Kindred Nursing Centers Ltd. P'ship v. Sloan, No. 2009-CA-001629-MR.

• Decision Date: 03 December 2010
• Docket Number: No. 2009-CA-001629-MR.
• Parties: KINDRED NURSING CENTERS LIMITED PARTNERSHIP d/b/a Harrodsburg Health Care Center; Kindred Healthcare Operating, Inc., Kindred Healthcare, Inc.; and Kindred Hospitals Limited Partnership, Appellant, v. Lynne SLOAN, as Ancillary Administrator of the Estate of Gladys B. Reed, Deceased, Appellee.
• Court: Kentucky Court of Appeals

329 S.W.3d 347 KINDRED NURSING CENTERS LIMITED PARTNERSHIP d/b/a Harrodsburg Health Care Center; Kindred Healthcare Operating, Inc., Kindred Healthcare, Inc.; and Kindred Hospitals Limited Partnership, Appellant, v. Lynne SLOAN, as Ancillary Administrator of the Estate of Gladys B. Reed, Deceased, Appellee. No. 2009-CA-001629-MR. Court of Appeals of Kentucky. Dec. 3, 2010.

Donald P. Moloney, II, J. Peter Cassidy, III, Lexington, KY, for Appellants.

Stephen M. O'Brien, III, Lexington, KY, for Appellee.

Before MOORE and THOMPSON, Judges; LAMBERT,¹ Senior Judge.

OPINION

MOORE, Judge:

Kindred Nursing Centers Limited Partnership d/b/a Harrodsburg Health Care Center, Kindred Healthcare Operating, Inc., Kindred Healthcare, Inc., and Kindred Hospitals Limited Partnership (Kindred) appeal from an August 13, 2009 order of the Mercer Circuit Court which denied Kindred's motion to compel arbitration. We vacate and remand.

Gladys Reed was a resident of Kindred's facility, Harrodsburg Health Care Center. Reed died on August 28, 2007. LynneSloan,² her daughter, was appointed ancillary administrator of her estate.

Sloan, in her capacity as ancillary administrator, individually, and on behalf of other beneficiaries, filed an action against Kindred alleging negligence and violations of statutory duties in the death of Reed. However, Kindred alleged that Reed had signed an arbitration agreement encompassing these claims, and Kindred filed a motion, pursuant to the Kentucky Uniform Arbitration Act, Kentucky Revised Statutes (KRS) 417.045-417.240 (KUAA) and the Federal Arbitration Act, 9 U.S.C. §§ 1-16(FAA), to compel arbitration and either dismiss or stay this action. By order entered August 13, 2009, the circuit court denied Kindred's motion to compel arbitration. This appeal followed.

Kindred argues that the circuit court erred by denying its motion to compel arbitration, maintaining that the arbitration agreement constituted a binding and enforceable contract and that the evidence established that Reed signed the agreement through a valid power of attorney.

Under KRS 417.060, a person may seek a judicial order to compel arbitration upon a showing that a valid arbitration agreement exists and that the opposing party refuses to arbitrate. If the opposing party challenges the existence of a valid arbitration agreement, the circuit court "shall proceed summarily to the determination of the issue so raised." KRS 417.060(1).

Appellate review of an otherwise unappealable interlocutory order arises under KRS 417.220(1)(a). The standard of review by our Court from appeals arising under this statute was discussed in Conseco Finance Servicing Corp. v. Wilder, 47 S.W.3d 335, 340 (Ky.App.2001) as follows:

It may also be well to note that our review of a trial court's ruling in a KRS 417.060 proceeding is according to usual appellate standards. That is, we defer to the trial court's factual findings, upsetting them only if clearly erroneous or if unsupported by substantial evidence, but we review without deference the trial court's identification and application of legal principles....

Here, the circuit court made no factual findings nor can we determine whether the circuit court's ruling was based upon the application of legal principles justifying a de novo review by this Court.³ The circuit court's order does indicate that the court "considered the record" and "heard arguments of counsel." Under the circumstances presented in this case, in reliance upon Conseco, we believe the circuit court is bound by Kentucky Rules of Civil Procedure (CR) 52.01, which mandates that a court set forth specific findings of fact and separate conclusions of law in its order or judgment.

As such, the circuit court erred when it entered its August 13, 2009 order denying arbitration because, in that order, it merely stated that Kindred's motion to compel arbitration was denied; it did not contain any findings of fact or conclusions of law. In...