park Rehabilitation filed a motion to

compel arbitration and sought to enforce the Arbitration Agreement originally

entered into with Signature Healthcare. By Opinion and Order entered May 19,

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2021, the circuit court denied the motion to compel arbitration. The circuit court

concluded that the Arbitration Agreement was “unenforceable.” May 19, 2021,

Opinion and Order at 4. This appeal follows.1

               Cherokee Park Rehabilitation argues on appeal that the circuit court

erred by determining that the Arbitration Agreement was invalid and

unenforceable. For the following reasons, we disagree.

               It is well-settled that a party seeking to compel arbitration has the

initial burden to demonstrate that a valid arbitration agreement exists between the

parties. Ping v. Beverly Enters., Inc., 376 S.W.3d 581, 590 (Ky. 2012); Golden

Gate Nat’l Senior Care, LLC v. Rucker, 588 S.W.3d 868, 870 (Ky. App. 2019);

Cambridge Place Group, LLC v. Mundy, 617 S.W.3d 838, 840 (Ky. App. 2021).

And, to determine whether a valid and enforceable arbitration agreement exists, we

rely upon state contract law. Ping, 376 S.W.3d at 590. Our review of a circuit

court’s interpretation and construction of a contract is a matter of law and is

reviewed de novo. Lynch v. Claims Mgmt. Corp., 306 S.W.3d 93, 96 (Ky. App.

2010). However, in the event the circuit court engages in fact finding to reach its

decision, we review those findings of fact under the clearly erroneous standard.

Kentucky Rules of Civil Procedure 52.01; Kindred Nursing Centers Ltd. P’ship v.

1
 We observe that an interlocutory order denying arbitration is subject to appeal pursuant to
Kentucky Revised Statutes 417.220(1)(a).

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Sloan, 329 S.W.3d 347, 348 (Ky. 2010). Finally, we may affirm the circuit court

for any reason set forth in the record. See Phillips v. Rosquist, 628 S.W.3d 41, 47

(Ky. 2021).

              Under the terms of the Arbitration Agreement, Signature Healthcare

and/or its “affiliates, parents, officers, agents, owners, and assigns” were

specifically identified as parties thereto and entitled to enforce same. Arbitration

Agreement at 1. Cherokee Park Rehabilitation was not an original party to the

Arbitration Agreement but claimed that the Arbitration Agreement was assigned to

it by the Operations Transfer Agreement. Appellant’s Brief at 6.

              The Operations Transfer Agreement was entered into by Signature

Healthcare and Cherokee Park Rehabilitation. Section 3.05 is entitled Contracts,

and it provides that Cherokee Park Rehabilitation would assume certain contracts

(Assumed Contracts) entered into originally by Signature Healthcare. These

Assumed Contracts were exhaustively listed in Schedule 3.05, which was attached

to the Operations Transfer Agreement. As to Assumed Contracts, it was

specifically provided that these contracts would be “assigned to, and assumed by

Cherokee Park [Rehabilitation].” We have carefully reviewed Schedule 3.05, and

it is clear that the Arbitration Agreement was not listed thereupon. In fact, there

was no mention of any arbitration agreements being transferred by the Operations

Transfer Agreement.

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                 The Kentucky Supreme Court has recognized that a valid assignment

takes place “when the assignor intends to assign a present right, identifies the

subject matter assigned, and divests itself of control over the subject matter

assigned.” Davis v. Scott, 320 S.W.3d 87, 90 (Ky. 2010). To have validly

assigned the Arbitration Agreement, it was incumbent that the assignment

(Operations Transfer Agreement) identify the subject matter assigned (Arbitration

Agreement). As previously set forth, the Arbitration Agreement was not listed as

an Assumed Contract and was not referenced anywhere in the Operations Transfer

Agreement. Furthermore, there was no reference in the Operations Transfer

Agreement to any arbitration agreement. And neither Signature Healthcare nor

Cherokee Park Rehabilitation gave notice to the Callens of the assignment.

                 Cherokee Park Rehabilitation claims it was assigned the Arbitration

Agreement under the Operations Transfer Agreement; however, a reading of the

Operations Transfer Agreement does not support this claim. As hereinbefore

stated, Cherokee Park Rehabilitation bears the burden of demonstrating that a valid

Arbitration Agreement existed between the parties; Cherokee Park Rehabilitation

has failed to demonstrate same. For this reason, we conclude that the circuit court

did not commit reversible error by denying Cherokee Park Rehabilitation’s motion

to compel arbitration.2 See Phillips, 628 S.W.3d at 47.

2
    We view any remaining contentions of error raised in this appeal to be moot or without merit.

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             For the foregoing reasons, the Opinion and Order of the Jefferson

Circuit Court is affirmed.

             ALL CONCUR.

BRIEFS FOR APPELLANTS:                   BRIEF FOR APPELLEES:

Donald L. Miller II                      Tad Thomas
Brandon C.R. Sword                       Lindsy Lopez
Alexandria C. Whittington                Louisville, Kentucky
Justin A. Baxter
Louisville, Kentucky

ORAL ARGUMENT FOR                        ORAL ARGUMENT FOR
APPELLANTS:                              APPELLEES:

Donald L. Miller II                      Lindsy Lopez
Louisville, Kentucky                     Louisville, Kentucky

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