Court Opinion

ID: 3196426
Source: CourtListenerOpinion
Date Created: 2016-04-21 15:05:00.898827+00
Date Added: 2024-06-11T14:37:09.423620
License: Public Domain

IMPORTANT NOTICE
    NOT TO BE PUBLISHED OPINION

THIS OPINION IS DESIGNATED "NOT TO BE PUBLISHED."
PURSUANT TO THE RULES OF CIVIL PROCEDURE
PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C),
THIS OPINION IS NOT TO BE PUBLISHED AND SHALL NOT BE
CITED OR USED AS BINDING PRECEDENT IN ANY OTHER
CASE IN ANY COURT OF THIS STATE; HOWEVER,
UNPUBLISHED KENTUCKY APPELLATE DECISIONS,
RENDERED AFTER JANUARY 1, 2003, MAY BE CITED FOR
CONSIDERATION BY THE COURT IF THERE IS NO PUBLISHED
OPINION THAT WOULD ADEQUATELY ADDRESS THE ISSUE
BEFORE THE COURT. OPINIONS CITED FOR CONSIDERATION
BY THE COURT SHALL BE SET OUT AS AN UNPUBLISHED
DECISION IN THE FILED DOCUMENT AND A COPY OF THE
ENTIRE DECISION SHALL BE TENDERED ALONG WITH THE
DOCUMENT TO THE COURT AND ALL PARTIES TO THE
ACTION.
                                                     RENDERED: MARCH 17, 2016
                                                         NOT TO BE PUBLISHED

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                                 2015-SC-000569-I        L1    Li 1_1              [1=3
NATIONAL GEOGRAPHIC SOCIETY;
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NGC NETWORK, LLC                                                        APPELLANTS

                    ON APPEAL FROM COURT OF APPEALS
V.                      CASE NO. 2015-CA-000648-I
                   HARLAN CIRCUIT COURT NO. 15-CI-00012

JOSEPH GRIESHOP; MARVIN J. LIPFIRD                                      APPELLEES

                   MEMORANDUM OPINION OF THE COURT

                          VACATING AND REMANDING

       In defending against a defamation claim, the National Geographic Society

sought to enforce the terms of an arbitration agreement that it claimed

governed the claim. The trial court refused to compel arbitration on the ground

that no valid contract had been formed. The Court of Appeals denied

interlocutory relief without addressing the contract-formation question on the

ground that National Geographic had failed to allege, much less prove,

irreparable injury. May an appellate court refuse to grant interlocutory relief in

such circumstances without examining the trial court's conclusion that there

was no valid contract? It may not. Our authorities are clear that irreparable

injury is proven if the trial court erred in finding no valid contract. For that
reason, the Court of Appeals' order is vacated and this matter is remanded for

further proceedings.

                                   I. Background

      In 2013, National Geographic was filming a "reality" television show titled

Kentucky Justice about law-enforcement in Harlan County, Kentucky. At the

time, Joseph Grieshop was the Harlan County Judge/Executive. On April 18,

2013, he signed a document titled "Location and Personal Release" allowing

National Geographic to film at the "courtroom at the Harlan County

Courthouse to include the roof."

      Although Grieshop claims he informed National Geographic's agent at

that time that he did not want to be filmed, the release also grants National

Geographic permission to "photograph and record [his] likeness and activities"

and "to use and re-use, publish and re-publish, and modify or alter the

Image(s) taken during the Shoot in the Assignment." Among other things,

Grieshop agreed to "waive [his] right to inspect or approve any editorial text or

advertising that is used in connection with the Images," and to "release and

discharge [National Geographic] ... from any and all claims arising out of use of

the Images for the purposes described above, including any claims for

misappropriation of property, libel, invasion of property, or other tortious act."

The release also stated: "In addition, neither I nor any other party having an

interest in the Location or Shoot shall have any claim or right of action for

injunctive relief and/or money damages against [National Geographic] or

[National Geographic's] agent arising out of the use of the Images."

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       Although National Geographic did not sign the release, at least two

provisions placed obligations on it. Specifically, National Geographic "agree[d]

that it will not use the Images to defame or show the Location in a false light."

It also agreed to "use reasonable care to prevent damage to the Location and ...

[to] indemnify [Grieshop] should any damage be caused to the Location by the

negligent act or omission of [National Geographic] or its agents, employees or

invitees."

       Some time after the release was executed, then-Harlan County Sheriff

Marvin Lipfird executed an arrest warrant, signed by a trial commissioner, on

Grieshop at his office in the basement of the courthouse. The arrest was filmed

by National Geographic. The charges against Grieshop were later dismissed for

lack of probable cause. Grieshop claims that National Geographic was given

notice of this fact. Nevertheless, footage of the arrest was used in an episode of

Kentucky Justice that first aired on January 24, 2014. The episode was

originally titled "Law Gone Bad" and, after Grieshop complained, was re-titled

"Arresting the Law."

       On February 15, 2015, Grieshop filed a defamation action against

National Geographic and Lipfird. National Geographic moved to compel

arbitration under an arbitration clause in the release. That clause reads as

follows:

      The parties agree that they will attempt in good faith to settle any
      and all disputes arising out of, under, or in connection with this
      Agreement, including without limitation the validity, interpretation,
      performance and breach hereof, through a process of mediation in
      Washington, D.0 under the supervision of a mutually agreed upon
      mediator. In the event that mediation fails to settle such a dispute,
      the parties agree to proceed to binding arbitration in Washington,
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      D.C. pursuant to the then existing rules of the American
      Arbitration Association. Judgment upon the award rendered may
      be entered in any court having jurisdiction thereof. In the event of
      arbitration, the non-prevailing party will be responsible to pay all
      costs, the prevailing party's attorney's fees, costs and other
      disbursements, plus legal interest on the award.

      The trial court denied the motion, concluding that there was no valid

underlying agreement to which the arbitration agreement could apply and thus

no valid arbitration agreement. The court stated that "an arbitration agreement

presupposes the existence of another agreement," and that the release, the

purported other agreement, was "not a contract, for the basic reason that it

lacks mutuality; stated differently, it is devoid of any consideration whatsoever

passing to Grieshop." The court further stated that the release contained only

unilateral promises by Grieshop "without as much as a recital of

consideration," and that the promises by National Geographic only ran to the

"Location," namely, "the old Harlan County Court House, which Grieshop does

not own."

      National Geographic then moved the Court of Appeals for interlocutory

relief under Civil Rule 65.07 and North Fork Collieries, LLC v. Hall, 322 S.W.3d
98 (Ky. 2010). The Court of Appeals denied the motion, noting that relief under

those authorities is essentially injunctive and requires proof of irreparable

injury, and concluding that National Geographic "has not asserted, much less

proven, any irreparable injury resulting from the trial court."

      National Geographic appealed to this Court under Civil Rule 65.09.
                                    II. Analysis

       As this Court has stated several times in the past, an order denying a

motion to compel arbitration based on an arbitration agreement is one of the

few interlocutory trial orders that may be reviewed immediately by an appellate

court. If the arbitration agreement in question is governed by the Kentucky

Uniform Arbitration Act, interlocutory review is provided by statute. See KRS

417.220(1)(a) ("An appeal may be taken from ... [a]n order denying an

application to compel arbitration made under KRS 417.060...."). If that act does

not apply and the agreement is governed by other law, such as the Federal

Arbitration Act, "CR 65.07 and CR 65.09 [are] appropriate avenues for the

review of trial court orders denying motions to compel arbitration." North Fork

Collieries, 322 S.W.3d at 101. Those rules, of course, allow interlocutory review

of orders granting or denying injunctive relief.

      The rationale behind this is not that motions to compel arbitration are

precisely motions for injunctive relief but because they "are in some ways akin

to motions for injunctions under CR 65.04." Id. at 102. We have also noted that

"they are significantly different as well." Id. Unlike a traditional request for an

injunction, which would require the trial court "to weigh the equities of the

situation, to assess the merits of the underlying controversy, [and] to determine

whether litigation would or would not 'irreparably harm' the movant," a motion

to compel arbitration seeks only "specific performance of the asserted

contractual right," and the trial court's "task ... is simply to decide under

ordinary contract law whether the asserted arbitration agreement actually

exists between the parties and, if so, whether it applies to the claim raised in
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the complaint." Id. And whereas an ordinary request for "injunctive relief is

said to be within the sound discretion of the trial court, in this context that

discretion extends no further than the correct application of the law, and

accordingly we have held that the improper denial of a motion to compel

arbitration warrants relief under CR 65.09." Id. "The trial court's factual

findings, if any, are reviewed for clear error, but its construction of the

contract, a purely legal determination, is reviewed de novo." Id.

      Despite the differences between an ordinary injunction action and

interlocutory review of the denial of a motion to compel arbitration, both

require a showing that "the movant will suffer irreparable injury or the final

judgment will be rendered ineffectual." Id. The Court of Appeals reached its

decision by applying this point of law to National Geographic's claim and

concluding that it had neither alleged nor proven irreparable injury.

      That approach, however, ignored that North Fork Collieries went on to

hold expressly that "in this context irreparable injury arises from an improper

denial of a motion to compel arbitration and that the principal question on

review is simply whether the trial court correctly decided the contract issue."

Id. at 103. In other words, irreparable injury is proven by showing that the trial

court erred in denying the motion to compel arbitration.

      The Court of Appeals simply failed to engage in the required analysis,

namely, whether the trial court correctly decided the contract-formation

question. That error alone satisfies the requirement that the movant show

extraordinary cause as required by Civil Rule 65.09(1) and requires that the

Court of Appeals' order be vacated.
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                                 III. Conclusion

      Because the Court of Appeals failed to apply North Forth Collieries in its

entirety and denied National Geographic's request for interlocutory relief

without examining whether the trial court correctly determined there was no

contract, the Court of Appeals' order denying interlocutory relief is vacated.

This matter is remanded to that court for determination of the contract-

formation question.

      All sitting. All concur.

COUNSEL FOR APPELLANTS:

Susan Grogan Faller
Frost Brown Todd, LLC
3300 Great American Tower
301 East Fourth Street
Cincinnati, Ohio 45202

Barry Douglas Hunter
Frost Brown Todd, LLC
250 West Main Street, Suite 2800
Lexington, Kentucky 40507-1749

COUNSEL FOR APPELLEE, JOSEPH GRIESHOP:

Russell Darren Alred
PO Box 288
Harlan, Kentucky 40831

COUNSEL FOR APPELLEE, MARVIN J. LIPFIRD:

Jonathan C. Shaw
Porter, Schmitt, Banks & Baldwin
327 Main Street
PO Drawer 1767
Paintsville, Kentucky 41240-1767

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